The price of Ethereum continues to make all-time highs. We have covered price analysis extensively in recent weeks, and provided all fundamental reasons why this is happening. That is meant to argue that Ethereum’s price rise is justified, based on demand driven factors.
Analysis of Ethereum demand lead us to this Ethereum forecast of $1000.
Now it is one thing to analyze demand and fundamental factors on Ethereum. It is another thing to determine relative strength of Ethereum within cryptocurrency land.
When it comes to relative strength all Ethereum writers tend to focus on market capitalization. For instance, according to Coinmarketcap Bitcoin has a market cap of $42B while Ethereum stands at $33B. Early this year Ether has a market cap of $4B.
In our view the market cap comparison does not reflect the best way to look at things. What really is valuable as an indicator is the Bitcoin to Ethereum price ratio. That stems from analysis in traditional markets (think of the gold to silver ratio, S&P to Russell ratio, and the likes). The reason we prefer this ratio above a market cap comparison is that, bottom line, whatever the market cap, all that matters is price. The point is that price reflects supply and demand factors; price is the point where supply and demand find equilibrium.
The Bitcoin to Ethereum price ratio reveals a very interesting insight. In April of this year, right before Ethereum started to rally its strong rise, the ratio stood at 25. Today, the ratio is just 7.5. That is based on a unique chart provided by EthereumPrice.today, our own research service.
This ratio, combined with market cap, tells us that Ethereum is not only the strongest cryptocurrency, it is about to overtake Bitcoin. It is a matter of time.