ETH underperforms against BTC
According to data from cryptocurrency research firm K33 Research, Ethereum's trading price relative to Bitcoin has been falling since September 2022. At the time of writing, Ethereum was trading at about 0.06 Bitcoin, still hovering at the lowest level of the year. .
K33 analyst Vetle Lunde and vice president Anders Helseth noted in their latest report:
“Ethereum has continued to show a downward trend this year due to reduced DeFi and NFT activity. Without any meaningful narrative or adoption story, it will be difficult for Ethereum to maintain strength relative to Bitcoin.”
In addition, analysts also pointed out that although open interest in Ethereum futures contracts on CME has increased by 60% since August, traders still have a bearish view on Ethereum, which means that in the next few days, During the week, Ethereum traders on CME didn’t hold out much hope for any real capital infusions from the Ethereum futures ETF in the future.
A pivotal October for ETH
Although a number of data indicate that the outlook for Ethereum is not optimistic, analysts at K33 still believe that the approval of the Ethereum Futures ETF is expected to reverse this trend. Therefore, it is a wise choice to shift positions to Ethereum at the end of the year.
Multiple applications for Ethereum futures ETFs have been submitted in recent months, including from Ark Invest, ProShares, Valkyrie and Grayscale, among others. The Ethereum Futures ETF is expected to receive a final ruling in mid-October. Bloomberg ETF analyst Eric Balchunas said on the X platform that the Ethereum futures ETF has a 90% chance of being approved in early October. It is expected that the first one to be approved will be Valkyrie’s “BTC and ETH Hybrid ETF”, and then more than a dozen other applications will be approved one after another.
Cryptocurrency market awaits revitalization
Vetle Lunde and Anders Helseth pointed out that last week’s interest rate decision did not have a significant revitalizing effect on the cryptocurrency market, and market prices are still fluctuating within a narrow range with low trading volume and low volatility. They specifically mentioned that Bitcoin’s performance during Federal Reserve meetings has been its most consistent in the past two and a half years.
Analysts said the outlook for derivatives markets ranged from mixed to bearish, with continued divergence between CME and offshore derivatives traders. While CME’s Bitcoin premium for next month is 0.5%, showing slightly bullish sentiment, offshore funding rates are well below neutral, suggesting the market is more bearish.
While option pricing suggests a more optimistic outlook for the long-term market, the sentiment has turned slightly bearish with the recent decline in Bitcoin’s price. Vetle Lunde and Anders Helseth suggest that short-term traders should pay close attention to the trading direction and aggressiveness of CME traders as indicators of upcoming price movements.
