The “liquidity crisis” of Ethereum could reach a new ETH all-time high before Bitcoin – analyst

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Ethereum’s native token, Ether (ETH), could hit Bitcoin (BTC) to new all-time highs, a new analysis shows.

In a tweet on Wednesday, Ki Young Ju, CEO of the on-chain analysis service CryptoQuant, highlighted a “sales-side liquidity crisis” that could give ETH an advantage over BTC.

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Ether liquidity shortage “intensified”

With Bitcoin up over 50% from its lows of $ 29,000, altcoins have also begun to reawaken, with ether being no exception.

The largest altcoin has recaptured $ 3,000, a level that will be tested again this week as support.

Despite attention focused on Bitcoin reclaiming $ 50,000, optimism about Ether remains high following its successful London hard fork launch earlier this month.

Thanks in part to changes in supply being enforced via the hard fork, a liquidity squeeze could ultimately serve to propel ETH / USD to new historical highs before BTC / USD does the same.

“In the long term, $ ETH could reach its all-time high earlier than $ BTC,” summarized Ki.

“The current $ ETH price is closer to ATH compared to $ BTC. Higher demand, lower supply. The $ ETH sell-side liquidity crisis is still worsening while the $ BTC foreign exchange reserve halted its downtrend in May. “

BTC exchange reserve chart. Source: CryptoQuant

In terms of numbers, the Bitcoin exchange reserves have been declining since May, only to return at the end of July. From a high of 2.54 million on July 26, BTC reserves then declined to 2.44 million this week.

In contrast, ETH has seen a largely linear downward trend since the local high of 21.43 million on stock exchanges at the end of May. This week the foreign exchange balance is around 19.25 million.

ETH exchange reserve chart. Source: CryptoQuant

Battle over the supply shocks

Ki isn’t the only one predicting a rampant bull load for Ether versus Bitcoin.

Similarly, analysts say this key metric suggests an altcoin season is coming

As Cointelegraph reported, Bloomberg Intelligence also favored ETH over BTC in a recently published report and even predicted a “flip” of the largest cryptocurrency.

Meanwhile, the data continues to show that a supply shock is afoot for Bitcoin too – something that has its own historical precedent for triggering BTC price spikes.

“The illiquid supply shock ratio has been a good leading indicator over the past few months,” commented analyst William Clemente III on the latest figures from Glassnode, another on-chain analysis resource.

“Impulses in both directions have led to price campaigns. As the metric continues to slowly slide upwards, it is currently at the previous level. 58K BTC looking for another big boost. “

Annotated chart of the Bitcoin supply shock. Source: William Clemente III / Twitter

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.