Bitcoin's Potential Gain from Ethereum ETF Rejection
As the cryptocurrency market anticipates the fate of US spot Ethereum (ETH) ETF applications in May, speculation is rife about the potential implications for Bitcoin (BTC). With odds leaning towards a rejection, analysts and commentators are weighing in on how this decision could impact market dynamics.
Declining Approval Odds:
Prediction markets, including Polymarket, indicate a significant drop in bets for ETH ETF approval in May, plummeting by 68% and resting at a mere 24% chance at the time of reporting. Bloomberg ETF analysts Eric Balchunas and James Seyffart have echoed similar sentiments, highlighting the slim chances of approval based on SEC feedback.
Potential Bitcoin Beneficiary:
In anticipation of a possible rejection, commentator Vijay Boyapati suggests that the capital inflows into ETH due to ETF anticipation may revert back to Bitcoin. This shift could potentially drive Bitcoin's momentum, especially if ETH market dominance experiences a notable decline.
Market Dynamics:
Bitcoin's market dominance, currently at 52.4%, has been buoyed by strong ETF flows over the past few months. In contrast, ETH's market dominance stands at 16.5%. Should Boyapati's prediction materialize, ETH's dominance could further slip below 16% or even 15%, prompting a rotation of capital towards Bitcoin.
Impact on Ethereum's Price:
Meanwhile, Ethereum is navigating above a crucial weekly bearish order block, consolidating around the Q1 2022 local top. However, a dip below $3.2K could invite bearish pressure, particularly in the event of ETF application rejections.
