Compared to the dominant cryptocurrency Bitcoin, Ethereum's price hovers around the annual low point. This decline has been evident since September 2022, causing ETH to drop to $1594 at the time of writing this article
Compared to the dominant cryptocurrency Bitcoin, Ethereum's price hovers around the annual low point. This decline has been evident since September 2022, causing ETH to drop to $1594 at the time of writing this article.
However, according to the latest report from cryptocurrency research firm K33 Research, there are signs of a potential trend reversal amidst concerns about the significant decline in Ethereum.
The root cause of Ethereum's price decline
K33Research is a well-known figure in the field of cryptocurrency analysis and has been closely monitoring the relationship between Ethereum and Bitcoin. Their recent findings highlight a significant shift in market preferences between these two giants.
Ethereum and Bitcoin (ETH/BTC) Price Chart
Ethereum native tokens are under pressure, with trading prices hovering around 0.06 Bitcoin. This trend can be traced back to a critical moment on the Ethereum timeline - the shift from workload proof to equity proof consensus, which is known as' consolidation '.
However, the trajectory of Ethereum is not just a product of its internal changes. External market factors also play a role. The heat in the fields of decentralized finance (DeFi) and non homogeneous tokens (NFT) has gradually subsided, indirectly casting a shadow over Ethereum's performance.
Senior analyst Lunde and Vice President Anders Helseth of K33 reflected on this situation in their recent report. Analysts point out that:
With the decline of DeFi and NFT activities, Ethereum experienced a steady downward trend throughout the year. Due to the lack of meaningful narratives or storytelling, Ethereum has been striving to maintain its strength relative to Bitcoin
Market sentiment and potential catalysts
In addition, the insights of derivatives traders on the Chicago Mercantile Exchange (CME) reveal bearish sentiment towards Ethereum. The report states that despite a significant 60% increase in open positions since August, the gap between ETH futures prices and spot prices is still much lower than that of Bitcoin.
Lunde and Helseth's explanation for this data is that the expectation of potential ETH futures ETFs being approved in the coming weeks has not caught the attention of CME Ethereum traders.
However, not everything is so severe for Ethereum. Despite the pessimistic outlook, analysts at K33 are optimistic about the year-end shift. According to the report, the potential approval of a new exchange traded fund (ETF) based on Ethereum futures may reverse this trend.
Such financial products can inject new vitality into the market, attract more institutional interest, and potentially drive the value of Ethereum relative to Bitcoin. If approved, they can not only enhance the confidence of existing investors, but also attract new participants to join the ETH platform.
Meanwhile, Ethereum and Bitcoin have experienced losses in the past week. Ethereum fell 2.1%, with its current trading price at $1591; Bitcoin fell 3.7% and its current trading price is $26212.
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