It’s a mixed bag of price action in the crypto market as the fallout from yesterday’s fake spot Bitcoin (BTC) ETF approval from the Securities and Exchange Commission’s X account continues to ripple through the ecosystem while many are still expecting a real approval as soon as this afternoon.
Data provided by TradingView shows that the resulting fallout has dropped Bitcoin back to support near $45,500, which acted as resistance as recently as last week, and represents a level bulls need to hold to prevent further declines.
BTC/USD Chart by TradingView
While Bitcoin struggles to find its footing, Ether (ETH) is firing on all cylinders, hitting a high of $2,460 in trading on Wednesday, its highest price since May 11, 2022.
ETH/USD Chart by TradingView
The strength in Ether as Bitcoin trades sideways has prompted many analysts, including MN Trading founder Michaël van de Poppe, to suggest that a rotation out of Bitcoin and into altcoins like ETH may be underway.
Very strong bounce from $ETH, which has been showing strength.
Additionally, a weekly bullish divergence might start.
If that's confirmed after this weekly close -> rotation is happening. pic.twitter.com/7po517AkNH— Michaël van de Poppe (@CryptoMichNL) January 10, 2024
According to the latest research on crypto exchange-traded products (ETPs) from digital asset and fintech investment business Fineqia, interest in Ether has been rising since the beginning of December, and may soon accelerate.
In December, “Ethereum rose 11.5% in value to $2,277 from $2,042 recorded at the end of November,” Fineqia said in a note shared with Kitco Crypto. “ETH-denominated ETPs AUM grew faster, however, at 14.2% to $9.4 billion from $8.3 billion.”
“During Q4, the AUM grew 40.8% from $6.7 billion registered at the end Q3. That similarly exceeded the price increase of ETH itself, which rose 35.9% from $1,675, highlighting net inflows during the quarter,” they said. “Over the course of 2023 however, ETH price rose 90%, while ETPs holding ETH increased 91%. The near proportionate increase suggested neutral capital flows for ETH-denominated ETPs during the year.”
Altcoins also saw an upswing in interest towards the end of the year, further making the case for a rotation out of Bitcoin following its 190% increase since the beginning of 2023.
“ETPs representing a diversified basket of cryptocurrencies increased 23.9% in AUM during December, marking a 138% increase over the course of 202,” Finequia said. “The primary surge occurred in Q4, registering an 80% AUM upswing to $2.25 billion, from $1.25 billion recorded at the end of Q3.”
“During 2023, ETPs holding individual altcoins showed a 165% increase in AUM, to $2.23 billion from $842 million,” they added. “The fourth quarter was the main period of this growth, with a 142% AUM increase from the $923 million recorded at the end of Q3. They rose 48.9% during the month of December.”
Multiple analysts have also suggested that, with the spot BTC ETF approval looking all but assured, forward-thinking traders have now started to prepare for months of headlines leading up to the approval of a spot Ether ETF by purchasing Ether on the open market.
$ETH has been slowly making its moves in the past three months.
Once the $BTC ETF is approved, all the eyeballs are going to shift to ETH.
Not to mention all the money that will be flowing from Bitcoin in a potential sell-the-news event.
Start stacking ETH. pic.twitter.com/0yiPvwGoOa— Lark Davis (@TheCryptoLark) January 10, 2024
