Bitcoin ETF Approval and Price Drop
After the approval of 11 Bitcoin ETFs, the price of Bitcoin has dropped by almost 20%. This drop is surprising considering that the market sees the ETF approval as a positive move for Bitcoin and crypto. One possible reason for this drop is the significant selling activity by Grayscale, which sold over $500 million worth of Bitcoin in just two days. The selling pressure from Grayscale is more than the new BTC created each day, causing some selling pressure in the market.
BTC & ETH Market Cap Dominance
Bitcoin dominance has been growing despite the recent price correction. Since November 2022, Bitcoin’s dominance has increased by almost 11%, while Ethereum’s dominance has remained relatively stable. This means that Bitcoin’s gain is at the expense of altcoins’ loss. Additionally, there has been a decline in stablecoin market value, which is common in bull markets as people invest in projects they like.
Improving Sentiment for ETH
Following the ETF approval, sentiment for Ethereum (ETH) is improving. The Net Realized Profit for sellers has been on the increase since October and reached a 1-year high after the ETF approval. Short-term holders’ net unrealized profits have also reached their highest point since November 2021, indicating improving conditions for all ETH holders. Open Interest suggests that people are willing to speculate more on ETH than on Bitcoin, possibly due to a better risk/return ratio.
ETH or Alts Post ETF
Solana is an outlier that has outperformed both BTC and ETH recently. However, most other altcoins have lost ground to Bitcoin since September, despite some sectors performing better than Bitcoin in the first three quarters of 2023. Currently, ETH is outperforming other altcoins and looks like a big winner post-ETF. It’s important to be selective with altcoins and focus on quality projects for long-term success.
Hot Take: Selective Investing and Focus on Quality
With the approval of Bitcoin ETFs, the market is experiencing price fluctuations. While Bitcoin’s dominance is increasing, the performance of altcoins varies. It is crucial to be selective in investing and focus on high-quality projects for long-term success. Keep an eye on ETH, which is showing improving sentiment, and consider buying more if prices come down. Additionally, stay updated with market reports like Glassnode’s Market Sentiment report to make informed investment decisions.
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