Bitcoin’s Rising Demand Surpasses Ethereum Amid ETF and Halving Excitement
Over the past few weeks, Bitcoin has experienced increased demand, fueled by anticipation surrounding a potential Bitcoin ETF and the upcoming halving event. Meanwhile, Ethereum’s native token, Ether, is facing a 15-month low against Bitcoin, currently trading at $1,558 compared to Bitcoin’s $26,896. This marks the lowest point since Ethereum transitioned to proof-of-stake (PoS).
Ethereum’s struggle is evident in the ETH/BTC pair, which recently dipped to 0.056 BTC, breaking its 200-week exponential moving average (200-week EMA). Historically a crucial support for ETH/BTC bulls, this breach raises concerns for a potential downtrend in 2023. The next downside target could be near the 0.5 Fib line at 0.051 BTC, a 9.5% decrease from the current levels, if the 200-week EMA isn’t reclaimed.
Institutional capital flow data reflects Ethereum’s persistent weakness compared to Bitcoin. Bitcoin-specific investment funds attracted $246 million year-to-date as of October 6, while Ethereum funds faced outflows of $104 million in the same period. The buzz around a potential spot Bitcoin ETF approval in the U.S. and the upcoming Bitcoin halving on April 24, 2024, are contributing to Bitcoin’s dominance.
Analysts suggest that the launch of a spot Bitcoin ETF could attract a staggering $600 billion. Additionally, Bitcoin’s fourth halving will reduce miners’ block reward from 6.25 BTC to 3.125 BTC, historically creating a bullish case by cutting the new supply in half.
As Bitcoin gains momentum with these factors, Ethereum grapples with challenges, highlighting the shifting dynamics between the two leading cryptocurrencies.