Bitcoin (BTC) and Ethereum (ETH) have recently entered a period of price stagnation following significant fluctuations. BTC trading has notably calmed down, with transaction volumes dropping from 70% to 50%, resulting in reduced volatility. This lull in activity begs the question: is there a storm brewing on the horizon?
BTC and ETH Show Correlation
During market consolidation, many traders opt to accumulate long positions. However, despite this trend, most traders have adopted a bearish stance towards BTC and ETH.
In the last 24 hours, the percentage of short positions taken against BTC has increased from 49% to 54%. Nonetheless, there is a glimmer of hope for the future.
The upcoming launch of Hong Kong-based spot ETFs for both BTC and ETH could open the floodgates for institutional capital from Asia. This development may prove beneficial for BTC and ETH, potentially reversing the current bearish trend surrounding these cryptocurrencies.
BTC and ETH Show Correlation
In recent weeks, the flagship cryptocurrency BTC and the leading altcoin ETH have displayed significant price correlation. Both cryptocurrencies have experienced corrections, adding to the prevailing bearish sentiment.
Furthermore, the trading speed of BTC and ETH has recently slowed down, evident in the charts. Additionally, the MVRV ratio for both coins has increased, indicating that most addresses holding these cryptocurrencies are currently profitable. Moreover, there has been an uptick in the number of long-term BTC holders, as reflected in the difference between long and short positions.
At the time of writing, BTC is trading at $63,340, while ETH stands at $3,136. It has been noted that the $3,200 level poses a critical resistance for ETH.
Disclaimer:
The information provided in this article should not be construed as investment advice. Investors should be aware of the high volatility and associated risks of cryptocurrencies and should conduct their own research.
