- The risk versus reward for Ethereum actually looks more attractive than Bitcoin’s.
- With the reduced risk, a whale has bought more than $ 435 million ETH in the last two weeks.
Ethereum [ETH] Buntered back to the level of $ 2,500 after a sharp sale caused by geopolitical fears.
However, the crypto markets tend to return after sharp drops, and ETH was no exception that was for Bitcoin. [BTC] In terms of recovered percentage.
Attractive risk versus rewards
Of course, investors seemed more willing to participate in these levels – and for a good reason.
The neutral to positive sentiment was observed when it came to Ethereum with regard to two important measurements.
The Sharpe Ratio graph indicated that the risk-corrected return of ETH started to rise after a long decline. This indicated the improvement of the assets to its volatility.
That implicit ETH was to deliver better rewards per volatility unit, even in the midst of lateral price action.
At the same time, the Normalized Risketric (NRM) floating at 0.41. Historically, this value has marked moderate risk environment, far from euphoric peaks.
Source: Alfractaal
Moreover, the multi-colored band on the graph indicated that ETH floats in the 0.5 NRM area. The region has traditionally been a fairly balanced zone in terms of accumulation and not in panic or euphoria.
All in all, these indicators suggested a quiet period in the Ethereum cycle, far away from the speculative excess, but with a structural investor.
By forcing the volatility down and improving the risk-reward, Ethereum arose as a more stable currency than Bitcoin.
Will Eth reverse and Outpace BTC?
However, not all signals were calm.
ETH registered a sudden fall of 19% in open interest on Binance, in addition to a competitive price correction from $ 2,800 to sub- $ 2,500.
This pointed to massive liquidations and squeezing for a long time, so that the leverage of the market is flushed.
While fear crawls back, such coils are followed by spells of recovery, in particular when excess leverage comes from the system.
Since risk-to-balance statistics on ETH were still positive, Cycles in the past indicated a possibility of top after liquidation.
Source: Cryptuquant
Nevertheless, a change could only be confirmed by continuously recovering the lost support areas on a volume base.
It is possible that ETH could perform better in the third quarter than BTC, but any type of recovery depends on the stabilization of macro-sentiment and institutional flows.