Are Cryptos Dead This Time? – Like any asset class, cryptocurrencies obey cyclical laws. Because of their hyper volatility and the speculation they generate, many people regularly announce (the cyclicality of things…) the death of Bitcoin and the bursting of this “bubble”. Despite all the excitement around these topics, the downtrend that started in November 2021 is starting to erode speculation. The volume of derivative contracts on BTC and ETH are a relevant barometer to gauge it.
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Bitcoin: the volume of futures contracts at the lowest since 2020
After the frenzy of the last bull market, futures traders seem to be gradually losing interest in Bitcoin. For the benefit of Ethereum. The imminent transition of ETH to the beacon chain (secured by Proof of Stake) is attracting the attention of the market and its participants. The whales are already in place visibly.
To the point that players are turning away from Bitcoin and prefer to position themselves on Ethereum on the assumption that The Merge will bring volatility, among the lot of uncertainties and misunderstandings it brings.
The graph above shows that the maximum interest (over this period) for this type of derivative contracts was reached during the spring of 2021. Since then, the volumes have only been falling.
The all-time high for the time period also occurred in May 2021 for ETH. The trend followed that of Bitcoin until last April. Since that date, and as the transition to ETH 2.0 becomes clearer, there has been a trend reversal. Futures contract volumes are on the rise again on Ethereum.
The return to crypto for the class of 2022 promises to be eventful! After years of preparation (and postponements) Ethereum is about to get a makeover. The long-awaited catalyst to launch the next bull cycle on the hats?
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