As the US dollar is undergoing a tough time and the Merge update for Ethereum is coming, the ETH is getting a lot of benefits. However, even after getting all the balls in its court, the native token of Ethereum is not performing well comparatively. If we see BTC, Ethereum has been underperforming since the start of Friday. From the same timestamp, the BTC has increased by 15% and has reached a value of $22,300. On the other hand, Ether has only gone up to $1750, which CoinDesk reported.
This underperforming phase for Ether has resulted from the rotation of money, which is happening from the end of the traders. They are shifting ETH into BTC. On the other hand, some indicated that it is because of the preventive measures taken by the traders before the arrival of Merge, which has also embarked on the interest to purchase staked ether tokens in the market.
Money rotation from ETH
On 7th September, the ratio between ETH and BTC went to 0.085. This was the maximum value if we see the graphs since December. The momentum for this effect has come down, possibly due to ETH long while BTC short stands. This situation occurs if the asset encounters key resistance after executing a solid rally.
A similar trend was seen by the researcher named Lewis Harland, who works at Decentral Park Capital. He stated that Bitcoin is coming back into dominance which can be a result of being the catalyst for money motion from ETH to BTC.
The dominance of BTC is at 39%, while the charts of BTC indicate bullish RSI divergence. It is observed that traders are transferring their wealth through this divergence.
Trend shifting to stETH
Per the Thielen of IDEG, traders are highly interested in buying the staked ether token of Lido with some discount. This reduces the pressure on purchasing side from the spot market of Ether.
