FX.co ★ Crypto market: Ethereum differs from Bitcoin

The US dollar refuses to yield the ground it gained earlier, ignoring the government shutdown and growing expectations of a Fed rate cut. Today, the USDX dollar index reached another 10-week high near 99.06, marking its fourth consecutive day of strengthening.

Meanwhile, the cryptocurrency market continues its correction. While Bitcoin's price today remains nearly unchanged from yesterday's close, Ethereum (ETH) has lost about 2.8%, trading around $4,378.00 against the dollar at the time of publication.

The record high of $4,955.00 was set on August 24 of this year, just ten days after Bitcoin (BTC) reached its own all-time high near $124,000.00.

Ethereum differs from Bitcoin in investor perception

While Bitcoin is often viewed as a kind of digital gold — a defensive asset during times of economic uncertainty — Ethereum is typically seen as a technological platform powering a wide array of decentralized applications and smart contracts.

Therefore, amid general macroeconomic instability driven by US inflation and debt concerns, Ethereum appears less attractive to many professional market players. Although technical progress tied to network upgrades is undoubtedly important, the overall investment climate plays a major role in shaping Ethereum's short-term price fluctuations.

As a result, and as we can observe, while Bitcoin's recent correction seems to have nearly ended, Ethereum has yet to reach a new high. Crypto market experts are analyzing the reasons behind this and highlighting key factors that could fuel further growth in the leading altcoin's price.

Key factor #1: staking in Exchange-Traded Funds

One of the most significant catalysts for Ethereum's price growth is the potential introduction of staking mechanisms into a US exchange-traded fund (ETF) managed by investment giant Grayscale. This would allow shareholders to earn additional income while maintaining their positions.

Previously, such a mechanism was unavailable, as US regulators viewed staking as a potential source of illicit income. Now, this shift opens up new earning opportunities for Ethereum investors.

Such a measure could increase Ethereum's appeal to institutional investors, boosting overall demand and helping sustain high price levels.

Key factor #2: the Fusaka upgrade

The second key driver cited by crypto analysts is the upcoming Fusaka blockchain upgrade, scheduled for the end of this year. The update includes a range of improvements to the network's performance — notably higher throughput and lower transaction costs.

This upgrade is expected to make Ethereum more user-friendly by reducing network congestion and improving speed and reliability. Alongside new mechanisms such as the increased share of coins locked in staking — effectively reducing circulating supply — the update could create a shortage of Ethereum on the market, further supporting the bullish trend.

Competition and outlook

Despite competition from projects like Solana (SOL), Ethereum continues to lead its segment. However, rival platforms are gradually capturing some investor attention and resources, slightly slowing Ethereum's growth pace compared to previous market cycles.

Nonetheless, crypto analysts are confident that Ethereum's price could rise significantly in the near future. Among the potential targets for the ETH/USD pair are levels of $5,500 and even $8,600 in the medium term.

Bottom line

In summary, while infrastructure development and positive momentum around Ethereum set the stage for another rally, substantial progress is likely only if overall market conditions remain supportive and investor adoption continues to grow. Still, given the planned upgrades and the current market sentiment, experts believe Ethereum stands a strong chance of setting new historical highs soon.