QCP Capital analysts note that despite bitcoin's rapid drop to $59,000, funding has returned to reasonable levels and the most likely scenario is the outperformance of the eth/btc pair.
In a volatile overnight session, bitcoin (btc) quickly established a new all-time high of $69,400 only to suffer a rapid decline, falling to $59,200 in a matter of a few hours. This sharp drop resulted in the liquidation of over $1 billion in leveraged long positions on Binance alone.
However, as QCP Capital analysts noted, the market quickly recovered as the dip was bought aggressively, with the $60,000 level proving strong support. According to analysts, funding rates have returned to “reasonable levels,” hovering around 30% annually on Binance. Therefore, analysts at QCP Capital anticipate that ethereum (eth) will outperform bitcoin, noting that the narrative surrounding an ethereum exchange-traded fund (ETF) is gaining ground.
“(…) the likely scenario is ETHBTC outperformance as the eth spot ETF narrative comes into play.”
QCP Capital
Despite the reduction in leverage, forward futures still trade at a significant premium to spot prices, the analysts emphasized, adding that there has been an increase in client activity aimed at selling the spot spread. term, particularly for contracts that expire between September and December of this year. allowing investors to earn risk-free returns for the year.
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At press time, ethereum remains significantly distant from its all-time high compared to bitcoin, suggesting potential for rapid value appreciation. While bitcoin is only 4.3% behind its all-time peak reached on March 5, ethereum is behind its 2021 record by more than 20%, according to data from CoinGecko.
As the crypto landscape evolves, Wall Street giants are stepping up efforts to introduce more spot crypto ETFs, after the US Securities and Exchange Commission (SEC) approved all bitcoin ETF applications in cash at the beginning of January. Reports indicate ongoing discussions between the SEC and ethereum ETF applicants, with decisions on spot ethereum ETFs delayed until May at the earliest. VanEck's filing, in particular, awaits a response by May 23, along with applications from BlackRock, Franklin Templeton Grayscale and Invesco Galaxy.
