Ethereum

Bitcoin

Narrative

Divergence

<ul>
 <li>ETH may displace Bitcoin’s dominance next year, an investor pointed out.</li>
 <li>Long-term investors are confident of the altcoin’s performance.</li>
</ul>
According to Raoul Pal, <a href="https://ambcrypto.com/search/ethereum" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Ethereum [ETH]</a> will outperform <a href="https://ambcrypto.com/search/bitcoin" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">Bitcoin [BTC]</a> by 2024. Pal, who shared the opinion on X, noted that there could be a repeat of the 2021 cycle where BTC initially beat ETH’s performance.
But nine months later, ETH was up 245% while BTC gained 45% within the same period.
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 It's all about liquidity and the business cycle leading the risk curve. Narrative follows.
 — Raoul Pal (@RaoulGMI) <a href="https://twitter.com/RaoulGMI/status/1737979606886449351?ref_src=twsrc%5Etfw" data-wpel-link="external" target="_blank" rel="noopener noreferrer nofollow">December 21, 2023</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Pal’s point of view was not only his. But it was also that of Exponential Age Asset Management (EXPAAM).
EXPAAM is a digital asset investment management firm co-founded by Pal, who also doubles as the CEO of Global Micro Investor. In defending his school of thought, the investors noted that:
<blockquote>
 “It’s all about liquidity and the business cycle leading the risk curve. Narrative follows.”
</blockquote>
This year, Ethereum’s price has increased by 92.04% while it changed hands at $2,3110. However, BTC’s performance has been better, thanks to its 163.21% hike.
Since there were discussions that ETH’s growth potential was massive, AMBCrypto dug into the matter.
Indications from the Market Value to Realized Value (MVRV) Z-score <a href="https://app.santiment.net/charts/peNherGJ__sCl" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">showed</a> that the reading was 0.61. The MVRV Z-score has been historically effective in identifying when the market value is below the realized value.
It also shows when the realized value is above market value.
<div id="attachment_360075" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-11.38.35-22-Dec-2023.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-360075" decoding="async" class="wp-image-360075 size-full" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-11.38.35-22-Dec-2023.png" alt="Ethereum MVRV Z-Score and ETH price" width="2560" height="867" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-11.38.35-22-Dec-2023.png 2560w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-11.38.35-22-Dec-2023-300x102.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-11.38.35-22-Dec-2023-1024x347.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-11.38.35-22-Dec-2023-768x260.png 768w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-11.38.35-22-Dec-2023-1536x520.png 1536w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/Ethereum-ETH-11.38.35-22-Dec-2023-2048x693.png 2048w" sizes="(max-width: 2560px) 100vw, 2560px"></a>
 Source: Santiment
</div>
Since the metric was below 1, it means the market value is far below the realized value. Therefore, buying ETH at this level has the potential to produce great returns for investors.
Per price action, the Exponential Moving Average (EMA) showed that ETH’s value could grow exponentially in the long term.
At the time of writing, the 50 EMA (blue) had crossed over the 200 EMA (yellow). This position is termed a golden cross, and it is a bullis sign.
AMBCrypto then considered Ethereum’s On Balance Volume (OBV) as shown the daily chart. At press time, the OBV had increased to 11.6 million.
The OBV measures buying and selling pressure. So, the increase means that market players intend to push the <a href="https://ambcrypto.com/what-ethereums-prediction-holds-as-price-plummets/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">price</a> up in the short term.
<div id="attachment_360084" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/ETHUSD_2023-12-22_12-22-51.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-360084" decoding="async" class="wp-image-360084 size-full" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/ETHUSD_2023-12-22_12-22-51.png" alt="Ethereum (ETH) Price Analysis" width="1143" height="721" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/ETHUSD_2023-12-22_12-22-51.png 1143w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/ETHUSD_2023-12-22_12-22-51-300x189.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/ETHUSD_2023-12-22_12-22-51-1024x646.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/ETHUSD_2023-12-22_12-22-51-768x484.png 768w" sizes="(max-width: 1143px) 100vw, 1143px"></a>
 Source: TradingView
</div>
Therefore, the recent <a href="https://ambcrypto.com/ethereum-why-a-big-eth-move-to-2-5k-might-be-imminent/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">report</a> that ETH may hit $2,500 soon remain valid. However, the Moving Average Convergence Divergence (MACD) had turned negative.
The MACD reading indicate a bearish momentum. Thus, there is a chance the ETH’s price drops below $2,300 before the potential run to $2,500.
In addition, the Long Tern Holder NUPL (LTH-NUPL) has moved from hope and fear into optimism.
The LTH-NUPL is the Net Unrealized Profit/Loss that takes into account only UTXOs with a lifespan of at least 155 days and serves as an <a href="https://studio.glassnode.com/metrics?a=ETH&amp;category=Long%2FShort%20Term&amp;m=indicators.NuplMore155&amp;s=1672527600&amp;u=1703199599&amp;zoom=" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">indicator</a> to assess the behavior of long term investors.
&nbsp;
<div id="attachment_360088" style="width: 100%" class="wp-caption aligncenter"><a href="https://statics.ambcrypto.com/wp-content/uploads/2023/12/glassnode-studio_ethereum-long-term-holder-nupl-1.png" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img aria-describedby="caption-attachment-360088" decoding="async" class="wp-image-360088 size-full" src="https://statics.ambcrypto.com/wp-content/uploads/2023/12/glassnode-studio_ethereum-long-term-holder-nupl-1.png" alt="Ethereum Long Term Holder NUPL" width="1800" height="1013" srcset="https://statics.ambcrypto.com/wp-content/uploads/2023/12/glassnode-studio_ethereum-long-term-holder-nupl-1.png 1800w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/glassnode-studio_ethereum-long-term-holder-nupl-1-300x169.png 300w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/glassnode-studio_ethereum-long-term-holder-nupl-1-1024x576.png 1024w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/glassnode-studio_ethereum-long-term-holder-nupl-1-768x432.png 768w, https://statics.ambcrypto.com/wp-content/uploads/2023/12/glassnode-studio_ethereum-long-term-holder-nupl-1-1536x864.png 1536w" sizes="(max-width: 1800px) 100vw, 1800px"></a>
 Source: Glassnode
</div>
How much are <a href="https://ambcrypto.com/convert/1-eth-to-usd" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">1,10,100 ETH worth today</a>?
This position implies that the broader market believe that ETH’s performance in 2024 would be better than in 2023.
If the altcoin does, then Pal’s prediction may be considered concrete.

Why Ethereum may outperform Bitcoin in 2024

AMBCrypto

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