Analysts have named three factors that affect the price of bitcoin (BTC) and Ethereum (ETH)
Date: 2023-07-30 Author: Karina Ziganova Categories: BLOCKCHAIN
CME Group analysts figured out how the dynamics of the dollar and the stock market affect the rate of bitcoin (BTC) and Ethereum (ETH), and also predicted what would happen to the ETHBTC cross rate before the bitcoin halving.
The CME Group report showed that the ETHBTC trading pair is strongly influenced by various factors, including the performance of technology stocks, the strength of the US dollar, and the change in the market supply of bitcoin.
How does ETHBTC depend on external factors?
The study states that ETH is more vulnerable to fluctuations in the US dollar, and the ETHBTC pair is more affected by changes in the supply of BTC than ETH. At the same time, ETH often rises against BTC on days when technology stocks rise in price.
"ETHBTC shows almost zero correlation with changes in interest rates, gold futures and crude oil. However, he reacts vividly to what is happening with technology stocks and the US dollar, "said CME senior economist Eric Norland.
The expert noted that the supply of ETH increases after the price rises. This means that price dynamics stimulate supply, not the other way around.
Is it worth waiting for changes in the rate of BTC and ETH?
Norland believes that there are several factors that can affect the ETHBTC trading pair.
ETHBTC will repeat the price dynamics of bitcoin. This is due to the fact that ETH is highly correlated with BTC, but it is more volatile than Bitcoin
The growth in demand for BTC against the backdrop of geopolitical factors will also strengthen ETH.
ETH will strengthen ahead of the Bitcoin halving in 2024, provided that the BTC rate rises
"Finally, if BTC rises ahead of its upcoming halving in April 2024, as it did before previous halvings, it could also contribute to a further increase in ETH prices in relative terms," the study notes.
However, the analyst noted that the growth in demand for crypto assets, which was very strong during the first eight years of Bitcoin's existence, has slowed markedly over the past five years. Therefore, there is no guarantee that halving will lead to an increase in the price of bitcoin and ETH.
