Ethereum takes a breather after record high…"Liquidity and trading volume remain firm despite short-term correction"

XRP·Solana·Dogecoin, etc.

Buying flows into altcoins as well

Outlook for Ethereum staking ETF approval

Expectations for altcoin rotation remain

After Jerome Powell, chair of the U.S. Federal Reserve (Fed), spoke at Jackson Hole, risk asset appetite revived and Ethereum broke past its previous record high. However, profit-taking quickly followed and the rally has for now entered a cooling-off phase. Market attention is shifting to large market-cap "blue-chip" altcoins (cryptocurrencies other than Bitcoin) and tokens in the Ethereum ecosystem.

According to the crypto industry on the 3rd, crypto asset data analytics firm Kaiko said in a report published on the 25th of last month that "Ethereum, supported by spot demand, surpassed its all-time high from 2021" and "despite short-term corrections, liquidity and trading volume remain firm." In fact, Nasdaq-listed Sharplink Gaming bolstered the rally by adding to its Ethereum holdings through a "Digital Asset Treasury (DAT)" strategy.

According to domestic crypto exchange Upbit, Ethereum surged to as high as 6,845,000 won last month, rising about 40% in a month. It has since given back part of those gains and is currently trading around 6,000,000 won.

Large investors have continued buying as well. On-chain analytics firm Santiment said, "During August, the number of wallets holding more than 10,000 ETH increased by 48, reaching a total of 1,275," and assessed that "the foundation for further market rebounds is being laid."

Experts say they leave the possibility of a short-term correction open while expecting the mid- to long-term uptrend to continue. Buying at low prices is flowing into major altcoins such as XRP (formerly Ripple), Solana and Dogecoin.

Cryptocurrency analyst Benjamin Cowen explained, "Ethereum is likely to see a correction this month," noting that "after the U.S. election in 2017 and in September 2021, it fell by 48% and 34% respectively." He added, "However, if a correction occurs this month after last month's breakout, an explosive rebound in October is possible."

Expectations for tokens related to Ethereum are also growing. Crypto strategist Michael van de Poppe said, "During a September correction, attention should be paid to Ethereum ecosystem altcoins," naming Optimism, Arbitrum, Ethena and Rocket Pool as key candidates. These cryptocurrencies commonly help Ethereum transact faster and more efficiently or are projects related to rewards (staking) through Ethereum deposits. For this reason, they tend to move together when Ethereum's price fluctuates.

There is also analysis that it is still premature to expect an "altcoin season." Crypto research firm SwissBlock said, "The current altcoin strength index is only 8%, so there is insufficient signal for entering a bull market." It added, "However, altcoins that have already undergone corrections may enter an accumulation phase and prepare for further rises."

Expectations for a rotation of funds within the year remain intact.

Cryptocurrency trading firm QCP Capital said, "Bitcoin dominance (market share) is currently 57%, higher than during the 2021 bull market (below 50%)," but explained that "as the possibility of approval for an Ethereum staking exchange-traded fund (ETF) this year has been raised, expectations for an altcoin rotation are being maintained."

Bloomingbit reporter Minseung Kang minriver@bloomingbit.io