Can ETH futures-based ETFs reverse Ethereum’s price compared to Bitcoin?

Can ETH futures-based ETFs reverse Ethereum's price compared to Bitcoin?

The Potential Reversal of Ethereum’s Decline: Insights from K33 Research

The price of Ethereum (ETH) has been experiencing a steady decline, reaching yearly lows compared to its dominant counterpart, Bitcoin (BTC). As of the time of writing, ETH is trading as low as $1,594. This decline has raised concerns among investors and the crypto community. However, a recent report from K33 Research, a renowned crypto research firm, suggests that there are hints of a potential trend reversal for Ethereum.

Ethereum Price Declines: Underlying Reasons

K33 Research has been closely monitoring the relationship between Ethereum and Bitcoin, and their recent findings shed light on the market’s shifting preferences between these two titans. The report highlights a palpable drift in market sentiment, with Ethereum’s native token facing strain and hovering at a trading value near 0.06 Bitcoin. This trend can be traced back to a pivotal moment in Ethereum’s timeline – its transition from proof-of-work to proof-of-stake consensus, known as “The Merge.”

However, Ethereum’s trajectory is not solely a result of its internal changes. External market factors have also played a role in its decline. The buzz around the Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs) sectors has quieted down, indirectly impacting Ethereum’s performance.

Lunde, a Senior Analyst with K33 Research, and Vice President Anders Helseth reflected on this scenario in their recent report. They pointed out that Ethereum has experienced a steady downward trend throughout the year as DeFi and NFT activity has faded. Without meaningful narratives or adoption stories, Ethereum has struggled to maintain strength against Bitcoin.

Ethereum and Bitcoin (ETH/BTC) price chart. Source: K33 Research. Ethereum and Bitcoin (ETH/BTC) price chart. Source: K33 Research.

Market Sentiments and Potential Catalysts

Insights from derivative traders on the Chicago Mercantile Exchange (CME) reveal a bearish sentiment towards Ethereum. Despite a notable 60% surge in open interest since August, the disparity between ETH futures prices and its spot remains considerably lower than that of Bitcoin. Lunde and Helseth interpret this data to suggest that expectations of potential ETH futures Exchange Traded Funds (ETFs) being approved in the coming weeks failed to capture the attention of CME Ethereum traders.

However, amidst the bearish landscape, K33 Research remains optimistic about a potential shift in Ethereum’s fortunes as the year draws to a close. The report highlights the potential approval of new Ethereum futures-based ETFs as a catalyst that could reverse the current trend. Such financial products could inject new vigor into the market, attracting more institutional interest and potentially driving up Ethereum’s value against Bitcoin. If approved, these ETFs would not only bolster the confidence of existing investors but may also entice new participants to join the Ethereum platform.

It is worth noting that both Ethereum and Bitcoin have seen losses over the past week, with Ethereum down 2.1% and Bitcoin down 3.7%. Ethereum is currently trading at $1,591, while Bitcoin is priced at $26,212.

Ethereum (ETH) price is moving sideways on the 4-hour chart. Source: ETH/USDT on TradingView.com Ethereum (ETH) price is moving sideways on the 4-hour chart. Source: ETH/USDT on TradingView.com

Conclusion

While Ethereum’s price has been on a downward trend, research from K33 Research suggests the possibility of a trend reversal in the near future. The decline can be attributed to both internal changes, particularly the transition to proof-of-stake consensus, and external market factors, such as the fading buzz around DeFi and NFTs.

However, potential catalysts, such as the approval of new Ethereum futures-based ETFs, offer hope for Ethereum’s recovery. These financial products have the potential to revitalize the market, attract institutional interest, and increase Ethereum’s value against Bitcoin. Despite recent losses, the crypto community remains optimistic about the future of Ethereum and its ability to reclaim its position in the blockchain industry.

Featured image from Shutterstock, Chart from TradingView

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

News

Australia's central bank has completed its pilot program for a central bank digital currency (CBDC) and has decided to postpone making a final decision.

The central bank announced that Australia's decision regarding the introduction of a CBDC will take some time but is ...

Bitcoin

Tesla’s Bitcoin Holdings Stay Put, Drawing Attention in Q4 Earnings Report

Tesla Inc, an established leader in the electric vehicle industry, has maintained its Bitcoin holdings without any bu...

Web3

🌐 Make Ethereum Cypherpunk Again! Vitalik Buterin Calls Out the Lost Vision of Web3

Vitalik Buterin, the founder of Ethereum, recently released a thought-provoking blog post reminding the community of ...

Markets

Binance CEO dismisses buying bank as a solution to crypto debanking issue

Yesterday, Binance CEO Zhao expressed his opinion that a bank owned by Binance would not resolve the issue of cryptoc...

News

Meta to invest in AR/VR and Metaverse technologies at Connect Conference.

Enthusiastic attendees of the highly anticipated Meta Connect conference are eagerly anticipating the exciting unveil...

News

CoinList Staking Fund: Earn Crypto with Ease and a Dash of Humor

Attention all US Fashionistas! CoinList, the go-to launchpad for crypto projects, has just launched a staking fund ex...