Ethereum Showing Extreme Weakness - Major Trend Break
Just thought I would leave this here to see how it evolves as I don't look at Ethereum much besides the utility of stablecoins.
In the past months Bitcoin has hit a macro bottom and completed a pretty good bounce roughly 90% indicating true accumulation + interest and this is before the Spot ETF's had been announced.
Ethereum on the other hand had actually dropped under Bitcoins Macro bottom and had been trending to stay alive on the the line (Green) 56%.
Compare BNBUSD we see the same picture indicating less and less interest in the native Eth token what could be some of the reasons?
Many allocators interested in Bitcoin could only really use exchanges via bank transfer > stablecoin of your choice mainly USDT > Bitcoin, this means the majority of volume and price upkeep on the native Ethereum token is not based on its own unique ecosystem rather based on the Stable coins providing the only mode of transport.
We see the decline of Ethereum's strength directly correlated with USDT, USDC, BUSD declining growth proving this theory including MSTR (MicroStrategy) offering one of the only alternatives to have exposure to Bitcoin.
Where is this going where does it lead?
Simply if the stable coin model fails to provide more and more liquidity to feed the BNB or Ethereum Chain the chains results to failing unless you can keep the native token price up.
Spot Bitcoin ETF's and internal Fidelity trading platforms will render stablecoins needing to use blockchains like Ethereum, Solana, Binance Chain not needed.
Paolo Ardoino (Tether CTO) explains this model very well, exchanges forcefully chose to not adopt Bitcoin Lightning Network due to basically no fee's and no native token, forcing Ethereum / BNB forces liquidity into L2 chains and staking funding exchanges to do more marketing.
See if Spot ETF's come in and other exchanges like Coinbase, Bitfinex etc adopt Lightning Network the demand for stable coins on Ethereum / Binance Chain would free fall and its already starting.
As the NFT / DeFi hype continues to decline leading exchanges will need to change their business model like firing thousands of employee's and adopting Lightning Network and eventually USDT, USDC will run on Lightning Network.
Paolo Ardoino 🍐 Tweet
https://twitter.com/paoloardoino/status/1680291595403264000
We will see over the months how this develops.
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