Key facts:
Investors debate whether or not ether (ETH) is at a good entry point.
Overall, the next quarter is expected to be bullish for cryptocurrencies.
Ethereum’s cryptocurrency, ether (ETH), started the week with a rise in relation to bitcoin (BTC), after ending the last week with an appreciation as well. This raises expectations of a change in trend.
With ETH trading above 0.04 BTC again, analyst Michaël van de Poppe highlights who sees a shift in the market. “Altcoins are moving up substantially,” he warns. In his view, this will continue for the next 4 to 8 weeks.
This diagnosis comes in a week that has been key for the market, with the cut in interest rates in the United States. This monetary policy reduces the cost of loans, increases liquidity and lowers bond yields, which motivates demand in the markets.
Although the rate cut was 50 basis points, generating fears of a recession in the economy, in the long term this measure stimulates the economy. This may explain the upward reaction of cryptocurrencies with a smaller capitalization than bitcoin, such as ether.
“In general, when rates fall, investors tend to look for alternatives that offer higher returns, and cryptocurrencies, with their dynamism, attract a lot of interest in that regard,” commented, as reported by CriptoNoticias, Rodrigo Duran, communications director of the cryptoasset exchange, Cryptomkt.
Despite last week’s appreciation, ETH is on a bearish streak against BTC for over a year now, as seen below. This is despite both currencies appreciating against the US dollar (USD), albeit in significant contrast.
ETH is currently trading at $2,600, which is 45% below the all-time high which it marked three years ago in 2021. Meanwhile, BTC, which is trading at $63,000, is 13% away from the record it hit six months ago.
Ethereum ETFs continue to experience capital outflows
Van de Poppe, among other specialists, expected ether exchange-traded funds (ETFs) in the United States to motivate the market. However, since their debut two months ago, these instruments have have registered capital outflows. These come mainly from ETHE (Grayscale’s Ethereum ETF), a product that previously operated off-exchange.
With the start of the last week of autumn in the northern hemisphere, a season in which markets usually rise, the markets could become more active again. That is why, combined with the presidential elections in November, bullish expectations are increasing towards the last quarter and 2025.
In a scenario of increased risk appetite with the rate cut, ETH could benefit compared to BTC. In line with this, After a marked bullish trend of bitcoin, altcoins like ether tend to enter a phase of better returns such a currency. However, it is still too early to see this possibility in the short term.
While the macroeconomic environment shows potential for growth, the election result is key. According to Sebastián Serrano, CEO of the Ripio exchange, if Kamala Harris wins, it will be negative in the short term for the cryptocurrency market, but if Donald Trump wins, it will be positive, given that he identifies himself as “pro-crypto.”
Therefore, in this scenario, Bitcoin, ether and altcoin markets could remain on edge with greater certainty about economic and political development.
