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Analysts' Insights

Analysts' Insights

Bitcoin Dominance Jumps >50%, Ether No Longer ‘Ultrasound’

1) The current Bitcoin (BTC) price at $27,585 is above the 50d MA of $26,575, signalling a bullish trend. In contrast, Ethereum (ETH) is priced at $1,579, below the 50d MA of $1,636, indicating a bearish trend. WoW, ETH prices have decreased by -5.1%, while Bitcoin experienced a WoW price increase of +0.2%. Ethereum is currently underperforming Bitcoin, as evidenced by the (20d) MA, which shows the ETH / BTC ratio is going down, driven by beta factors. This suggests a negative outlook; caution is advised.

The current Bitcoin (BTC) price at $27,585 is above the 50d MA of $26,575

2) Bitcoin’s dominance has risen above 50%, reaching its highest level since April 2021. In September 2022, during the Ethereum Merge, Bitcoin’s dominance was at 34.9%, while Ethereum’s stood at 18.4%. Ethereum’s dominance of the crypto ecosystem has since decreased to 17.7%, while Bitcoin stands firm at 50.3%.

3) ETH prices have also fallen below the critical technical level of $1,600 (last recorded price at $1,580). Weak fundamentals and the absence of news regarding the EIP-4844 upgrade have raised concerns about potential further declines. These ongoing concerns have led to a more cautious stance on Ether, in contrast to the bullish outlook for Bitcoin.

4) Last week’s launch of Ether ETFs based on futures briefly boosted ETH prices. However, these ETFs failed to gain significant market interest due to monthly rolling and operational costs, making them underperforming proxies of actual ETH prices. For example, the Bitcoin ETF based on futures is underperforming Bitcoin by 20% this year.

5) Ethereum has experienced a higher issuance (68k ETH) compared to its burn (38k), over the last 30 days, which means it is no longer ‘ultrasound’ money and is considered inflationary. However, this annual inflation rate remains relatively low at 0.3%, contrasting with Bitcoin’s inflation rate of 1.6%. Meanwhile, real-world inflation stands at 3.7%.

6) Ethereum is no longer the leading crypto ecosystem generating the most ‘fees’. In the past 30 days, Tron generated $87.4m in fees and provided token incentives of $65.8m, resulting in net earnings of $21.6m. Ethereum, on the other hand, generated $82.2m in fees but offered token incentives of $82.9m, leading to negative earnings of -$20.6m. Other platforms, including Lido Finance ($46.9m), friend-tech ($30m), Bitcoin ($27m), Uniswap ($23m), Aave ($8.8m) and BNB Chain ($8m), outperformed Ethereum in generating fees.

7) Similar to the price of Ether, TVL has dropped 3-5% across the board except for JustLend, which increased by +0.2% during the last week. Lido’s TVL declined by -4.1%, Aave by -3.4%, MakerDao by -4.6%, and Uniswap by -4.9%. Overall, TVL is at its lowest since February 2021.

8) The futures funding rate for both Bitcoin (3.8%) and Ethereum (5.5%) is positive, indicating a bullish sentiment. Our Bitcoin Greed & Fear Index stands at 69%, while the Ethereum Greed & Fear Index is at 22%. The RSI for Bitcoin is 56%, and the Ethereum RSI is at 40%

9) The crypto market cap stands at $1.07trn, showing a -1.8% decrease from the previous week, with an avgerage weekly volume of $27.7bn, -8% lower than the week before. The weekly Bitcoin volume was $11.7bn, +12% higher than the average. while Ethereum volume was $4.9bn, +2% above average.

10) Tether’s USDT and Circle’s USDC supplies increased by $200m last week. Tether’s USDT market cap now stands at $83.4bn, which is 0.1% higher than average, despite a -14% lower volume at $20.8bn. Lower volumes paint a different picture, while the higher market cap is bullish. Binance’s average daily derivatives volume reached $25.4bn, +6% higher than the average. With a market share of 46%, Binance’s average daily spot volume was $5bn, +13% above the average, with a market share of 56%.

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