Bitcoin and Ethereum May Not Be Traveling the Same Path: But How?

• Blofin, a report exploring the changing narrative of the crypto market, focused on the diverging relationship between Bitcoin (BTC) and Ethereum (ETH).
• The report highlights the emergence of a new Crypto 3.0 narrative, combining macro trading, artificial intelligence (AI), and other factors.
• The report also emphasizes the importance of ETH not being a fully suitable asset due to not being recognized as a security by the U.S. Securities and Exchange Commission (SEC).

Bitcoin and Ethereum are the two most well-known and valuable cryptocurrencies in the crypto world; based on these factors, the friendship between the two can diverge.

Divergence Between Bitcoin and Ethereum

Digital asset management platform Blofin published a report exploring the changing narrative of the crypto market, with a focus on the diverging relationship between Bitcoin (BTC) and Ethereum (ETH). The report suggests that BTC has become an increasingly prominent macro foundational asset, approaching the status of traditional assets such as foreign exchange rates and precious metals, while ETH’s narrative has shifted to focus on mega stocks.

According to the report, ETH’s appeal in terms of liquidity may continue to be weaker compared to BTC’s liquidity, especially during the current “liquidity shortage” period, unless it has a broad narrative and widespread use.

The report also highlights the emergence of a new Crypto 3.0 narrative, combining macro trading, artificial intelligence (AI), and other factors. It suggests that BTC’s macro features are constantly reinforced by current and external liquidity preferences, and the Bitcoin network has become a natural macro foundational asset.

The report also emphasizes the importance of ETH not being a fully suitable asset due to not being recognized as a security by the U.S. Securities and Exchange Commission (SEC). This uncertainty implies that ETH carries risks, while BTC is recognized as a commodity. Since institutions are less inclined to take risks in terms of compliance, BTC becomes the preferred option for many investors.

Finally, the report considers three scenarios for BTC’s future price, which vary depending on changes in interest rates and market expectations. The most optimistic scenario envisions a market value of $960 billion, a unit price surpassing $49,400, and BTC’s market share increasing to 60% with the approval of the spot Bitcoin exchange-traded fund (ETF).

However, if investors have less optimistic expectations and the crypto market value remains limited, BTC’s market value will fluctuate between $600 billion and $700 billion, with prices ranging from $30,880 to $36,026.

Bitcoin: Pay Attention Until It Stays Above $32,000

Capriole Invest, a leading provider of Bitcoin and cryptocurrency investment strategies, has released its latest Bitcoin Macro Index report. The report provides a comprehensive and data-driven analysis of the current state of the crypto market, combining over 40 strong on-chain, macro market, and stock indicators into a single machine learning model.

According to the report, despite recent positive news surrounding Bitcoin, it is facing significant resistance at the $32,000 level. News such as the Blackrock ETF announcement, XRP’s legal victory, and proposals to back the U.S. Dollar with Bitcoin have not been strong enough to sustain momentum above $31,000.

The report suggests that being cautious in the upper range is appropriate until price levels above $32,000 are successfully maintained. In high-timeframe technicals, Bitcoin has not surpassed the weekly resistance level of $32,000, indicating there is a larger opportunity area for a breakout above $32,000 or a return to the mid-$20,000 range.

The report notes that there may be trading opportunities in low timeframe range dips, but concludes that there is currently no risk-return opportunity for high-confidence investments.