In November, institutional interest in Ethereum [ETH] more than doubled, with CME futures open interest (OI) reaching a historic high of 662,600 ETH (approximately $2.5 billion).
In fact, according to data from K33 Research, this indicates that the amount of ETH sharply rose from 350,950 on November 4 (the eve of the US presidential election).
ETH approaches BTC
On November 25, CME ETH futures trading volume further increased. The annualized basis for ETH (the premium obtained when hedge funds buy the US spot ETH ETF and short ETH futures) also rose slightly. Coinbase research analyst David Han noted that this trend has outpaced BTC's movement since the US elections.
"CME ETH basis has lagged behind BTC over the past few months, but has recently now surpassed BTC."
While increased interest from institutional investors may have a net positive effect on ETH's price, the hedging strategies adopted by hedge funds could expose the asset to sharp price volatility accelerated by liquidations.
That said, the upward momentum of ETH relative to BTC is also reflected in the ETHBTC ratio, which similarly tracks the relative performance of altcoins against BTC.
Indeed, ETH has attracted more capital over the past seven days, evidenced by the nearly 15% rise in the ETHBTC ratio.
This means that ETH has outperformed BTC over the past few days, especially during BTC's recent plunge.
However, this trend can only continue if the ETHBTC ratio decisively rises above the 50-day SMA (Simple Moving Average).
We saw a false breakout at the beginning of November, which led to poor performance for ETH afterward. Will this time be different? Will the ETHBTC ratio approach the 50-day average?
As of the time of writing, ETH's value is $34,000, having increased by 4% in the past 24 hours, with short-term targets of $3,500 and $3,600.
