October 22, 2021

Institutional Investors Focus on ETH Futures as BTC Demand Weakens

Briefly –

  • JPMorgan analysts stated that institutional investors are shifting their focus to Ethereum.
  • Bitcoin futures have seen weak demands as they traded under spot price.
  • ETH futures premium increased by 1%, indicating demand divergence from Bitcoin.

Institutional investors have shifted from the leading crypto, Bitcoin, to ETH since August. That is due to demand diverging to the dominant alternative token. On the same, JPMorgan analysts said that Bitcoin suffered setbacks as its future traded under the average crypto price.

ETH Gains Popularity as BTC Demand Decreases

Big investors appear to find altcoins promising, shifting their attention from Bitcoin to ETH since August started. The leading virtual currency saw its expectations fading as Bitcoin futures on crypto exchange Chicago Mercantile traded under the asset’s actual price.

JPMorgan believes that the trend indicated institutional investors shying off BTC futures. That is a setback for Bitcoin as it reflects weak demand. Generally, futures trade high than actual Bitcoin because of high BTC storage costs. JPMorgan’s research concluded that Yields for passive crypto investing also catalyzed futures prices to rise.

BTC futures allow traders to trade contracts linked to Bitcoin’s future price. The current weakness in futures translates to bearishness to the leading crypto. That is because investors have been flocking on the Ethereum network.

CME data shows that ETH futures 21-d average increased by 1% beyond spot ETH prices. JPMorgan stated that such developments indicate massive demand divergence.

Bitcoin Struggles to Gain Ground

BTC struggles to explore higher prices as it prints lower lows. For now, the cryptocurrency might see plunges, as highlighted by the top signal. That comes despite buying activities during the latest plummets to $39,611.

BTC has seen its price dominated by downswings controlled by the descending trend-line on the four-hour chart. Meanwhile, the Momentum Reversal Indicator has displayed a top gesture, indicating that Bitcoin might endure a plunge in the coming sessions.

Bitcoin has its initial resistance line at 61.8% FIB retracement at $44,006. Bitcoin will secure support around the 20 4hr SMA near $43,225. The asset might secure additional support at $41,906, given by the Momentum Relative Index.

If magnified buying pressure emerges to take Bitcoin prices higher, the following resistance will be $45,815. Keep in mind that the 100 4hr SMA and the 50 4hr SMA coincide at this level. The descending trend-line at $46,947 will be the next Bitcoin hurdle.