A ratio that shows the price difference between the biggest digital asset, Bitcoin, and the second-ranked asset, Ether, suggests that investors’ appetite for risk may be declining.
The ratio scaled 20 this week and reached the highest level since April 2021, reflecting more resilient demand for the oldest cryptocurrency rather than the smaller rival.
According to a report published on Friday by the cryptocurrency asset trading company QCP Capital, if traders view ETH as a proxy for sentiment toward smaller tokens this pattern may be “a very early signal” of FOMO, or fear of missing out, turning into “fear.”
In mid-March, Bitcoin hit a record high of $73,798 amid a wave of capital inflows into US exchange-traded funds that were specifically designed for this purpose and had launched in January. With the cooling of ETF demand, the coin has now fallen by roughly 9%. During the same period, a measure of smaller digital assets fell even further, losing about 20%.
Beyond the cryptocurrency sector, strategists at Stifel Nicolaus & Co., including Barry Bannister, said in a report this week that a possible top for Bitcoin as investors lose interest in cryptocurrencies “signals a weaker stock market.”
Cryptocurrency traders are currently anticipating the four-year event known as the Bitcoin halving, which lowers the token’s new supply. There are questions about whether the halving will live up to the hype that it is a bullish development.
At 8:10 a.m. on Friday in London, Bitcoin had dropped 1.5% to $66,940, while Ether had dropped by a similar amount to $3,278. The majority of other notable tokens saw declines as well.
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