BTC drops to near $60k, ETH holds above $3,300

The launch of spot Ethereum ETFs could help ETH outperform Bitcoin in the weeks following its official launch in the United States, say analysts at K33 Research.

The ETFs, which are expected to launch as early as July 8, are a “golden egg” for Ether’s price action while Bitcoin will face selling pressure as $8.5 billion is repaid to creditors of collapsed exchange Mt. Gox starting this week, K33 analysts Vetle Lunde and David Zimmerman said in a note. report July 2.

Singapore-based cryptocurrency trading firm QCP Capital has emphasize market focus on this issue.

“The Mt Gox recapture is scheduled to take place this week. This amount of BTC up to 140,000 tokens will continue to put pressure on the market, especially since the exact release schedule is currently unknown.”

Despite these concerns, Bitcoin still found support above $60,000, while Ethereum remained above $3,300, which is a positive sign, according to QCP Capital.

Source: Coingecko

Crypto analyst Ali has pointed out the risk of significant liquidation in the market if Bitcoin recovers and breaks above the psychological barrier of $62,000.

“Over $1 billion will be liquidated if Bitcoin recovers to $62,600”.

Over $1 billion will be liquidated if #Bitcoin now rebounds to $62,600! pic.twitter.com/6gBiTTkPiH

— Ali (@ali_charts) July 3, 2024

Ali too identify important resistance levels for Bitcoin, claims:

“One of the most important resistance areas for Bitcoin is $65,795. If BTC can break through this level, the next important target is $78,700!”

Source: X

Ether has underperformed Bitcoin for over a year, while BTC has posted market-leading gains thanks to over $14 billion in flows into spot ETFs by 2024.

Lunde and Zimmerman of K33 Research said it was reasonable to assume that ETH prices would “fall shortly after the ETF launches” but – like what happened later with Bitcoin – inflows into spot funds would likely boost ETH prices.

“ETFs are a solid catalyst for ETH relative strength as the summer progresses and flows accumulate, and I certainly view the current ETH/BTC price as a bargain for patient traders.”

“We maintain our bullish outlook on ETH, projecting net inflows equivalent to 0.75-1% of ETH circulating supply in the five months following launch.”

Analysts say the market remains “stubbornly” opposed to their view, pointing out that Ether futures are trading at a relative discount to Bitcoin futures and the ETH/BTC ratio is currently at 0.055.

Over the past 12 months, ETH’s value has steadily declined against Bitcoin, falling to a yearly low of 0.045 on May 24.

ETH/BTC reversed quickly following the SEC’s abrupt decision to approve an Ether ETF, surprising analysts and seeing ETH/BTC rise to its current value of 0.055.

ETH/BTC has been falling since last year, only reversing after the surprise approval of an ETH ETF. Source: TradingView

Despite this, Lunde and Zimmerman said that Ether futures open interest* remains “unabated,” suggesting that many traders are using large leverage to bet on ETH’s potential price action ahead of the ETF’s launch.

OI ETH futures have spiked ahead of the ETF launch. Source: K33 Research

*OI (open interest) is a measure of the total value of all outstanding or “unsettled” futures contracts on exchanges, and is also an indicator of market price momentum as well as trader sentiment around a particular asset.

Itadori

According to BeinCrypto