FOMO Gives Way To Fear: Bitcoin-Ethereum Ratio Signals Shift In Crypto Sentiment
05 Abril 2024 - 6:00PM
NEWSBTC
The recent ratio between Bitcoin (BTC) and Ethereum (ETH) prices
suggests a potential decline in risk appetite within the crypto
market. The ratio has reached its highest level since April 2021,
indicating a stronger demand for Bitcoin than its smaller rival,
Ethereum. This development has led crypto asset trading firm QCP
Capital to speculate that this shift in the ratio could be an early
indication of a transition from “fear of missing out” (FOMO) to
outright fear. Bitcoin And Ethereum Performance Regarding
recent market trends, the second quarter of 2024 has begun with
relatively subdued activity. Bitcoin’s price has dipped below the
$70,000 mark and has remained range-bound between $65,000 and
$68,000 for the past few days despite briefly touching the $70,000
mark on Monday. Related Reading: XRP To $20 And Ethereum To
$20,000: Crypto Analyst Reveals When This Will Happen According to
QCP’s analysis, the inflow of funds into the spot Bitcoin
Exchange-Traded Fund (ETF) market has not been substantial enough
to drive significant price movements in either direction. As
a result, the company has observed that funding rates have
stabilized, and the front end of the forward curve has declined
from previous highs of 50% to less than 20% currently.
Interestingly, while the front end of the forward curve has
decreased, the back end remains elevated. This has led to interest
in rolling spot-forward basis positions further out, potentially
driven by the continued demand for long-dated Bitcoin calls
extending into 2025. On the other hand, Ethereum’s performance has
been relatively weak. QCP also notes that the ETHBTC ratio
cross-tests a critical support level after breaking below 0.05.
Notably, there has been sustained selling of Ethereum calls,
resulting in lower volatility and downward pressure on the price.
Ultimately, QCP finds that these developments are prompting
speculation as to whether this could be an early sign of FOMO
turning into fear, particularly about Ethereum’s role as a proxy
for altcoins. While Bitcoin may find support from topside demand
and ETF inflows, Ethereum’s performance and its impact on altcoins
will be important factors to watch closely. Will BTC Experience A
Double-Top? Renowned crypto analyst Crypto Con has raised an
intriguing question about whether BTC is poised for a double top
similar to the patterns observed in 2013 and 2021. Analyzing
previous market cycles, Crypto Con highlights that more evident
double tops, such as those witnessed in the first and third cycles
of 2021, triggered significant initial surges on the Fisher
Transform indicator. In contrast, the 2017 double-top
formation showed a more subtle initial rise in June. Notably, all
final cycle tops ended with a regular bearish divergence, where the
price reached higher levels while the indicator declined, as seen
in the chart below. Related Reading: Polygon Observes Buy Signal:
Analyst Suggests MATIC Rebound To This Level Currently, Bitcoin is
approaching levels similar to those seen in 2017, as seen in the
lower part of the chart. Crypto Con suggests that if the Fisher
Transform indicator can consolidate around these levels without
spiking to the line seen in 2013 and 2021, it could indicate a
higher likelihood of a single top formation, which is the analyst’s
most likely outcome, for December 2024, marking the top of this
cycle. Featured image from Shutterstock, chart from
TradingView.com
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