The two largest cryptocurrencies by market capitalization, Ethereum and Bitcoin, slowed their recovery. After a rise above critical resistance, cryptocurrencies could pull back and return to critical support levels.
At the time of writing, Ethereum (ETH) is trading at $1,840 with sideways movement in the last 24 hours. Over the past week, ETH posted a 2% loss, excluding Bitcoin (BTC) and Solana (SOL), the top 10 cryptocurrencies by market capitalization are trading in the red.
Trouble ahead for Ethereum?
Earlier today, the Chicago Mercantile Exchange (CME) Announced the launch of a new product. The platform will launch an Ethereum (ETH/USD) to Bitcoin (BTC/USD) ratio futures contract.
The financial product will follow the price of these cryptocurrencies and their correlation. That way, traders can gain exposure to both cryptocurrencies by holding a single futures contract.
According to an official announcement, the product aims to create more opportunities for merchants in the nascent industry. In the short term, however, the CME release suggests a potential downside for the two largest assets in the cryptocurrency market.
The CME product could trigger this effect
In the past, whenever the CME launched a contract based on Bitcoin or Ethereum, the price of either asset would trend lower. One pseudonymous analyst predicted problems for ETH and BTC, likely driven by a “buy the rumor, sell the news” effect.
Via Twitter, the analyst fixedreacting to the news:
If this has a similar effect to $BTC and $ETH futures in the past, then the launch of this instrument could form a pivot for the ETH/BTC pair. Perhaps more towards launch and then a rollback at the end of July? We’ll see.
In response to the forecast, another analyst claimed that a “buy the rumor, sell the news” effect will see the ETH price rally in the event. Therefore, ETH could benefit as the CME prepares to roll out its new contracts and anticipation around Bitcoin ETF applications continues.
the analyst fixed:
Wouldn’t it make more sense to buy the rumor, sell the news? So we pump before the end of July. Everything is sold out at the moment. If BTC pumps through the resistance, perhaps ETH could catch up.
Unsplash cover image, Tradingview chart
