The Future of Ether: Why a Price Shift Could Be Imminent With Dencun’s Upgrade – According to QCP Capital

Despite ETH’s recent rise past $4,000, QCP Capital warns of⁣ a potential ⁢correction due to a shift in market sentiment and a low probability of a spot ⁤ether ETF approval.

The Singapore-based company is cautiously confident ‍about ETH’s long-term potential,​ thanks to current market dynamics and‌ ongoing network upgrades, but worries about the market’s ‌leverage.

ETH hit $4,000 ‍for the first time in two ⁤years, but QCP notes a negative‍ shift in market sentiment as evidenced by negative ⁣risk ​reversals, which ​measure the difference in implied volatility​ between call and put options. This could be due to the low likelihood‌ of a spot ether ETF approval in the near‍ future.

However, QCP points out that token price reflexivity may boost Ether⁤ and its Layer 2s, especially given the recent Dencun upgrade. Additionally, external forces⁣ such as ⁢new capital flowing into Layer 2 ecosystems could further boost token⁣ price. ⁤However, ‍this optimism is balanced against the Polymarket prediction market’s quite low 31% chance of ether ETF approval by May 31.

Notably, other news outlets point to ⁤greater demand for eth put options, as acknowledged by negative skew of one-month and 60-day call-put ratios, which may​ be⁤ preparation for short-term ‍value corrections. Nonetheless, long-term sentiment remains mostly positive.

On the other hand, QCP is concerned that‍ current market reports suggest market-wide ⁤over-leverage⁤ remains a reality. However,‍ even​ if traders⁣ initially panic, they will likely promptly return and buy back any dips, as seen in ​late 2020 and then again when prices⁤ fell by 30% in -> May” 2021​ and for 10% in January 2021.

The digital trading firm notes that ETH has outperformed the CoinDesk 20 (CD20), ​growing upwards⁢ by 54% in the last month as compared to the CD20’s 50% increase — a sign of ETH’s renewed strength over the past month.

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