In the last 7 days, the price of Bitcoin has risen by 4.61% while Ethereum has seen a limited increase of 0.34%, in a context where macro analysis highlights strong uncertainty for the short-term future of the markets.
Investors seem to prefer less risky assets than crypto at this moment, such as bonds or stocks, in the wake of fears of a U.S. recession
Despite this, the future prospects of FED cuts and the ample liquidity availability of large tech companies suggest possible rallies ahead.
Let’s analyze the situation below by taking a look at the derived data and the price trends for Bitcoin and Ethereum.
Economic uncertainty in the USA: contrasting trends for Bitcoin
Uncertainty seems to be the term that best describes the current macroeconomic analysis situation of the markets, while the price of stocks, Bitcoin, and Ethereum moves independently for each type of asset.
Currently, macro indicators suggest that operators are increasingly moving away from cash positions, reflecting a marked interest in low-risk instruments. Despite the decline in yields of US Treasury securities, the demand for traditionally safe products has not waned and investors are confident about the next move by the FED.
In the meantime the S&P 500 marks a growth of 9.5% in the last 3 weeks, recovering the recent market dump and returning to a distance of about 1% from the all-time high.
Bitcoin and Ethereum are instead moving under strongly contrasting trends. Overall, the graphical analysis suggests a phase of accumulation and ranging, while fears of a recession in the USA highlight the fragility of crypto assets.
The two digital currencies are suspended in limbo, with stocks offering greater gains and bonds that are more appealing and secure.
Source: https://it.tradingview.com/chart/1hwwyywT/?symbol=SP%3ASPX
Especially for Bitcoin, it appears difficult to get an idea of possible short-term price movements, with the US calendar marking very important events on the horizon.
On September 18, one of the most important FED meetings of the year is expected, where a rate cut of at least 50 basis points is anticipated.
Furthermore, it should be noted how the large position in liquidity of US tech companies could act as fuel for the cryptocurrency if they return to making purchases in the speculative markets.
We remind in this regard that Berkshire Hathaway of billionaire Warren Buffet holds a record of cash positions amounting to 277 billion dollars.
This is incredible:
Warren Buffett's Berkshire Hathaway’s cash position relative to total assets spiked to 25.0% in Q2 2024, the most in at least 24 years.
The company's share of cash has more than DOUBLED in just 2 years.
To put this into perspective, the company’s cash pile… pic.twitter.com/LgMklJ5HcQ
— The Kobeissi Letter (@KobeissiLetter) August 14, 2024
In the financial markets, the terms “bull” and “bear” are used to describe the general trend of the market. A “bull” market is characterized by rising prices, while a “bear” market is characterized by falling prices. Investors often try to predict whether the market will be “bull” or “bear” in order to make informed investment decisions.
In the meantime, the US dollar index (DXY) plummets to its lowest level since December 2023, without triggering any push on the price of Bitcoin.
Usually, the weakness of the dollar is correlated with a growth in cryptocurrency, precisely because the peculiarity of Bitcoin lies in its independent payment capabilities to the detriment of the traditional fiat alternative.
In any case, recently the inverse correlation between the two assets has been gradually weakening, further complicating the picture.
Source: https://it.tradingview.com/chart/1hwwyywT/?symbol=SP%3ASPX
A look at the derivative markets for Bitcoin and Ethereum
Even the analysis of the derived data for Bitcoin and Ethereum do not offer price cues to rely on, and indeed, contribute to raising uncertainty in the short term.
Currently, in fact, the prices of BTC and ETH futures are traded with an annualized premium lower than the typical quotations of these instruments.
Usually, monthly futures should be traded with a positive difference compared to the spot exchanges between 5% and 10%.
However, in a neutral territory like this, the price imbalance has dropped drastically below 6%, the lowest level since 2023, highlighting a weak interest for leveraged buyers. This is in stark contrast to the end of July, when the premium exceeded 10% as the price of Bitcoin rose above 68,000 dollars.
At the same time, the funding rate and open interest of Bitcoin and Ethereum futures remain in positive territory for price trends.
The financing rates are positive while the sum of open contracts remains close to one of the highest levels of 2024. Thus reflecting a solid base of trading.
As for the options market, the imbalance of call and put contracts is in favor of an imminent rise for both assets.
The BTC options and ETH on Deribit, expiring around the US presidential elections; reflect the optimism of investors.
The most watched price targets by calls are respectively 80,000 dollars for Bitcoin and 4,000 dollars for Ethereum.
In particular on Ethereum, the bullish sentiment appears more pronounced with a total of call contracts amounting to 29,779 compared to the total of put at 11,321.
The max pain price is set at 3,000 dollars while the most favorable price on November 8, 2024, seems to be that of 4,000 dollars
Source:https://www.deribit.com/statistics/ETH/metrics/options
Analysis of the price of crypto BTC and ETH
After introducing the general macroeconomic framework and delving into the situation of derivatives, let’s now focus on the price analysis for Bitcoin and Ethereum.
As mentioned, Bitcoin seems to be moving slightly better in recent days compared to the second coin by market capitalization.
After the last crash in late July/early August, BTC has recovered more quickly part of the lost ground, bringing itself back to +25% from the bearish spike.
The prices are still dominated by the EMA 50 on the daily time frame, while the macro range 55,000-70,000 holds the majority of crypto traders in its grip.
Before being able to make a future forecast, it would be appropriate to see the chart break one of the two extremes. Potentially not before September and with accompanying volumes.
The trend of Bitcoin close to the presidential elections could determine the market direction in the last quarter of the year.
We expect a lot of volatility and numerous attempts at manipulation with fake movements and large liquidations.
For Ethereum, the price analysis is similar to that of Bitcoin but with an accentuation of the bear condition. Here too, the most favorable scenario is that of ranging between 2,300 and 4,000 dollars. In particular, with the crypto struggling to approach the average of these two values.
The prices remain compressed below the EMA 50 daily, but with greater pressure from the bears.
Before hypothesizing any movement for the coming months, we must observe a break of the two extremes. Thus breaking the monotony that has conditioned the crypto markets in recent months.
It is worth noting that it has been almost 2 years that Ethereum underperforms Bitcoin in terms of performance. Probably in the coming months, we will see a reversal of this situation, in line with the cyclicality of the relationship between the two crypto assets.
Attention therefore to the next moves of ETH because they could surprise even the most experienced traders in the market.
