Ethereum (ETH) has outperformed Bitcoin (BTC) during the past week following the US Federal Reserve’s (Fed) decision to cut interest rates by 50 basis points (bps) on September 18, 2024. The rate cut, the first in four years, has propelled ETH’s price by 16%, bringing it to $2,666. In comparison, BTC posted a 9% increase, trading at $63,643 at the current moment.
The ETH/BTC trading pair has experienced a notable surge, climbing from 0.0385 on September 18 to 0.0420 by September 23, an increase of almost 9%. This trading pair is a key metric for crypto analysts to gauge market sentiment towards altcoins relative to BTC.
Notably, Ethereum’s price action has shown a bullish pattern, posting two consecutive green candles against BTC on the weekly chart. This movement often suggests a growing investor interest in altcoins, potentially indicating the onset of an “altseason.” Conversely, when BTC gains ground over ETH, it can signal a return to Bitcoin’s dominance.
Adding to the bullish sentiments surrounding Ethereum, the futures funding rate for ETH has turned positive since the recent rate cut, now standing at 0.0058% according to CoinGlass data. A positive funding rate means that traders holding long positions on ETH are paying those with short positions, reflecting optimism about ETH’s future price. This shift likely stems from increased demand and confidence following the rate cut.
However, investors should be cautious, as dramatic movements in funding rates can lead to market corrections, especially amidst excessive optimism or external changes.
Throughout 2024, Ethereum has faced competition from other blockchains despite its significant market position. Even breakthroughs such as the US Securities and Exchange Commission’s (SEC) approval of ETH exchange-traded funds (ETFs) have not significantly boosted its value. Competing platforms like Solana (SOL), Binance Coin (BNB), and Tron (TRX) have not only seen notable price appreciation but have also advanced their ecosystem infrastructures.
Solana, for example, made significant announcements at the recent Solana Breakpoint 2024 event in Singapore, including Franklin Templeton’s plan to launch a mutual fund on the platform. Meanwhile, the imminent release of former Binance CEO Changpeng Zhao from prison on September 29, 2024, is expected to bring bullish momentum to Binance’s native token BNB, which has displayed resilience despite Zhao’s incarceration on money laundering charges.
As the adoption of Ethereum’s layer-2 solutions continues to rise, offering high scalability and minimal transaction costs, the smart contract space is expected to grow increasingly competitive. Currently, Ethereum trades at $2,660, marking a 3.3% increase over the last 24 hours.
