- Ethereum is decoupling from BTC due to halving pressure
- Ethereum’s price is shrinking when compared to Bitcoin
- ETH and BTC will show less volatility in the first three months post-halving
Ethereum News Today – Ether might seem like a decentralized model of the Internet when compared to the leading digital asset, Bitcoin. However, when it comes to the issue of price, ETH still trails the biggest digital asset by market cap by miles. Ethereum has been decoupling from Bitcoin since the beginning of this year.
Recall that the top two digital assets were originally closely correlated. Now, it will seem like this correlation is changing. The price of Ether started the year skyrocketing. Note that this separation may have been initiated by Ethereum. Now, that Bitcoin’s halving has occurred, the price of Ethereum will likely pull away from Bitcoin for the foreseeable future.
Ethereum’s Price is Shrinking When Compared to Bitcoin
As both digital assets’ price starts to feel the after-effect of BTC’s latest ‘halving event,’ Ethereum is shrinking compared to Bitcoin. Skew markets’ data indicates that Ether’s price as a percentage of that of Bitcoin has dropped to 2.1%. This is reportedly its lowest in 30 days. The only time that ETH’s value as a percentage of BTC slipped below this level was in March 2017.
The disproportional movement between both assets started two weeks before the just concluded Bitcoin halving event. At the time the proportional price of both assets was 2.6%. After Bitcoin’s price increased from under $8,300 to $10,000 at the time, Ether’s price relatively stagnated. Then the difference between both tokens grew.
Ethereum and Bitcoin Traded with Less Volatility During the Early Months of 2020
During the phase mentioned above, we can see that ETH’s price relative to that of BTC was falling. Now that the halving has been concluded, the divergence between the price of the two digital assets is looking less straightforward than it previously was. It is safe to say that for the first few months post Bitcoin halving, both digital assets won’t display high volatility, relative to their prices. The implied volatility comes from looking at the drop by the implied volatility time frames.
The metrics for both assets via this chart have declined to their lowest. The current low point is the least they have been in 6 months. They both seat at 6.9% and 3.1%. After this period, the change will occur although it won’t be consistent. The two asset’s volatility term structure according to their Options contracts, indicate that volatility will be at its peak for BTC by June end, 2020. For Ethereum it will be in September 2020. When it comes to expected price action, Ethereum is leaving Bitcoin but may rejoin in the coming months after Bitcoin’s volatility peaks.