Over the past weekend, the cryptocurrency market experienced a tumultuous mix of emotions, characterized by fear and greed, as bitcoin fell to lows of 64,500. However, it recovered quickly and the main asset once again surpassed the 67,000 mark.
While bitcoin has shown significant resilience, the same cannot be said for ethereum.
ethereum's difficult path amid bitcoin's resilience
The strong selling of btc puts indicated an dissipation of fear among investors, who seemed eager to capitalize on the decline.
Interestingly, amid this shift in sentiment, there is a notable tilt towards greed, evidenced by the growing interest in long September and December btc calls that are targeting lofty price levels of $100-150k. According to the latest analysis According to QCP Capital, this optimism reflects a bullish outlook despite recent volatility.
The Singapore-based digital asset trading firm said ethereum presents a contrasting narrative as concerns arise as perpetual funding rates turn negative and risk reversals represent a “downward bias,” which indicates apprehension within the market about a possible drop in the price of the crypto asset despite the continued rally in alt.
Despite ethereum hitting a high of over $4,000, its highest value in two years, QCP previously noted a shift in market sentiment, evident in negative risk reversals. These reversals indicate the contrast in implied volatility between calls and puts, a change likely attributed to the declining chances of spot approval of an ethereum ETF in the US in the near future.
Following the long-awaited Dencun upgrade, which QCP had anticipated, the crypto asset saw a drop to below $3,500 over the weekend amid a market-wide decline.
Is ether overrated?
A different analysis of CryptoQuant revealed that the total supply of eth is decreasing as a result of increased network activity and the use of transaction fees for burning. The subsequent increase in staking participation was also noted, with over 31 million eth staked, indicating growing confidence in the long-term prospects of the asset.
Its network also witnessed a notable increase in activity, characterized by higher daily transaction volumes and eth transfers. However, the current high MVRV ratio implied that eth could be overvalued.
“The current high MVRV ratio suggests that eth could be overvalued, calling for a cautiously optimistic approach. Despite these challenges, the Dencun upgrade reinforces ethereum's strong fundamentals. However, the recent market preference for SOL over eth indicates that we could see some adjustments in the future.”
Binance Free $100 (Exclusive): Use this link to sign up and receive $100 free and 10% off fees on Binance Futures for the first month (terms).
<!– ai CONTENT END 1 –>
