In the last few hours, Ethereum has been moving in a region close to its all-time high, with Bitcoin has banished the fears of going below to post greens. Currently, the digital asset is trading around $58,500, showing a gain of around 3.24% in the last 24 hours.
But while Ethereum sees strong bullish jumps, the digital asset is still in the price discovery region. But despite that, the second digital asset has its support shorter than the one of Bitcoin. This shows that if the bears enter the Ethereum market, it is likely that the decline would be drastic. Bitcoin, in turn, would see a decline push its price towards a range.
Chainalysis Economist gave insight into the reasons
Giving his review on why Ethereums support is weaker than that of Bitcoin, an Economist at Chainalysis, Phillip Gradwell, gave his input. Should the market witnessed a steady correction, the price of the digital asset will be hoping to stay near the support level at $1800. Arguing out his reasons, Gardwell mentioned that Ethereum had seen a massive amount of demand when it was at $1800.
He further mentioned that with Ethereum touching close to a new all-time high at the beginning of this week, the analysis of the cost curve of the asset has shown that it has a very narrow base compared to that of Bitcoin. Gradwell said he used new data to come to the figure, and he mentioned that it is also the same thing as the same whale clusters used to know at the price where investors bought more.
While the $1800 has been seen as a strong support, Gardwell mentioned that the asset might fall to $1500 if it falls next. If this happens, it means that the digital asset would be seeing a 30% fall from its current price.
Traders are hoping that Ethereum touches a new all-time high
Going back in history, digital assets have always witnessed massive retracements going as far back as 20% or 30%. But with the way the market has been going in the last few months, we have not seen something of such. He also mentioned that the new $1500 support level is for a shorter frame.
He pointed out that the support of Ethereum might be narrower because compared to Bitcoin, Ethereum has a smaller percentage of long-term holders. After the 2017 bull run elapsed, Gardwell mentioned that he realized that some small group of holders chose to hold on to their digital assets even though it saw huge losses.
He said that it has shown that Ethereuum has a smaller group of investors and traders compared to Bitcoin. Also, traders would hope that Ethereum will continue to touch a new all-time high as the days progresses.