Cryptocurrencies are doing well despite all the setbacks they have suffered over the past six months. Bitcoin, the hottest virtual currency and largest digital asset among them, has defied all naysayers and continued its rise with some setbacks, but overall The trend is to the north. Concerns about this have been voiced in most quarters, but opinion-formers now believe there are indicators of declining trust, and even demand, in the larger cryptocurrency space. Some of them exist.
Bitcoin to Ether ratio
What is attracting attention is the ratio comparing the price of Bitcoin and the second place Ether. According to a report by Bloomberg, an analysis of the Bitcoin to Ether ratio indicates that risk appetite for cryptocurrencies may be declining.
Notably, this ratio reached the 20 mark this week. In fact, it reached its highest level since April 2021. What this shows is that while there is demand for Bitcoin, there is not as much demand for Ether.
Cryptocurrency trading firm QCP Capital believes that if Ether is seen as a proxy for sentiment towards smaller tokens, this is a “very early signal” that FOMO (fear of missing out) will turn into “fear”. He said there is a possibility.
Bitcoin prices soared on the back of capital inflows into US-only exchange-traded funds (ETFs), hitting a record high of $73,798 in mid-March. Bitcoin prices have fallen by about 9% due to reduced ETF demand. While that was concerning, the indicator for small digital assets fell by about 20%.
What's next for cryptocurrencies?
For further signs of what's to come, crypto traders are eyeing the quadrennial event known as the Bitcoin halving. Effectively, this event would reduce new supply of the token, but once again doubts have been expressed as to whether the halving will live up to its reputation as a bullish development, Bloomberg noted.
Bitcoin price today
Bitcoin prices fell 1.5% to $66,940 in London on Friday, with ether itself falling as well to $3,278. Other cryptocurrencies also retreated.
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