The recent relationship between Bitcoin (BTC) and Ethereum (ETH) prices suggests a potential decline in risk appetite in the crypto market. The ratio reached its highest level since April 2021, indicating stronger demand for Bitcoin than its smaller rival, Ethereum.
This development led crypto asset trading firm QCP Capital to speculate that this change in ratio could be an early indication of a transition from “fear of missing out” (FOMO) to outright fear.
Bitcoin and Ethereum Performance
Considering recent market trends, the second quarter of 2024 started with relatively subdued activity. The price of Bitcoin fell below the $70,000 mark and remained. limited scale between $65,000 and $68,000 in recent days, despite briefly touching the $70,000 mark on Monday.
According to According to QCP analysis, the inflow of funds into the Bitcoin Exchange-Traded Fund (ETF) spot market was not substantial enough to drive significant price movements in either direction.
As a result, the company noted that funding rates have stabilized and that the front end of the forward curve has declined from previous highs of 50% to less than 20% currently.
Interestingly, while the front of the direct curve decreased, the backend remains elevated. This has led to interest in further rolling spot-forward positions, potentially driven by continued demand for long-term Bitcoin calls extending into 2025.
On the other hand, Ethereum’s performance has been relatively poor. QCP also notes that the ETHBTC index tests a critical support level after breaking below 0.05. Notably, there has been sustained selling of Ethereum options, resulting in lower volatility and downward pressure on the price.
Ultimately, the QCP concludes that these developments are sparking speculation about whether this could be an early sign of FOMO turning into fear, especially about Ethereum’s role as a proxy for altcoins.
While Bitcoin may find support from higher demand and ETF inflows, Ethereum’s performance and its impact on altcoins will be important factors to watch closely.
Will BTC Experience a Double Top?
Renowned crypto analyst Crypto Con has raised an intriguing question about whether BTC is poised for a double top similar to the patterns seen in 2013 and 2021.
Analyzing past market cycles, Crypto Con highlights that more obvious double tops, such as those witnessed in the first and third cycles of 2021, triggered significant initial spikes in the Fisher Transform indicator.
In contrast, the 2017 double top formation showed a more subtle initial rise in June. Notably, all of the cycle’s final tops ended with a regular bearish divergence, where the price reached higher levels while the indicator fell, as can be seen in the chart below.
![FOMO Gives Way to Fear: Bitcoin-Ethereum Relationship Signals Change in Crypto Sentiment 1 Bitcoin](https://thegurumedia.com/wp-content/uploads/2024/04/GKVLJ3iXkAAi7yJ.jpeg)
Currently, Bitcoin is approaching levels similar to those seen in 2017, as seen at the bottom of the chart. Crypto Con suggests that if the Fisher Transform indicator can consolidate around these levels without reaching the line seen in 2013 and 2021, this could indicate a greater likelihood of a single top formationwhich is the analyst’s most likely result, for December 2024, marking the top of this cycle.
Featured image from Shutterstock, chart from TradingView.com
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