Despite the recent approvals of spot Bitcoin ETFs and the influx of significant capital, the anticipated positive influence on Bitcoin’s price has yet to materialize. In fact, Bitcoin experienced a decline of more than 5% following the approvals last week. This contrasts with Ethereum, which recorded an almost 8% rise over the same period, despite struggling to sustain the $2,600 level. Data from on-chain analytic firm Santiment suggests that Ethereum’s market dominance over Bitcoin continues to surge. In the past week alone, Ethereum’s market dominance has seen a notable increase of more than 22.4%. This rise in dominance can be attributed to the increasing popularity of the Ethereum network, with an average of 89.4k new Ethereum addresses being generated daily. On January 16th alone, 96.3k wallets were created. The planned Ethereum network upgrades, starting with the Dencun hard fork, are further driving the appeal for Ether and forming a bullish perspective among investors. These events present an opportunity for Ethereum to decouple from the rest of the crypto market and potentially gain further momentum.
According to a recent analysis by QCP Capital, Bitcoin forwards have also plunged deeper than Ether forwards. The 1-month forward rate for Bitcoin dropped from a peak of 32% annually to a minimum of 9%, reflecting a decrease of 23%. Similarly, the 1-month forward rate for Ether decreased from a high of 28% to 12%, marking a reduction of 16%. However, QCP Capital still finds ETH forwards attractive despite the decrease in yields, as they are still paying 11-13% annually. QCP Capital also suggests that selling ETH 1-month 2200 Puts is a decent play, with yields above 21% annually and a potential level to buy if there is a dip into the potential ETH spot ETF approvals. These insights indicate that there is still enthusiasm and potential for profit within the Ether market.
Looking ahead, there are several significant upcoming events that may impact the cryptocurrency market. The Bitcoin halving is scheduled for mid-April, and the potential approval of spot Ethereum ETFs is expected to start in May. These events could further shape the trajectory of Bitcoin and Ethereum prices. Additionally, broader macroeconomic events may also influence the direction of the market in the interim.
One interesting trend worth noting is the declining supply of Ether on crypto exchanges. Over the past ten days, the supply of Ether on exchanges has dropped from 8.18% to 8.10%. This figure is nearing an all-time low of 8.05%. The decreasing supply suggests that Ether holders are moving their tokens from exchanges into long-term storage, anticipating a price rise. This shift in behavior indicates a growing confidence in Ether’s future potential.
Despite the approval of spot Bitcoin ETFs, Bitcoin’s price has not experienced the anticipated boost. On the other hand, Ethereum continues to surge in dominance and popularity, with the upcoming network upgrades and potential ETF approvals fueling investor optimism. Bitcoin and Ether forwards have seen decreases in rates, but still present opportunities for profit. Significant upcoming events, such as the Bitcoin halving and potential Ethereum ETF approvals, may shape the market’s direction, and the declining supply of Ether suggests increasing confidence among holders. As always, the cryptocurrency market remains unpredictable, and investors should stay informed and cautious in their decision-making.
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