Big investors have been progressively moving their attention away from Bitcoin and toward Ethereum institutional investors are avoiding the Bitcoin futures market, says JP Morgan analysts
As investors increasingly flock to Ethereum, the recent downturn in futures is bad for Bitcoin
Since August, institutional investors have started shifting their attention away from Bitcoin and toward Ethereum, the second-largest cryptocurrency by market capitalization. According to JPMorgan analysts, the leading digital asset suffered a blow as BTC futures traded below the crypto asset’s actual price.
Ethereum Vs Bitcoin
Big investors have been progressively moving their attention away from Bitcoin and toward Ethereum. BTC futures on the Chicago Mercantile Exchange have traded below the actual price of the bellwether crypto currency, lowering expectations for the top digital asset.
According to JPMorgan, the trend appears to show that institutional investors are avoiding the Bitcoin futures market, indicating a setback for the leading cryptocurrency and a reflection of low demand.
Due to the high storage costs for Bitcoin, futures tend to trade at a premium to genuine Bitcoin in normal healthy demand. According to JPMorgan’s research, the yields offered for passive bitcoin investing also encourage futures prices to rise.
Bitcoin futures allow investors to bet on the future price of the bellwether digital asset and trade contracts based on that price. As investors increasingly flock to Ethereum, the recent downturn in futures is bad for Bitcoin. According to CME data, the 21-day average premium for ETH futures over spot Ether prices has risen to 1%. This occurrence, according to JPMorgan, demonstrated a significant disparity in demand.
Prices of Bitcoin is a big worry
As BTC continues to record lower lows, the bitcoin price has struggled to reach higher heights. Despite the fact that buyers stepped in following the latest loss to $39,611, the leading cryptocurrency has been hit by a top signal, indicating that further decline is possible.
On the 4-hour chart, the descending diagonal trend line has trapped bitcoin price in a slump. The Momentum Reversal Indicator (MRI) has printed a top signal, implying that BTC is at risk of another drop.
The 61.8 percent Fibonacci retracement level at $44,006 is the first line of resistance for Bitcoin price. BTC will find more support at $43,842, which is the 20-hour Simple Moving Average (SMA). At $41,906, where the MRI’s support line occurs, a further foothold may emerge.
If the price of Bitcoin rises due to increased purchasing pressure, the next resistance level is $45,815, where the 50 four-hour and 100 four-hour SMAs intersect. At $46,947, the declining diagonal trend line will be the next challenge for BTC. At the time of writing, the price of Bitcoin is $44,715.62 and the trading volume is recorded at $32.07.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.