BTC and ETH are starting to diverge in a way that signals a rotation.
I've been following the financial markets for about 10 years now, just recently starting to do technical analysis on crypto.
Rotation is the term used in investing when you see large investments being moved from one sector to another.
In traditional financial markets, this could be from equities --> bonds, or retail --> utilities. Anything really. Here's how it looks in chart form:
https://realinvestmentadvice.com/technically-speaking-the-stealth-rotation/
In my opinion, this is what we are currently seeing happen from BTC to ETH.
You can see the diverging correlation between BTC and ETH in this chart:
BTC and ETH had been moving largely in tandem until this afternoon.
Another key is the volume (red arrows). "Volume confirms price" is very relevant here.
SENTIMENT
I think what's driving this is a shift in sentiment. I view this as a bit of an outsider. I've been following bitcoin for about 5 years, but I was always biding my time, just buying a few, waiting to see what would happen. Earlier this year, I started to sense this shift generally.
As new investors are coming into the crypto markets in record numbers, they aren't really going to care about the history of bitcoin and what it means to the community.
I think they are going to see the uncertainty around BTC leading up to August 1st and hop onto the newer, faster blockchain with more current hype and stronger corporate support (whether you or I like that or not).
It's similar to VHS vs Betamax. The market sometimes just decides for reasons we've never thought about.
The trend is towards parity.
I'd love to get some feedback. These are just a few data points, and I'm no expert, but this is what my gut is telling me after years of watching similar setups in other markets.
I think this is a fantastic post and I really appreciate the video on Betamax vs VHS. The parallels are eerily similar to BTC vs ETH. Im surprised this post does not more upvotes. Good work. Upvoted and followed.
Thanks! I think I'm going to start doing some more market analysis posts like these as I get deeper into crypto.
I'm looking forward to it. Thanks!
The parallels are incredible. So if Betamax=BTC and VHS=ETH, then what's the next Laserdisc/minidisc/mp3? :)
Exactly Sony walkman vs Apple Ipod
Interesting point of view. I got my first ETH mining contract this morning. I saw the huge amount of business and corporate interest in ETH and thought, WOW! "This could be something big" Here is the article that sparked my interest: https://www.wealthdaily.com/articles/ethereum-is-about-to-boom/8674 Check out the list of companies and financial institutions listed on that page!
Yes, that sort of support is really amazing.
I'm not sure if the corporate involvement is ultimately good or bad from the point of view of us "crypto enthusiasts", but it seems obvious what it means for the price of ETH with all the new, big money coming into the market.
I like @sgtreport's possible reason. The banks have all these fiat dollars sitting around and being repatriated into the country and they need to find a place to put them to avoid further inflation. CRYPTO! But then the question is, if all this worthless Fiat is going into places like Bitcoin or ETH, what does that make them? Worthless and just another FIAT ready for a bubble bust? And could they be doing this in order to destroy crypto which is becoming a competitor to the US dollar? All valid questions IMHO. However, the short term result is a boom in crypto for at least a while. I like and own crypto...but I stack silver. :)
Haha, yep, I'm with you. Crypto will always be #2 to physical for me too.
Those are some interesting questions. I agree that if crypto reaches a certain market threshold we will see the banks/corps push for legislation to limit the legality of certain crypto transactions. Or just force everyone to use their private blockchain tokens.
They definitely won't be giving up market share quietly!
Excelent.. Love the video
i really like the beta/vhs comparison analogy but in that analogy wouldn't Bitcoin be the VHS?