Should Traders Embrace The Ethereum Rally? How Best To Play it?

Institutional Crypto Research Written by Experts

Author

Markus Thielen
May 26, 2024

👇1-11) The one overriding rule in crypto is that announcing a new narrative overrides everything. We have seen this repeatedly: Bitcoin and other crypto assets make massive moves (mostly up) when a new catalyst is introduced, only to sell off once this announcement is realized. The key is to understand the importance of the announcement and react quickly. Traders should be bullishly positioned (at least) until the announcement becomes a fact.

👇2-11) For example, on October 31, 2017, the CME announced the launch of Bitcoin futures “sometime in Q4 2017”. Until the launch on December 18, 2017, Bitcoin rallied by +150%. Similarly, on January 28, 2021, Coinbase announced the direct listing on April 14, 2021. Bitcoin rallied by +80% during that time. We could quote numerous examples, such as Blackrock's Bitcoin Spot ETF filing on June 15, 2023.

👇3-11) This is why we were so bullish in Q4 2023, as a similar playbook was at work that could cause a significant rally. By September 2023, Bitcoin had traded near 25,000, but based on the historical playbook when new regulated Bitcoin products were announced, we expected a rally to 45,000. But what is the best way to play today’s Ethereum hype?

Ether Futures Open Interest (white, RHS) vs. Funding Rate (purple, LHS)

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