Bitcoin has exceeded US$100,000 for the 7th time. Can Ethereum keep up this time?

Author: 1912212.eth, Foresight News

The long-lost big market has finally begun. On the evening of May 8, BTC broke through the $100,000 mark and rose all the way, standing above $102,000, and the weekly chart achieved five consecutive increases. However, the most impressive performance is Ethereum, which has always been criticized, with an increase of more than 20% in 24 hours. After breaking through the $2,000 mark, it stood at $2,200. ETH/BTC returned to above 0.02, rebounding by more than 14% at the lower point.

The explosion of Ethereum also led to a surge in the counterfeit market. In the 24-hour increase, the re-pled token EUGEN increased by more than 40%, ETHFI increased by more than 28%, and both OP and ARB increased by more than 15%. In terms of public chains, SOL rose by nearly 10%, SUI and BERA rose by more than 19%, ENA rose by more than 28% in stablecoins, and LQTY rose by more than 39%.

The crypto market has been silent for several months since January this year. What are the factors that affect this rise? How will the subsequent market be staged?

Bitcoin spot ETF has been in net inflows since mid-April

ETF data, as a market capital inflow indicator, shows that Bitcoin spot ETFs have begun to experience continuous net inflows since April 15.

The chart shows that the net inflows on the 2nd exceeded US$900 million, the net inflows on the 1st exceeded US$600 million, and the net inflows on the 5th exceeded US$300 million, while the net outflows were only 3 days, and both were far smaller than the net outflows.

Currently, the total cumulative net inflow of Bitcoin spot ETFs has reached US$40.77 billion, and the strong inflow of funds has laid a solid foundation for the takeoff of BTC prices.

Listed companies such as Strategy are still buying and buying

Data shows that Strategy spent $555.8 million to increase its holdings of 6,556 BTC from April 14 to 20, with an average price of $84,785. Subsequently, it spent another US$180.3 million to increase its holdings of 1,895 BTC, with an average price of US$95,167 each. In addition, Strategy has launched a bold "42/42 Plan", which plans to raise $84 billion to buy Bitcoin within two years, after implementing a $42 billion "21/21 Plan" last year.

Japanese listed company Metaplanet increased its holdings by 145 BTC on April 24, and on May 7, it spent another $53.4 million to increase its holdings by 555 BTC. In addition, it also issued a normal bond worth US$25 million on the same day for additional purchases of Bitcoin. When the CEO of Metaplanet issued a shareholder letter, he said that the company will continue to firmly advance its Bitcoin strategy, with the goal of achieving a cumulative holding of 10,000 BTC by the end of the year.

Indian listed companies Jetking, Nasdaq listed company Thumzup, and US-listed medical technology company Semler Scientific are buying or planning to buy more Bitcoin.

BTC long-term and short-term holders have increased their holdings

Glassnode data shows that both Bitcoin short-term holders (STH) and long-term holders (LTH) are increasing their holdings. Among them, LTH has continued to accumulate since early March, and STH has also begun to increase its holdings in the past week. Glassnode defines LTH as an investor who holds BTC for more than 155 days, while STH is an investor who holds less than 155 days. According to its latest weekly report, LTH has increased its holdings by more than 250,000 BTC since the beginning of March, bringing the total holdings of the group to exceed 14 million.

This shows that market confidence is recovering and the accumulated momentum has exceeded investors' tendency to sell and risk aversion.

BTC was in a loss state when it approached its local low of $74,000. However, as the market recovered, this figure has dropped to around 1.9 million BTC, indicating that more than 3 million BTC has returned to profitability.

Ethereum spot ETF continuous net inflow combined with Pectra upgrade

benefits

In terms of Ethereum spot ETF data, it also performed optimistically. Since the end of April, the net inflow on 7 days has been achieved, of which the net inflow on 3 days exceeded US$60 million, and the maximum net outflow on a single day has not exceeded US$30 million.

In addition, Ethereum has completed the Pectra upgrade, which is the first upgrade of the Ethereum main network since the Cancun upgrade in March last year. It includes two collaborative updates: the Prague execution layer hard fork and the Electra consensus layer upgrade, and plans to include 11 Ethereum Improvement Proposals (EIPs). Several important EIPs in this upgrade include EIP - 7251 (increase the maximum valid balance of the verifier), EIP - 7691 (increase the Blob throughput), EIP - 7623 (increase the call data (calldata) fee), etc.

This upgrade has made considerable technological improvements to both the Ethereum main network and ecological projects, and market funds are directly reflected in the ETH currency price and ecological projects in their emotions.

USDT and USDC's total market value increase by more than 4% in a single

month

The total market value of stablecoins is still hitting a new high. According to DefiLlama data, the current total market value of stablecoins has reached US$242.226 billion, with an increase of more than US$16.078 million on the 7th. USDT rose 3.75% month-on-month, with a market value of US$150.179 billion, USDC rose 1.18% month-on-month, with a market value of US$60.904 billion, and has declined since hitting its high at the end of April.

(USDT market value chart)

The market value of the two major stablecoins has increased instead of falling, which means that funds are still injecting into the crypto market.

(USDC Market Cap Chart)

Fed rate cuts may be held in June-July, and the Sino-US tariff war may be

settled

In the early morning of May 8, the Federal Reserve announced that it would keep the federal funds rate level unchanged in the range of 4.25% to 4.5%, the third consecutive time the Federal Reserve has not cut interest rates since its January and March meetings this year. "The monetary policy outlook may include lowering short-term interest rates. He said at a press conference that the outlook "may include" interest rate cuts or keeping interest rates stable, depending on the economic situation." The fluctuations in GDP data will not really change our situation. "This has further exacerbated tensions between the Federal Reserve and the White House. Trump has repeatedly criticized the Federal Reserve for being Jiangxi, and said that talking to Powell is like playing the piano in a cow, and Powell is always too late.

The current probability of the Fed cutting interest rates by 25 basis points as early as June is 30%, slightly higher than the 27% earlier. According to futures prices, the likelihood of a rate cut by July is about 75%. Recently, the Bank of England has cut interest rates, the People's Bank of China has also cut interest rates, and global liquidity M2 is also rising. The Fed's interest rate cut is expected to promote capital flows into crypto assets.

In terms of tariffs, Trump's wielding the tariff stick made the global capital market tremble. Under the pressure of market and domestic public opinion, Trump finally couldn't sit still and frequently proposed peace talks to China. On May 7, the Chinese Foreign Ministry announced that Vice Premier He Lifeng will visit Switzerland from May 9 to 12, and held formal talks with US Treasury Secretary Besent and Trade Representative Dai Qi. This is the first time that China and the United States have face-to-face consultations on economic and trade issues since the 2024 G20 Summit, which is interpreted by the market as a clear signal that both sides have "suspended tariff escalation."

Follow-up market trends

Raoul Pal, a former Goldman Sachs executive and founder of Real Vision, tweeted, "I think BTC's dominance has reached its peak today. There are currently daily, weekly and monthly DeMark top signals, and the top level is below the 2021 high, and the 2021 high is below the 2017 high. If this judgment holds true, it will mark the arrival of the next phase of the Banana Zone (referring to the counterfeit season). Let's wait and see."

Chris Burniske, a partner at Placeholder who has been shouting that the bull market has not ended, tweeted again, "When the blockchain economy flourishes, it has the fastest economic feedback loop in any trillion-dollar system in the world: activity - on-chain capital inflows - price - activity. When we fall into despair, we always forget this and be surprised by how quickly wealth changes."

"Bitcoin's new breakthrough of $100,000 is not only a reshaping of confidence in price, but also a firm vote for the global vision for the future of decentralized finance. As the impact of news related to the trade war gradually weakens, the gold market has also entered a wait-and-see period, and risk appetite has returned to dominance."

Arthur Hayes, co-founder of BitMEX, the most optimistic "king of orders", said that Bitcoin will reach $150,000 by the end of May.