After the Federal Reserves Rate Cut Ethereum Outperforms Bitcoin

Since the Federal Reserve lowered the federal funds rate by 50 basis points last week (9/18), Ether has outperformed Bitcoin. During this period, Ether has risen by more than 16%, while Bitcoin has risen by about 6%. ETH/BTC has risen from around 0.3850 to 0.4181, with a weekly increase of 6.71%.

Ether Financing Rate Turns Positive, Increasing Leverage Long Demand

Ether and altcoins outperform Bitcoin

According to a report by The Block, Ruslan Lienkha, the market director of cryptocurrency exchange YouHodler, said:

The positive financing rate of Ether reflects an increasing demand for leverage long positions, indicating a bullish outlook.

Lienkha added that the financing rate of the cryptocurrency market often exacerbates volatility. Although financing rates typically indicate the medium to long-term trend of commodity markets, the volatility of cryptocurrency financing rates is significantly higher. He believes that opening short positions in the current expectation of a long squeeze seems too risky. However, he also warned that if optimism becomes excessive or external factors change, there may be a risk of market adjustments.

The Bitfinex Alpha report believes that altcoins, including Ether, have performed better than Bitcoin because they have gotten rid of the situation of long-standing open contracts and suppressed valuations. The improvement in financing rates of major exchanges also indicates a positive change in market sentiment.

The financing rates of major exchanges are improving, and the basis yield is becoming more attractive, especially after the recent interest rate cut.

Despite this rebound, the Bitfinex report still expresses concerns about the increasing volatility. The position of altcoins has now exceeded the high point before the deleveraging event in August, increasing the risk of significant market volatility. The report points out that open contracts have reached $11.48 billion, exceeding the August high of $10.74 billion, which is a worrying sign of potential volatility in the altcoin market.

Ether

Altcoins

Bitcoin

Interest rate cut