The recent ratio of Bitcoin (BTC) and Ethereum (ETH) prices suggests a potential decline in risk appetite in the crypto market. This ratio has reached its highest level since April 2021, indicating stronger demand for Bitcoin than its smaller rival Ethereum.
This development led crypto trading firm QCP Capital to speculate that the change in this ratio could be an early sign of a shift from “fear of missing out” (FOMO) to outright fear.
Bitcoin and Ethereum performance
In terms of recent market trends, the second quarter of 2024 started relatively calmly.Bitcoin price drops below $70,000 and hasn't fallen since then limited range It has been hovering between $65,000 and $68,000 for the past few days, although it briefly touched the $70,000 mark on Monday.
according to According to QCP's analysis, inflows into the spot Bitcoin exchange-traded fund (ETF) market were not large enough to cause large price movements in either direction.
As a result, the company confirmed that its funding rate has stabilized, with the front end of the forward curve decreasing from a previous high of 50% to less than 20% now.
Interestingly, the front end front curve decreases, but the backend remains elevated. This has led to increased interest in spot forward basis positions further out, with the potential for continued demand for long-term Bitcoin calls extending into 2025.
On the other hand, Ethereum's performance has been relatively weak. QCP also notes that the ETHBTC ratio is cross-testing a key support level after falling below 0.05. In particular, the selling of Ethereum calls continues, resulting in reduced volatility and downward pressure on the price.
Ultimately, QCP found that these developments have sparked speculation about whether this could be an early sign of the disease. FOMO Fear has turned, especially about Ethereum's role as a proxy for altcoins.
Bitcoin may find support from upside demand and ETF inflows, but Ethereum’s performance and impact on altcoins will be important factors to watch.
Will BTC experience a double top?
Renowned crypto analyst Crypto Con raised an interesting question as to whether BTC is poised for a double top similar to the patterns observed in 2013 and 2021.
Analyzing past market cycles, Crypto Con highlight More obvious double tops, such as those witnessed in the 1st and 3rd cycles of 2021, caused the initial significant spike in the Fisher Transform indicator.
In contrast, the 2017 double top formation showed a more subtle initial rise in June. In particular, as seen in the chart below, all final cycle tops ended with the usual bearish divergence, with the indicator falling while the price reached higher levels.
Bitcoin is currently approaching levels similar to 2017, as seen at the bottom of the chart. Crypto Con could stabilize around these levels without the Fisher Transform indicator spiking to the lines seen in 2013 and 2021. single top formationis the analyst's most likely outcome for December 2024, marking the top of this cycle.
Featured image from Shutterstock, chart from TradingView.com
