Ethereum’s token, ETH (ETH), is up more than 15% in the first 12 days of October. However, compared to a 30% increase in Bitcoin (BTC) in the same period, the second largest cryptocurrency is currently in a downtrend in terms of price in BTC.
So far, in October (and in the fourth quarter of 2021), the ETH/BTC exchange rate fell by more than 12% and reached 0.060215 BTC on October 12 for the first time in more than two months.
ETH/BTC daily price chart. Source: TradingView
The decline also pushed ETH/BTC below one of its oldest support areas, the 200-day exponential moving average (the 200-day moving average; the orange wave), as shown in the chart above. This increases the risk of further falls, as the next potential target will be 0.055304 BTC.
Bitcoin dominance raises ETF hopes
Another evidence of ETH/BTC weakness is Bitcoin’s growing dominance in the cryptocurrency market.
Specifically, the Bitcoin Dominance Index, which measures the capitalization of the major cryptocurrency compared to the rest of the cryptocurrency market, increased from 42.39% on October 1 to 46.64% on October 12. On the other hand, Ether’s dominance declined from 18.15% to 17.57% in the same period.
Bitcoin dominance daily chart. Source: TradingView
This shows that before October, more capital was withdrawn into the bitcoin market than altcoins.
Related Topic: Institutional Crypto Products Tracking Managed Assets When Investors Invest in Bitcoin
The rising dominance of bitcoin has coincided with expectations that the US Securities and Exchange Commission could approve four bitcoin-based exchange-traded funds (ETFs) within a few weeks. The competitors are Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust, and Kryptoin Bitcoin ETF.
SEC President Gary Gensler hinted at an optimistic outcome for Bitcoin ETFs, despite the Securities and Exchange Commission (SEC) rejecting similar requests for eight consecutive years. Gensler noted that this time around, Bitcoin ETF researchers have filed under the Investment Firms Act of 1940, which provides greater protection for investors.
Earlier this week, two lightweight Bitcoin ETFs began trading in the US: the Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Trade Fund ETF (BLKC). However, the funds invest 80% of their assets in crypto-related companies, not Bitcoin itself.
15-minute SATO ETF price chart. Source: TradingView
The Securities and Exchange Commission has also approved the creation of a third cryptocurrency ETF. The fund is called the Volt Crypto Industry Revolution and Tech ETF (BTCR), and it will have “access to organizations that hold most of their net worth in bitcoin or derive most of their income from bitcoin mining, lending or transactions.”
Is Bitcoin going crazy?
James Seifarth, ETF analyst at Bloomberg Intelligence, said the news would be “very optimistic” for Bitcoin. Similarly, independent market analyst Lark Davis also predicts a “crazy” market reaction if the Securities and Exchange Commission approves a Bitcoin ETF with access to actual BTC.
As such, speculation about the approval of a Bitcoin ETF appears to have fueled traders’ appetites for the leading cryptocurrency in recent days, with BTC overtaking its major competitors, including Ether.
However, Ethereum has a strong decentralized application ecosystem and remains a major force behind the fast-growing decentralized financial and non-financial token sector.
David Gokhstein, founder of Gokhshtein Media and PAC Global, indicated that the impact of the Ethereum health network could push the cost of Ether to $10,000 by the end of this year. Meanwhile, Cointelegraph wrote, the ongoing supply crunch in the broadcast market should continue to be a major topic of conversation with future bulls.