The current state of the cryptocurrency market: strong fundamentals and technical pressure

Can ethereum continue to outperform bitcoin?

As of this writing, bitcoin is trading at around $37,000, down more than 40% from a high of $64,900, and the Fear and Greed Index has fallen to its lowest level since March 2020.

Despite the setback in market confidence, the fundamentals of the cryptocurrency market remain strong. Most recently, global investment firm Guggenheim has sought new funds for bitcoin exposure from the U.S. Securities and Exchange Commission.

Billionaire investor Stanley Druckenmiller also reiterated his bullish stance on Bitcoin, which he believes has won the race to store value, has been around for 13-14 years, and has limited supply.

The current state of the cryptocurrency market: strong fundamentals and technical pressure

It is also worth noting that Ether has been performing much stronger than Bitcoin since May, with the ETH/BTC pair up over 50% in a single month. Reports from JPMorgan and Goldman Sachs also expressed positive views on Ether.

Strong ethereum fundamentals

In fact, Ether has surpassed Bitcoin in terms of miner revenue and network transaction value. Goldman Sachs even said in its report that Ether is likely to overtake Bitcoin as the primary means of storing value due to the growth of the DeFi and NFT ecosystems built on Ether.

The current state of the cryptocurrency market: strong fundamentals and technical pressure

(Chart) Bitcoin and Ether miners’ revenue

In May, the average daily revenue of ethereum miners reached $76 million, far exceeding the $45 million of bitcoin miners (including block rewards and transfer fees).

A similar phenomenon exists for the amount of on-chain transactions and transfers for Bitcoin and Ether. According to this metric, Ether shows a significant advantage.

The current state of the cryptocurrency market: strong fundamentals and technical pressure

(Chart) Average Daily Transfer Amount on Bitcoin and Ether Chains

As the chart above shows, the average daily settlement on the Ethernet network amounts to $25 billion, 85% higher than Bitcoin. Stablecoin on the ethereum chain plays an important role, but the $50 billion net worth locked in the DeFi app is also critical.

| Slightly bearish futures premium

While fundamentals remain strong, both bitcoin and ethereum show slight bearish signs from a futures contract premium perspective. The futures contract premium refers to the difference between long-term futures contracts and current spot market levels.

30-day futures contracts typically carry a 10%-20% premium to regular spot prices to justify the fact that funds are locked in and not immediately cashed out.

The current state of the cryptocurrency market: strong fundamentals and technical pressure

(Chart) Annualized Bitcoin and Ether Futures Premiums on OKEx

As the chart above shows, futures premiums have been below 10% since the bitcoin and ethereum crash on May 19. This indicates slightly bearish market sentiment.

Ether Options Indicator Bearish

The “25% deltaskew” options indicator can be used to assess ethereum trader sentiment. A positive indicator means that the cost of a put (sell) option is higher than the price of a similar call (buy) option, which indicates bearish sentiment. Conversely, a negative value of the indicator indicates bullishness.

The current state of the cryptocurrency market: strong fundamentals and technical pressure

Since May 19, the “25% delta skew” indicator has remained above 10%. This indicates that market makers and giant whales are not willing to provide downside protection for prices and the market is in a state of “fear”.

The lack of bullish confidence in the derivatives market is one of the biggest problems at the moment. Of course, from another perspective, the market sentiment may only be a superficial phenomenon, but it will help to clean out the short term floating chips that are not determined, and create more space for the subsequent rise.

Ether EIP-1559 is expected to be implemented in July, and the proposal will create base fees that fluctuate based on network demand, and the base fees will also be destroyed, thus creating a potentially deflationary model for the Ether ecosystem, which could greatly increase the attractiveness of Ether to global investors (especially institutions).

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-current-state-of-the-cryptocurrency-market-strong-fundamentals-and-technical-pressure/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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