K33 Research Anticipates a Game-Changing Month, Expects Bitcoin-Ethereum Balance to Shift
K33 Research, a cryptocurrency research firm, recently released a statement discussing the balance between Bitcoin and Ethereum prices. The report suggests that Ethereum is set to make a significant comeback against Bitcoin this month, after underperforming since the start of the year.
One of the key factors contributing to this expected shift is the launch of Ethereum’s first US-listed ETF in July. This is predicted to generate a surge in institutional demand for ETH, with K33 Research estimating that the ETFs will absorb 0.75% to 1% of all ETH in circulation within the first five months of being on the market.
While there may be a short-term “sell the news” event following the ETF launch, similar to what occurred with Bitcoin ETFs in January, K33 Research believes that Ethereum’s “favorable supply dynamics” will give it relative strength in the coming months.
Vetle Lunde, a senior analyst at K33 Research, stated, “ETFs are a solid catalyst for relative ETH strength as the summer progresses and flows accumulate. I definitely see current ETH/BTC prices as an advantage for patient traders.”
On the other hand, Bitcoin holders are bracing themselves for a potential downside due to the upcoming distribution of 141,686 BTC ($8.8 billion) from the defunct Bitcoin exchange Mt. Gox. Analysts speculate that this long-awaited event could result in significant selling pressure on Bitcoin.
In their recent market update, K33 Research stated, “We expect clear selling pressure on Bitcoin in a dry summer market, with the chop suey range widening as the leaves turn orange until better days emerge.”
The introduction of the new Ethereum ETF has also contributed to a record-high open interest in CME ETH, currently sitting at 372,000 ETH ($1.26 billion). Analysts interpret this heightened demand as an indication of an intention to make directional transactions involving ETH before the ETFs go live, although the specific direction of these transactions remains uncertain.
The report also highlights that the soft funding rates suggest balanced expectations, with neither bullish nor bearish positions dominating. This underscores the uncertain market outlook and lack of consensus as ETH ETF launches approach.
Disclaimer: This article does not constitute investment advice.
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