Cryptocurrency markets have had an unusual trend for the past few weeks because the head of the trend has been remarkably Ethereum. In the last few days, this effect has increased more significantly. While many assets in the cryptocurrency market lost 6-7% in value, Ethereum triggered a relief rally and reversed the trend.
The positive news from the Ethereum front is cryptocurrency found a positive response in the market and enabled the price to move together. From mid-July to mid-August, the S&P 500 rallied 16.2%, while Bitcoin and Ethereum responded with a 33.3% and 102.8% rally, respectively. Although these rallies looked positive, their effect was short-lived and the trend reversed sharply.
Koinfinans.com As we reported yesterday, US stock indices climbed the fastest in nearly a month as bond yields fell. In fact, investors could say they ignored the hawkish statements made by Federal Reserve officials on Wednesday. The Nasdaq Composite, S&P 500 and Dow Jones Industrial Average last reached a one-day higher percentage gain on August 10. But investors continue to doubt whether this is a long-term trend, according to Reuters.
The macro rise also reflected positively on cryptos. The last candle on all charts was green, given the high correlation that the markets shared. However, just as investors do not expect the uptrend in the stock market to continue, bitcoin It seems that the rally will not be sustainable either. For Ethereum, however, the situation may be slightly different.
While the price action is currently bullish, Ethereum price is much more volatile. Although it can be clearly seen that the trend is leading its return, it managed to be the asset that was most affected by the decline experienced the previous day.
The sharp price fluctuations of Ethereum recorded in the last two days can be attributed to the speculative trading carried out by market participants in the derivatives market. As shown below, spot:futures volume has been declining for ETH recently, suggesting that traders compared to investors are currently making the decisions.
However, there is an opposite trend in Bitcoin. Therefore, it is theoretically possible to conclude that when a forward pullback occurs, Bitcoin’s losses will be quite small compared to Ethereum.
The crypto market is poised to go through an options train that ends tomorrow, with the majority of Bitcoin traders appearing to be bearish. According to data from CoinGlass, BTC’s put:call ratio remained at 1.21, showing that there are currently more sell contracts than buy contracts.
In the case of Ethereum, however, the ratio remained below 1 – at 0.91 – clearly showing that traders are optimistic. Therefore, over the next few trading sessions, if the buy bias persists, it indicates that traders are manipulating the price to gain profits at expiry tomorrow. For the same to happen, it will be equally important for the exchange to support the directional trend during Thursday’s trading hours.
Although Bitcoin and Ethereum traders expect the market to move in different directions, one thing is certain: volatility will continue for the next 24 hours.
You can follow the current price action here.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.