Will Ethereum [ETH] follow Bitcoin’s [BTC] lead as the market rallies?

Analyst suggested that Ethereum could soon follow Bitcoin’s rally.
NFT trades and lowering gas fees may impact network activity in the long run.

Bitcoin [BTC] has been seeing quite a rally over the last few days, inspiring a lot of positive speculation around the king coin. However, it appears that Ethereum [ETH] will also soon be joining the rally and see a surge in its prices.

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Where BTC goes ETH follows?

According to analyst crypto sunmoon on CryptoQuant, the drop in prices of Bitcoin and Ethereum from 9 – 13 March resulted in a swift decrease in exchange reserves. It is possible that investors took advantage of the situation by depositing more Bitcoin into exchanges than they purchased during the subsequent rebound.

In comparison to Bitcoin, Ethereum has not experienced a significant surge and the number of withdrawals has remained low. However, sunmoon believes that once Bitcoin’s upward trend is fully realized, there may be a substantial increase in Ethereum’s value.

Another positive indicator for Ethereum would be the rising number of addresses on the network. According to Glassnode’s data, addresses holding more than 0.01 of ETH have reached an eight-month high.

However, the overall activity on the network could soon slow down. This would be because of the falling NFT trades on the Ethereum network. This suggested that users were losing interest in Ethereum-based NFTs.

Another indicator of the same would be the falling gas usage, implying that the activity on the Ethereum network has fallen.

Source: Santiment

Even though ETH NFT interest has started to decline, Open Interest had started to surge at press time.

As the Shanghai Upgrade approaches, many traders would be interested in making bets on the future of Ethereum. However, it is important to note that high Open Interest also implies that there could be high volatility in the future.

📈 #Ethereum $ETH Futures Contracts Open Interest just reached a 6-month high of $625,263,663 on #Deribit

Previous 6-month high of $623,061,491 was observed on 20 March 2023

View metric:https://t.co/uXJN8QUW5D pic.twitter.com/LduET6sFll

— glassnode alerts (@glassnodealerts) March 21, 2023

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Realistic or not, here’s ETH’s market cap in BTC

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At press time, the trader sentiment is mostly bearish. This can be seen through Coinglass’ data, which showcases that short positions against Ethereum increased over the last few days.