
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.