ethereum price surpassed $2,500 on January 15, further extending its post-ETF approval lead over btc; On-chain data trends provide vital insights into underlying drivers.
“Buy the rumor, sell the news” is a popular trading strategy in which speculators make purchases before a major news event in the hopes of selling at a profit when the news is confirmed. btc speculators capitalized on this trading strategy to make record profits in the run-up to the bitcoin ETF approval verdict. Vital on-chain data trends now reveal that ethereum (eth) has also begun to show early signs of a similar phenomenon.
btc speculators made 97% gains in the run-up to ETF approval
The bitcoin spot ETF's quest for approval suffered multiple setbacks recently, with the US Securities and Exchange Commission (SEC) citing concerns over market manipulation, oversight and liquidity.
However, on June 15, 2023, things turned positive when BlackRock (NASDAQ: BLACK) officially filed for a spot bitcoin ETF with the SEC. With more than $13 trillion in assets under management (AUM), BlackRock is one of the largest asset management companies in the world.
BlackRock's entry into the fray generated optimism about bitcoin derivatives and effectively got the rumor mill spinning.
On June 15, Blackrock's official filing date, the price of bitcoin was trading around $24,800. In the first two weeks, speculators who imitated the rumor from the beginning caused the price of bitcoin to rise by 25% to reach $30,000 for the first time in 12 months, dating back to June 2022.
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Between June 15 and January 11, when the SEC finally confirmed the news, the price of bitcoin nearly doubled, going from $24,800 to a local high of $48,890. This effectively sent speculators who believed the rumor after BlackRock's presentation to make a 97% profit.
Unsurprisingly, the wave of profit-taking that followed the SEC approval has seen the price of btc skyrocket by as much as 15%, to $42,500 as of January 15. This affirms the entire cycle of buy the rumor, sell the rumor. news cycle in the event bitcoin ETF Narrative.
Now that the bitcoin ETF has come to an end, investors have shifted their focus to ethereum. BlackRock had filed for an ethereum spot ETF on November 16. In a recent interview on January 12, BlackRock CEO Larry Fink re-emphasized the value of an ethereum spot ETF as an asset class.
While the price of btc fell by 3.8%, ethereum rose by 13.5% last week. In fact, the price of eth has outperformed btc by about 10%.
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Interestingly, in addition to this divergent interaction between eth and btc price movement over the past week, the strategic on-chain movements of ethereum whales since January 11 also corroborate early signs of the buy-the-rumor strategy being played out. developing in the eth markets.
ethereum Whales Have Acquired $1.4 Billion of eth Since bitcoin ETF Approval Verdict
On paper, ethereum price outperformed btc by 10% last week, according to data from Coin360. Looking beyond the price charts, a vital on-chain indicator has revealed that eth's performance has been boosted by corporate entities and high net worth investors who increased their buying pressure shortly after the eth ETF approval verdict. bitcoin.
Santiment's “supply held by top addresses” metric shows a real-time snapshot of the aggregate balances currently controlled by the largest wallets in a crypto ecosystem.
The latest readings show that the top 1,000 ethereum wallets had just 66 million eth in accumulated balances as of January 10.
But since the focus shifted to the ethereum spot ETF, strategic eth investors have gone on a buying spree, adding 570,000 eth to bring their balances to 66.5 million eth as of press time on January 15.
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Valued at the current price of $2,540, the ethereum “top holder supply” chart above illustrates that the top 1,000 investors have added $1.4 billion worth of eth coins to their holdings in the last four days alone.
Intuitively, when the largest shareholders rapidly increase their balances by hundreds of millions, it is interpreted as a strong bullish signal. Firstly, the buying trend among major stakeholders increases overall trust within the cryptocurrency ecosystem.
Since large holders are likely to hold their positions longer than small swing traders, this accumulation puts eth in prime position to make historic gains in the coming weeks.
<img loading="lazy" decoding="async" width="1600" height="614" src="https://crypto.news/app/uploads/2024/01/image-45.png” alt=”ethereum Market Dominance Increases After bitcoin Spot ETF Approval”/>
But more importantly, the timing of the recent buying spree suggests that investors are optimistically buying the rumor that the approval of the bitcoin ETF will increase the likelihood that the ongoing eth filings will also get a positive verdict from the SEC.
The ethereum Dominance (eth.D) chart further affirms this stance. ethereum has grabbed 14% more market share between January 10 and 15, while the price of bitcoin has decreased to an almost identical 15%.
This suggests that speculative traders are selling the news on btc, quickly buying the rumor ahead of a potential eth Spot ETF approval verdict.
eth Price Forecast: Can ethereum Hit $5,000 in 2024?
From the data points discussed above, the accumulation of large-holder wallets and the growing dominance of eth suggest that the buy-the-rumor strategy is now widely in play in the ethereum markets.
Given that bitcoin had seen gains of 97% in the lead-up to the ETF approval verdict, a similar performance could put eth in line to reach $5,000 in the event of a positive outcome.
But in the short term, eth bulls will have to scale the $2,900 resistance to maintain momentum. IntoTheBlock's global money entry/exit chart, which highlights potential support/resistance points using historical entry prices of current eth holders, also supports this eth prediction.
It shows that with eth prices currently trading above $2,500, 91% of all eth holders are now in profit positions. With the eth ETF approval process coming to the fore, these holders could become less and less willing to sell.
However, the 8.5 million ethereum holders who purchased 4.1 million eth coins could pose significant resistance if they take early profits as prices approach their breakeven point.
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The bears could overturn this bullish prediction if the eth price unexpectedly drops below $2,000. However, 7.9 million investors purchased 43.4 million eth at the maximum price of $2,039.
Considering this is the largest group of current eth holders, they likely have enough in the tank to reverse such bearish pressure.
