Aggressive Bull Market Speculation on Ethereum Has Not Yet Begun, Indicates Data from Analytics Firm Kaiko
Analytics firm Kaiko has stated that speculative excitement surrounding Ethereum (ETH) has not started yet, despite the cryptocurrency being far from its 2022 lows. According to Kaiko’s report, while Bitcoin has benefited from the hype surrounding the approval of BTC exchange-traded funds (ETFs) in the US, speculation on an Ethereum ETF has not yet taken off. The US Securities and Exchange Commission (SEC) recently postponed its decision on Fidelity’s Ethereum ETF application until March, further delaying Ethereum’s anticipated speculative uptrend.
Kaiko noted that while there is some hype around Ethereum ETF applications, the data suggests that aggressive speculation has not yet begun. The trading volume for ETH has spiked, but the derivatives markets have shown no significant signs of traders positioning themselves for a rally. ETH futures ETFs have also experienced slow trading activity in recent months.
The correlation between ETH and BTC has reached multi-year lows as each asset matures and develops its own narratives. While ETFs have been a significant catalyst in Bitcoin’s history, it remains to be seen whether Ethereum will be able to replicate this. However, Ethereum has various narratives it can rely on, such as the success of new Layer-2 solutions or staking developments like EigenLayer.
Kaiko further revealed that derivatives data indicates recent ETH price movements have been primarily driven by spot markets rather than perpetual futures. This suggests that traders are not leveraging their positions in anticipation of an ETH ETF. Open interest in futures markets hit a low point in September and October, with little price movement and neutral funding rates. Since BTC’s ETF approval, funding rates have returned to neutral, but open interest has surged ahead of price, indicating increased shorting. However, a substantial increase in open interest typically associated with a bull market has not yet been observed.
At the time of writing, ETH is trading at $2,473.
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