Cryptocurrency analyst, Saxo Bank Group
Last week saw the entire cryptocurrency market capitalisation fall 1.5% to $424 billion. Ethereum outperformed the market by rising 9% over the week. Interestingly, Bitcoin has risen 0.5% for the week after failing to stay above the critical $10,000 level on multiple exchanges.
This week the market is showing a divergence in the correlation of the top cryptocurrencies with the overall market. Bitcoin was testing critical levels on the upside and downside, while Ethereum was rising to previous yearly highs.
Ethereum could be under pressure
Block.One, one of the largest Ethereum holders, moved 209,000 ether to the Bitfinex exchange this week. The ether sent to Bitfinex only represents a fraction of Block.One’s total Ethereum holdings of over six million ether and represents 4% of the daily traded ether volume. However, Block.One’s ether stash could put continued pressure on Ethereum as Block.One needs to sell the ether to fund its platform development, which launches in June.
Block.One has acquired over 6% of the ether outstanding via its ICO for the EOS platform. Block.One could hold as much as 10% of the ether outstanding by the end of the ICO. The EOS platform is a smart contract platform similar to Ethereum. Block.One holding 6%+ of the Ethereum network (a competitor) could prove to be challenge for Ethereum.
US Federal Reserve says futures launch could be responsible for BTC price
The Fed released a report earlier this week citing the launch of the first exchange-traded Bitcoin futures as the reason for the 2017 bull market and the subsequent decline price in 2018. The report stated that the speculative demand for spot bitcoin led to an increase in price going into the launch of the Bitcoin futures. On the other hand, the launch of the futures lowered the demand for spot bitcoin and allowed for the shorting of the bitcoin market on a regulated exchange for the first time. The futures volume has been increasing since their launch in December.