Ether prices are falling relative to Bitcoin prices
Good morning. Here’s what happens:
Prices: Bitcoin Holds Steady Near $23K for Another Day; ether remains above $1600.
Insight: The price of ether is falling relative to bitcoin.
Bitcoin rises above $23K and pulls back again
Bitcoin cracked the high of $23,000 on Monday before pulling back just below that threshold in a repeat performance from the weekend that continued to reflect renewed investor optimism.
The largest cryptocurrency by market capitalization recently traded at $22,968, up almost a percentage point in the last 24 hours, BTC is up more than 35% since the start of the year amid concrete signs that prices are falling without the economy falling into a precipice recession.
Still, a number of analysts are not convinced that the rally will last after a nearly 14-month bear market and a series of crypto debacles that have shaken the public’s already fragile faith in the industry.
In a weekly commentary, Jeff Dorman, chief investment officer at digital asset investment firm Arca, highlighted bitcoin’s decline and “a sharp renaissance” of tokens from “applications and protocols largely left for dead”, but also the difficulty of predicting whether the current upswing was ” only a bear market rally or if price increases will reflexively trigger enough economic activity to justify the price movements.”
“On a micro level, most individual applications and protocols are still near troughs for users and activity,” although many have risen above 100% in recent weeks,” Dorman wrote, adding, “The market is trying to find equilibrium, something between last year’s dead zone and 2021’s euphoria.”
Ether also rose and then fell on Monday, but continued to trade comfortably above $1,600, roughly flat from Sunday, the same time. Other major cryptos were mixed with AVAX, the token of the base layer protocol Avalanche, and XRP, the original crypto of the open source public blockchain XRP Ledger, up by more than 4% and 5%, respectively, but AXS, the management token of the gaming platform Axie Infinity, falling more than 12%. AXS had risen more than 40% on Sunday. The CoinDesk Market Index (CMI), a measure of leading cryptos’ market performance, was up slightly.
Stock indexes closed higher to continue their largely uptrend this year, with the tech-focused Nasdaq and S&P 500 jumping 2% and 1.2%, respectively, amid market hopes that the U.S. Federal Reserve will scale back its next rate hike from 50 and 1.2%. Increases of 75 basis points (bps) in the last eight months to 25 bps.
Meanwhile, lawyers for Genesis Global told a federal bankruptcy court in New York City on Monday that they have been working with creditor representatives and the US Trustee’s Office “around the clock” for the past two months to reach a “consensual resolution” with the embattled company’s creditors. Earlier this month, Genesis Global Holdco – the holding company of Genesis Global Capital – and two of its subsidiaries, Genesis Asia Pacific (GAP) and Genesis Global Capital (GGC), filed for Chapter 11 bankruptcy protection – part of the fallout from crypto exchange FTX collapse. Genesis is a CoinDesk sister company.
In the firm’s commentary, Arca Chief Financial Officer Michael Dershewitz, the chair of Arca’s Risk Committee, wrote that the Chapter 11 filing represented “an endgame” to “a protracted public insolvency.”
“Chapter 11 is a useful process for holding liability and negotiating a court-approved restructuring,” Dershewitz wrote, adding, “We can’t add much to predict how these negotiations will end, but we are watching on the edge of our seats. “
Ether-Bitcoin currency pair drops 8%
Ether has declined relative to bitcoin, despite becoming deflationary again.
The ETH/BTC currency pair has fallen 8% since January 11 as the price increase of bitcoin has been more pronounced than that of ethers.
The decline in the ETH/BTC ratio comes as the supply of ETH has decreased. ETH’s current supply is currently 2788 ETH lower than the September 2022 supply.
The Relative Strength Index (RSI) for the ETH/BTC pair has since fallen below 40, reaching levels last seen in December.
A further decline below 30 could provide a compelling opportunity for investors bullish on ETH to increase their positions.
Bitcoin (BTC) topped $23,000 for the first time since August before retreating. This came as play-to-earn giant Axie Infinity’s AXS cryptocurrency rallied despite the impending unlocking of millions of dollars worth of tokens. Opimas LLC CEO and founder Octavio Marenzi weighed in. Compound Labs founder Robert Leshner and Bitwise Asset Management General Counsel Katherine Dowling also joined the conversation.
