How To Trade The Ethereum Rally: 10x Research

Zinger Key Points
  • Ethereum shows a 45% surge in futures open interest versus Bitcoin's 3%, indicating a strong market preference for ETH, say analysts.
  • Total value locked in DeFi increased by $17 billion in a week, reflecting positive sentiment beyond just Ethereum.
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In its recent newsletter, 10x Research pointed out ways to capitalize on the current Ethereum ETH/USD rally, offering insights into optimal strategies and market behaviors to watch.

What Happened: In its newsletter titled “Should Traders Embrace The Ethereum Rally?,” 10x Research notes the impact of understanding new narratives that can “override everything.”

For example, Bitcoin BTC/USD saw a 150% rally before its futures launch in December 2017 and an 80% increase prior to Coinbase's direct listing in April 2021. This pattern highlights the potential for the ongoing Ethereum rally, sparked by the narrative surrounding spot Ethereum ETFs.

The team around lead analyst Markus Thielen points out several key observations.

  1. ETH > BTC Trade:
    Bitcoin has seen a modest 3% increase in futures open interest, while Ethereum’s surged by 45%, indicating a strong preference for ETH over BTC as the catalyst of choice. “The trade might be ETH > BTC, as that is the catalyst,” 10x Research notes.
  2. Institutional Moves:
    The approval of spot Ethereum ETFs can lead to significant price movements. Even the anticipation has already caused Ethereum futures open interest to increase by $4 billion. As ETF issuers prepare for sufficient capital on launch day, the rally may continue, driving ETH prices higher.
  3. Sectorwide Impact:
    The surge in DeFi's total value locked, increasing by $17 billion in a week to $107 billion, is also notable. Lido LDO/USD and Ethena ENA/USD have seen marked increases in their TVL, implying broader bullish sentiment that extends beyond just Ethereum. Lido (LDO) rallied from $1.50 to $2.60 after the announcement of unstaked ETH ETF approval, with more potential upside left.

Read Also: Altcoins ‘Entering Textbook Markup' As Crypto Analyst Predicts Major Rally

Why It Matters: 10x Research’s central thesis is that traders should adopt bullish positions leading up to major events, as historical patterns suggest substantial price appreciations during these periods. “For traders like us, it's essential to quickly throw out the old playbook and adjust to the new reality,” the research firm said.

Ethereum is up 25% over the last seven days compared to Bitcoin’s more muted 3% increase over the same time frame. Cryptocurrency traders have pointed out that Ethereum-related tokens like Ondo Finance ONDO/USD will benefit from the launch of spot exchange-traded funds. ONDO is up over 30% over the last seven days. Ethereum-based meme coins, such as Pepe PEPE/USD, up 75% over the last seven days, have also benefited.

Price Action: At the time of writing, Ethereum is trading around $3,930, up 2% over the last 24 hours.

What's Next: The impact of Ethereum as an institutional asset is expected to be thoroughly explored at Benzinga's upcoming Future of Digital Assets event on Nov. 19.

Read Next: This Dog Coin Is Up 53% And ‘Still In Ripper Mode’… But It’s Not Dogecoin

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image: Shutterstock.

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