Is Bitcoin making a strong rebound back to bullishness? Can ETH win back people's hearts for decentralization?

Source: Talking About Li and Others

The market has been quite interesting these days. Yesterday (April 23), the price of Bitcoin rebounded again to around $94,700 (near the Fibonacci 0.236 level), and it seems to have successfully broken through the descending channel that has persisted for some time. As shown in the figure below.

Thinking back to when the market was continuously declining a few days ago, Bitcoin dropped to around $74,000, and many people were in a state of panic and pessimism, with a bear market atmosphere overshadowing people's emotions. Just about two weeks later, with Bitcoin's rapid rebound, I now see many people, including some KOLs who previously announced bearish views, starting to turn bullish again, as if there is a feeling of "the bull is back quickly."

From people's emotions, my intuitive feeling is that many have begun to shift from pessimism to optimism, filled with expectations and hopes that Bitcoin will soon reach over $100,000 again.

On the other hand, from the overall market capitalization of the crypto market, TOTAL has now risen to around $3 trillion, while BTC.D (the market cap dominance of Bitcoin) has also reached a relative high of 64.6% since February 2021. As shown in the figure below.

Bitcoin's dominance of over 64% also means that altcoins are still facing an overall liquidity shortage.

Although theoretically, based on past cycles, when Bitcoin reaches a certain high dominance (around 65%), it often indicates the potential arrival of a new altcoin season (for those interested in the issues facing this altcoin season, you can search for our previously published series of articles on altcoin seasons), in the current overall market environment, if you want to seize potential altcoin opportunities, it is best to prioritize mainstream coins (like SOL, ETH, or leading coins in other sectors), while also controlling your position ratio to avoid falling into new traps with altcoins (especially low-quality coins).

Today, I also saw another interesting piece of news regarding the MemeCoin TRUMP token. Trump has once again leveraged his influence to promote the TRUMP token, causing its price to surge rapidly from $9.3 to $14.7. As of the writing of this article, the price has stabilized around $12.4. As shown in the figure below.

A few days ago, many were predicting that the TRUMP token would crash due to massive unlocking issues, but unexpectedly, Trump's actions once again broke people's perceptions. Not only was the unlocking of 40 million new tokens postponed by 90 days, but there was also a Trump dinner event, where the top 220 holders of the TRUMP token would have the opportunity to attend a luxurious dinner, and the top 25 holders would additionally get a chance to visit the White House and dine face-to-face with Trump.

For this reason, the GetTrumpMemes official website has also set up a leaderboard to display the rankings of TRUMP token holders in real-time. The more you hold and the longer you hold, the higher your ranking will be. It is estimated that this game of ranking among whale players will continue until May 12. As shown in the figure below.

I wonder if this "influence mining" game initiated by Trump will be emulated by other big names or KOLs, just as various big names launched their own MemeCoins after the release of the TRUMP token.

Although the market seems to have become lively again, we should not overlook the potential risks. This was also discussed in our previous article (April 22) from a macro perspective. The upcoming market will still have some uncertainties, which means that in the short term, the market may still face significant volatility, and new black swan events cannot be ruled out. Only when we see breakthrough developments (such as tariffs, interest rate cuts, and other significant influences) will there be a chance for a real market recovery.

In the next section, let's briefly talk about Ethereum:

If I remember correctly, we haven't specifically discussed ETH for over a month. Recently, any mention of ETH (expressing optimism about Ethereum) in articles would generally attract negative comments. However, this is understandable, as Ethereum has had too many scams and poor price performance for some time. If anyone still expresses optimism about Ethereum, they are certainly at odds with most retail investors and will inevitably face criticism.

Now, many people have started to give up on ETH (with many turning to SOL), and it seems that Ethereum can hardly reverse its poor reputation in the short term, relying only on its past achievements and various so-called upgrades (Vitalik recently proposed a radical idea to replace Ethereum's existing EVM technology with RISC-V technology). Perhaps only a few significant bullish candles could restore people's faith in decentralization.

However, with ETH showing a bit more strength recently, the ETH/BTC exchange rate has rebounded from a historical low of 0.01766 to 0.0195 (should I add a facepalm emoji here?), we can discuss it further.

From the price trend perspective:

Although ETH is still in a descending channel, it seems to have successfully broken through the midline near $1550 (this position has now become a short-term support level). If there is an opportunity to continue breaking through the $1950 level in the coming weeks, then the subsequent trend can still be further anticipated. As shown in the figure below.

From the ecological and developmental perspective:

First, the Pectra upgrade is scheduled to go live on the mainnet on May 7. This upgrade mainly introduces EIP-7702, allowing EOAs (standard Ethereum accounts) to expand smart contract functionalities, supporting use cases like batch transactions, gas sponsorship, or social recovery. Additionally, for ETH stakers, Pectra introduces a feature to enhance the effective balance of validators. In summary, this upgrade focuses on three points: stronger scalability, lower transaction costs, and a more complete staking mechanism. As shown in the figure below.

Secondly, regarding its narrative, Ethereum currently has three main narratives to present:

• ETF Staking

The SEC's review timeline has now been pushed to June this year. Whether it will be approved this year is uncertain, but based on the current news, it seems that approval is merely a matter of time.

• DeFi Recovery

The aforementioned Pectra upgrade will, to some extent, further stimulate the recovery of Ethereum's DeFi ecosystem, as shown in the figure below. Additionally, with the global development of stablecoins and the potential for interest rate cuts in the future, on-chain finance may usher in a new round of development.

• RWA Expansion

Whether in terms of RWA-related issuance or total locked value, Ethereum's network still occupies a major position, as shown in the figure below.

For instance, the RWA tokenized fund issued by BlackRock (i.e., BUIDL, BlackRock's Dollar Institutional Digital Liquidity Fund) currently accounts for over 90% on the Ethereum chain, as shown in the figure below. This, to some extent, reflects the recognition of Ethereum's settlement layer by traditional large financial institutions (whether this will change in the future is uncertain, but at least it is the case now). As shown in the figure below.

In summary, with changes in regulatory policies, a certain degree of recovery in DeFi, deep participation from traditional financial institutions, and the continuous development of the Ethereum network and ecosystem… we believe that Ethereum still deserves attention and emphasis in the future.

Of course, we have only mentioned some aspects of being optimistic about Ethereum in the long term. Any change in circumstances has its dual nature. For example, the transition of Ethereum from PoW to PoS, the impact of Vitalik Buterin's personal actions on Ethereum, etc. These remain focal points of controversial discussions to this day.

The issues Ethereum currently faces seem not only to be related to ETH itself but also to the challenges facing the blockchain as a whole. The blockchain has undergone over a decade of development since its inception, and most of its applications still revolve around the "casino" positioning.

In the past, there were only a few thousand altcoins in the market, and ETH could naturally be regarded as the king of altcoins. However, now there are tens of millions of altcoins in the market (expected to exceed 100 million tokens by the end of 2025). If ETH wants to continue to exceed price expectations and maintain its position as the king of altcoins, it seems that in addition to the basic narrative support we mentioned above, a more convincing new narrative (story) is needed, or there must be breakthrough developments in other areas (such as changes in macroeconomic conditions, policy-driven initiatives, fundamental changes in the underlying chip structure, etc.). But if you insist that I choose only one project from the tens of millions of projects besides BTC for a long-term bet, I personally still lean towards choosing ETH.