Ethereum flew: Is he wake up?

A 20% rise in a single day is not seen every day. And less when you come without prominence. That was what happened with Ethereum this week. What does this reaction mean?

After months of being in the shadow of Bitcoin, Something changed. What promoted it? And what can come now?

Ethereum surprised with an explosive rise this week, and it was not for a single reason. The main trigger was the Pectra update, which introduced key improvements to the network as greater scalability, new wallet functions and changes in staking. That reactivated the enthusiasm between investors, in an asset that was very lagging. To this was added a strong increase in long positions and a wave of short settlements, which amplified the movement.

The context also accompanied: the appetite for the risk after the recovery of Bitcoin (which exceeded US $ 100,000), returned), Wall Street It stabilized after volatile weeks, and there were positive signs such as the commercial agreement between the US and the United Kingdom, and the purchase of detribit by Coinbase. All that worked as a catalyst for Ethereum to wake up.

This graph shows how Ethereum has been behaving in relation to Bitcoin (ETH/BTC). That is, if the line goes up, Ethereum pays better than Bitcoin, and if he goes down, yields worse. As you can see, Ethereum was very lagging against Bitcoin:

Below the graph you can see how much that relationship changed in a single day, and what the green circle marks is key: Ethereum had its best day against Bitcoin since 2021, with a rise of 14.5%. It was a historical movement that could mark a turning point after a long fall.

A paragraph to talk about Bitcoin, because there is also something interesting there. In recent weeks and months, BTC’s behavior was quite particular. It fell less than the American market, something that did not happen before.

Bitcoin had always had a high correlation with Wall Street. But now it began to take off. And when the market recovered, Bitcoin recovered even more. That loss of correlation is something to follow closely. If Bitcoin begins to behave as an active refuge, we are facing a paradigm shift.

In addition, when one compares it with world liquidity, there is also an interesting relationship: when liquidity rises, Bitcoin usually responds with very strong increases. The simple reading is this: if the central banks again inject money, if there are stimuli or simply an improvement in financial conditions, that is fuel for crypto. And we are starting to see it.

So what can happen to Ethereum?

The first: it is not an asset for cardiac. Ethereum is a very risky asset. It rose 20% in one day, yes, but it can also fall with the same violence. But that does not mean that it has no potential.

If the market keeps a little risk appetite, Ethereum has a lot of space to recover. It is still very lagging. And when that happens, any spark can turn on the fuse, as we saw this week.

Now, are there fundamentals to continue recovering? Some yes, others still. The Ethereum ecosystem remains the most important in the crypto world in terms of infrastructure, intelligent contracts and application development. But it also has challenges: network costs, fierce competition, regulatory doubts.

Is it a real change or a mere rebound? No one knows it yet. It is likely that if the market accompanies, Ethereum may have very interesting weeks.

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Note: The material contained in this note should not be interpreted under any point of view as an investment council or recommendation for the purchase or sale of a particular asset. This content has only educational ends and represents only an opinion of the author. In all cases it is advisable to advise with a professional before investing.