K33 Research Predicts Ethereum Will Gain Ground Against Bitcoin in July
K33 Research, a cryptocurrency research firm, has made a bold prediction regarding the price balance between Bitcoin and Ethereum. According to their report, Ethereum is set to make a strong comeback against Bitcoin this month, after consistently underperforming since the start of the year.
The catalyst for this turnaround is expected to be the launch of Ethereum’s first US-listed ETF in July. This is anticipated to generate a surge in institutional demand for ETH, with K33 Research estimating that the ETFs will absorb between 0.75% to 1% of all circulating ETH within the first five months of their introduction.
Despite the potential for a temporary dip in prices following the ETF launch, similar to what was witnessed with Bitcoin ETFs in January, K33 Research believes that Ethereum’s “favorable supply dynamics” will provide it with “relative strength” in the coming months.
Vetle Lunde, senior analyst at K33 Research, commented, “ETFs are a solid catalyst for relative ETH strength as the summer progresses and flows accumulate. I definitely see current ETH/BTC prices as an advantage for patient traders.”
On the other hand, Bitcoin holders are likely to face a downside risk due to the anticipated distribution of 141,686 BTC ($8.8 billion) from the defunct Bitcoin exchange, Mt. Gox. Analysts have warned that this long-awaited event could lead to significant selling pressure on Bitcoin.
K33 Research’s recent market update forecasts “clear selling pressure on Bitcoin in a dry summer market, with the chop suey range widening as the leaves turn orange until better days emerge.”
The launch of the new Ethereum ETF has also caused CME ETH open interest to reach an all-time high, currently at 372,000 ETH ($1.26 billion). This surge in demand indicates a strong intention to make directional transactions around ETH before the ETFs go live, although the direction of these transactions remains uncertain.
The report also notes, “Soft funding rates indicate balanced expectations, with neither bullish nor bearish positions predominating, highlighting the uncertain market outlook and lack of consensus as ETH ETF launches approach.”
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