- Ethereum’s correlation with Bitcoin hit a yearly low of 0.61.
- Subdued Ethereum spot trade volume and waning whale interest contrasted with Bitcoin’s resurgence.
In the midst of the ever-fluctuating cryptocurrency landscape, Ethereum[ETH] appeared to be facing ongoing challenges, in contrast to Bitcoin’s recent resurgence.
Is your portfolio green? Check out the ETH Profit Calculator
The decoupling
Recent data indicated a correlation coefficient of 0.61 between Bitcoin and Ethereum signifying one of the lowest levels seen this year. This suggested that Ethereum was not closely mirroring Bitcoin’s recent positive price movements.
Source: Trading View
A crucial factor contributing to Ethereum’s subdued performance was the enduring bear market conditions. Historically, during bear markets, traders tend to favor Bitcoin, according to Kaiko’s data.
Additionally, Ethereum’s spot trading volume also displayed a consistent lack of momentum over the past two months, with occasional spikes that barely surpassed the $2 billion mark.
Another significant trend was the waning interest of cryptocurrency whales in Ethereum. Data from Glassnode revealed a notable decline in the number of addresses holding 10,000 or more Ethereum coins, hitting a two-year low of just 1,074 such addresses.
? #Ethereum $ETH Number of Addresses Holding 10k+ Coins just reached a 2-year low of 1,074
View metric:https://t.co/paW9ojeWBw pic.twitter.com/hWSRRtnvuJ
— glassnode alerts (@glassnodealerts) October 5, 2023
Traders and ETFs
Furthermore, Ethereum’s perpetual futures market experienced a surge in open interest since the beginning of September. However, funding rates remained largely neutral to negative. This phenomenon reflected the market’s ambiguity, contributing to Ethereum’s prevailing uncertainty.
Source: Kaiko
Adding to the mix were the recent developments surrounding Ethereum-based exchange-traded funds (ETFs). Six futures-based Ethereum ETFs made their debut on U.S. markets, aiming to provide investors with exposure to the cryptocurrency.
However, unlike Bitcoin’s successful ETF, ProShares Bitcoin Strategy (BITO), which recorded over $1 billion in trade volume on its first day, Ethereum ETFs struggled to attract meaningful trading volumes.
VanEck’s EFUT and ProShares EETH, the two largest ETFs, recorded an average daily trading volume of just $0.5 million during their initial week of trading.
Realistic or not, here’s ETH’s market cap in BTC terms
Several factors contribute to this subdued response, including the current market environment marked by rising risk-free rates and macroeconomic uncertainty.
ETH’s trading price was $1,581 at the time of writing. It observed a decline in both its MVRV ratio and its price over the past month. However, the metric measuring transaction frequency, known as velocity, demonstrated a slight uptick during the same period.
Source: Santiment
