Bitcoin’s recent decline following the approval of spot Bitcoin ETFs has not had the anticipated positive influence on its price. In contrast, Ethereum has seen a significant rise in price dominance against Bitcoin, with a notable increase over the past week alone. This increase in dominance is accompanied by a surge in new Ethereum addresses and a decline in Bitcoin forwards. These developments, along with upcoming events such as the Ethereum network upgrades and potential ETF approvals, present potential opportunities for Ethereum investors.
According to on-chain analytic firm Santiment, Ethereum’s market dominance over Bitcoin has been steadily increasing. In the past week, the dominance figure saw a notable increase of more than 22.4%. This rise in dominance is supported by the generation of an average of 89.4k new Ethereum addresses daily, highlighting the network’s growing popularity. Additionally, 96.3K wallets were created on January 16th alone. These figures indicate that Ethereum is gaining traction and attracting more investors.
Ethereum Network Upgrades
One of the catalysts driving the appeal for Ethereum is the planned network upgrades, starting with the Dencun hard fork. These upgrades have formed a bullish perspective among investors and could potentially result in Ethereum decoupling from the rest of the crypto market. The upgrades may bring improved functionality and scalability to the Ethereum network, making it more attractive to users and developers. This increased demand for Ether could further drive its price and market dominance.
Bitcoin and Ethereum Forwards
A recent analysis by QCP Capital reveals that Bitcoin forwards have experienced a deeper decline 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%. Despite the decrease in yields, ETH forwards still appear attractive, paying 11-13% annually. Selling ETH 1m 2200 Puts is also considered a decent play with yields above 21% annually. These trends suggest that investors continue to show interest in Ethereum and perceive it as a potential opportunity for profit.
Looking ahead, there are significant upcoming events that could further impact Ethereum’s market position. The Bitcoin halving scheduled for mid-April and the potential approval of spot Ethereum ETFs starting in May are anticipated events. These events could generate increased interest and demand for Ethereum, potentially leading to a rise in its dominance and price. However, it’s important to note that broader macroeconomic events may also influence the direction of the market in the interim. Investors should remain aware of both micro and macro factors that can impact Ethereum’s performance.
The supply of Ether on crypto exchanges has been consistently declining. Over the last ten days, it has dropped from 8.18% to 8.10% according to Santiment. This decline indicates that Ether holders are moving their funds from exchanges to long-term storage, expecting a price rise. The supply is nearing an all-time low of 8.05%, emphasizing the confidence of Ethereum investors in its potential. The reduction in available Ether on exchanges may further contribute to its price appreciation in the future.
Ethereum’s market dominance is on the rise, with significant increases over the past week. This increase is supported by the growing number of Ethereum addresses and the decline in Bitcoin forwards. The planned network upgrades, along with potential ETF approvals, present potential opportunities for Ethereum investors. However, it’s important to consider upcoming events and broader macroeconomic factors that may influence the market. The declining supply of Ether on exchanges indicates a positive sentiment among investors, further suggesting a potential price rise. Overall, Ethereum continues to gain momentum and attract attention in the cryptocurrency market.
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