Even as Bitcoin continues to grapple with the key level of $64,000, experts are pointing to Ethereum's outperformance of Bitcoin since the Federal Reserve's 50 basis point rate cut as a possible indicator of shifting market dynamics.
Despite the minor pullbacks, institutional interest in both assets persists. Bitcoin spot ETFs reported a net inflow of $106 million on September 25, extending a 5-day streak. BlackRock’s iShares Bitcoin Trust (IBIT) alone saw an inflow of $184 million. Meanwhile, Ethereum spot ETFs brought in $43.2 million, including $26.6 million into Grayscale’s (ETH) ETF, according to data from SoSo Value.
Meanwhile, interest in altcoins and meme coins has surged, according to Peter Chung, Head of Research at Presto Labs.
Speaking with Decrypt, he noted that the renewed enthusiasm extends beyond just Layer 1 (L1) blockchain assets.
"The interest in alts is not just confined to L1s but also quite strong on meme coins, which have rebounded strongly today as European trading hours started," said Chung. "DOGE, PEPE, and SHIB have all spiked noticeably, signaling that the altcoin rebound has quickly become broad-based."
According to data shared by Presto Labs to Decrypt, as market participants explore new opportunities, the spread between on-chain yields and the 3-month Treasury bill remains wide, suggesting that a full-scale on-chain migration of capital might not happen until 2025.
Nonetheless, attractive annual percentage yields (APYs) on major stablecoins are drawing attention. For instance, DAI through MakerDAO offers a 6.00% APY, while Morph Blue's SPDAI (LTV 100%) provides a 9.81% APY, indicating that decentralized finance (DeFi) protocols continue to offer competitive yields.
According to senior market analyst Alex Kuptsikevich of FxPro, while stock indices are hitting multi-month or all-time highs, the cryptocurrency market is treading water at a one-month high.
Kuptsikevich emphasized Bitcoin's recent struggle to consolidate above the 200-day moving average. "Bitcoin has been forming a sideways channel just under $2,000 wide, suggesting a period of consolidation with a slight upward bias. A move beyond this range could launch a medium-term trend," he told Decrypt.
Author and intergovernmental blockchain expert Anndy Lian highlighted that Bitcoin's surge past $64,000 has shifted market sentiment into "greed" territory," but added that excessive exuberance often precedes a market correction.
"The current undercurrent of fear on social media suggests that a sentiment shift may be underway, potentially foreshadowing a period of consolidation or even decline in the cryptocurrency market," he added.
Speaking with Decrypt, Lian also noted that the expectation of easing U.S. monetary policy, with a projected 50 bp interest rate cut at the Fed's November meeting, has already influenced recent market movements.
Edited by Stacy Elliott.