Ether (ETH) had a strong start to the year but saw a decline in mid-March. However, it has gained momentum in mid-May due to the anticipation of the approval of spot Ether exchange-traded funds (ETFs) in the US.
Despite trailing behind Bitcoin (BTC) since the beginning of the year, ETH has outperformed BTC since the official approval of spot Ether ETFs by the Securities and Exchange Commission on May 23. In the period since May 15, ETH has surged approximately 30%, while BTC has gained only 9% in their respective US dollar pairs.
There are three main reasons why ETH has been outperforming BTC recently. Firstly, there has been a growth in network activity, contributing to its performance. Secondly, there is increased excitement surrounding the launch of spot Ether ETFs. Lastly, the ETH/BTC ratio has shown a bullish divergence from the relative strength index, indicating a potential trend reversal.
From a technical perspective, the ETH/BTC weekly chart has shown a bullish trend, with the ratio reaching a two-week high on May 23. According to trader and founder of MN Trading, Michaël van de Poppe, as long as the ratio remains above 0.051, it is considered bullish.
Analysts have also expressed optimism about the future of ETH. Pseudonymous analyst Plazma believes that ETH is undervalued and predicts that the ETH/BTC ratio will reach 0.1 within a few months. They also suggest that 10 ETH will be equal to 1 BTC.
In addition to the positive market trends, the potential launch of Ether ETFs is contributing to ETH’s bullish momentum. Bloomberg senior ETF analyst Eric Balchunas believes that these investment products have a good chance of launching by late June. BlackRock recently updated its S-1 form for its iShares Ethereum Trust (ETHA) with the SEC, indicating progress towards launch.
Market participants are optimistic about the impact of spot Ether ETFs on ETH’s price. Some speculate that Wall Street will use it as a bet on the growth of Web3, while others believe that ETH’s price could reach $10,000 as institutional capital is rotated into Ether ETFs.
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