After the Bitcoin ETF approval, the cryptocurrency market has witnessed a flurry of activity and speculation. Glassnode’s latest Week On-chain report delves into the evolving dynamics, exploring the market’s risk appetite for tokens beyond conventional options. Notably, Solana, scaling tokens, and various sector indexes have come under scrutiny as indicators of risk appetite in a post-ETF landscape.
Ethereum (ETH) and Altcoins have emerged as strong performers after the Bitcoin ETF approval, experiencing a robust rally. For the first time since October 2022, ETH outperformed Bitcoin, signaling a potential shift in capital flows. While Bitcoin maintains dominance in open interest and trade volumes, ETH has shown resilience and regained ground following the ETF approvals.
The report delves into the relative performance of Solana, scaling tokens, and sector indexes concerning BTC and ETH. The digital asset markets experienced heightened speculation leading up to the ETF approvals, resulting in a sell-the-news event and an 18% drop in Bitcoin prices to $39.5k.
Looking ahead, investors are pondering the next move. Will there be speculation on an Ethereum ETF approval? Will Solana continue to outshine ETH and BTC? Or is there a growing appetite for risk and smaller market cap tokens?
The market performance since mid-October has been noteworthy. Bitcoin’s market cap increased by 68.8%, and the aggregate Altcoin Market Cap mirrored this rise at 68.9%. However, Ethereum exhibited more sluggish momentum, underperforming the broader altcoin space by 17%.
Post-ETF speculation has sparked interest in potential ETH ETF approval, driving over 20% in ETH prices relative to BTC. Positive market sentiment is further supported by a surge in net profits locked by ETH investors, reaching a multi-year high. The Net Unrealized Profit/Loss for short-term token holders has also crossed above 0.25, indicating a shift in sentiment.
Derivatives Focus on Solana and ETH
Examining Ethereum’s derivative markets reveals a significant uptick in trade volume for futures and options contracts. While ETH markets surpassed the average volume of 2023, the funding rate premium for ETH futures suggests a higher risk premium than Bitcoin.
In the broader context, the report assesses the competition between ETH and other layer 1 blockchain tokens, with Solana standing out for its remarkable price performance in 2023. Altcoins, particularly those related to Ethereum scaling solutions and Staking/GameFi tokens, have witnessed varying performance levels.
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