As a seasoned analyst with over two decades of experience in the financial markets, I have seen numerous bull and bear cycles come and go. The recent surge of Ether (ETH) outshining Bitcoin (BTC) is indeed intriguing, and it seems we might be witnessing an “altseason” as predicted by some market observers.
In the realm of cryptocurrencies, Ether (ETH) surpassed Bitcoin (BTC) in both the main market and associated derivatives following the U.S. November 5 presidential election. This trend has continued to build momentum, as stated in a December 2 report by crypto exchange Bybit.
In November, Ether exhibited notable growth compared to Bitcoin, as evidenced by the substantial decreases in the comparison of their direct prices, according to Bybit’s November 2024 Volatility Review, a collaborative effort between market researchers Block Scholes.
The rising interest in ETH options suggests that traders are progressively preferring Ethereum, according to Bybit’s statement.
The report indicates that Ether’s performance improved significantly following the announcement made by Gary Gensler, the Chairman of the US Securities and Exchange Commission (SEC), about his intention to resign on November 21st. This announcement reportedly added extra momentum and focus to the asset.
Since then, “[t]his most recent move has been sustained.”
Is altseason here?
According to Bybit’s analysis, the dominance of Ethereum (ETH) is most noticeable in the spot market. The proportion of ETH to Bitcoin (BTC) has increased significantly over this period, rising from approximately 0.0325 on November 21st to over 0.04 as of December 6th, as observed by TradingView.
Hartmann Capital founder Felix Hartmann believes the pivot from BTC to ETH is a signal that Wall Street is “officially joining the fun” on the “alt rotation.”
During the week starting November 26th, Bitcoin investment funds experienced withdrawals amounting to approximately $457 million – this being the first substantial withdrawal since September, as per CoinShares’ Weekly Digital Asset Fund Flows Report for December 2nd. Simultaneously, Ethereum investment funds recorded inflows of around $634 million during the same timeframe.
In recent times, the influence of Bitcoin in the cryptocurrency market has noticeably decreased. It had peaked at over 58% dominance on November 21st, but as of December 6th, its dominance dropped to below 52%, according to data from CoinStats.
Expecting volatility
Meanwhile, traders are bracing for a rise in ETH volatility, according to Bybit.
In November, it was noted that the options market for Ethereum (ETH) saw an increase in volatility, indicating a higher appetite for ETH option contracts compared to Bitcoin (BTC), as suggested by Bybit.
Bybit emphasized that this is a resumption of their standard routine for the duo, not an unexpected interruption or break from the norm.
“ETH has, throughout almost its entire history, moved with a high correlation to but much larger volatility than BTC.”
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2024-12-06 20:50