Ethereum Surges as Bitcoin ETF News Causes Market Split
Yesterday, the SEC tweeted that the Bitcoin ETF had been approved, causing a frenzy in the market. However, the excitement was short-lived as SEC chair Gary Gensler clarified that the social media account had been compromised and no decision on the Bitcoin ETF had been made. Despite this confusion, the price of Ethereum (ETH) saw a significant increase, while Bitcoin (BTC) experienced a decrease.
The price of ETH surged by 5% following the news, nearly breaking out above its 2023 highs. In contrast, BTC fell by 4% since yesterday and dipped below $45,000. It seems that the announcement had a divergent effect on the two cryptocurrencies.
On-chain data revealed that a whale borrowed $11 million worth of BTC from the AAVE lending protocol and exchanged it for $11 million worth of ETH. This transaction suggests that big investors are shifting their focus towards Ethereum. Additionally, there has been a significant inflow of over $23 million into ETH in the past 24 hours, indicating increased interest from institutional investors.
Analysts Weigh In: Shift from Bitcoin to Ethereum Underway
Crypto traders and analysts believe that a narrative shift is occurring, with funds flowing from Bitcoin to Ethereum. Alex Kruger points to several factors that indicate the ETH/BTC bottom is likely in, such as the anticipation of an ETH ETF and upcoming events like the EigenLayer airdrop. Another trader, Will Clemente, shared a chart showing a deviation below the 2022 lows for ETH/BTC, further supporting the idea of a shift in the market.
Cold Blooded Shiller suggests that the narrative will switch to an ETH ETF, leading to further price increases for Ethereum. These analysts’ viewpoints reinforce the growing sentiment that Ethereum is gaining more favor among investors compared to Bitcoin.
Bitcoin Dominance Rate Predicts Potential Altseason
The Bitcoin Dominance Rate (BTCD) has been trading inside an ascending parallel channel since November 2022. This pattern usually indicates corrective movements, suggesting that a breakdown from the channel is likely. The BTCD is currently in the lower portion of the channel, aligning with the possibility of a breakdown.
Furthermore, the 3-day Relative Strength Index (RSI) is giving bearish signals. A bearish divergence has occurred, coinciding with the BTCD top. If the BTCD breaks down from the channel, it could fall by 10% to the closest support at 48.50%. This potential breakdown may trigger a minor altseason, where alternative cryptocurrencies outperform Bitcoin.
Bearish Signs for Bitcoin Dominance Rate, Minor Altseason Possible
Despite the bullish sentiment surrounding Ethereum, the bearish outlook for the BTCD suggests that an altseason may be imminent. Reclaiming the channel’s midline could trigger an 11% increase to the channel’s resistance trend line at 60%. However, if the BTCD breaks down from the channel, it could lead to a minor altseason where altcoins gain traction.
Investors should keep a close eye on these indicators and market developments to make informed decisions about their cryptocurrency portfolios. Market conditions are subject to change, so conducting thorough research and consulting with professionals is crucial.
Disclaimer: Market Conditions Subject to Change
This article serves as an informative analysis and should not be considered financial or investment advice. Market conditions can change rapidly, and it’s essential to conduct personal research and seek professional guidance before making any financial decisions. Be aware of the updated Terms and Conditions, Privacy Policy, and Disclaimers.
Analyst comment
Positive for Ethereum and negative for Bitcoin.
As an analyst, it is likely that the market will continue to see a shift in focus from Bitcoin to Ethereum. This is supported by on-chain data showing large investors moving from Bitcoin to Ethereum and increased interest from institutional investors. The bearish signs for Bitcoin dominance suggest a potential altseason, where alternative cryptocurrencies outperform Bitcoin. However, market conditions are subject to change, so investors should closely monitor indicators and market developments and conduct thorough research before making decisions.
