Institutional investors focus on Ethereum futures as demand for Bitcoin weakens

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Big investors are looking to Ethereum, according to analysts at JPMorgan. Bitcoin futures have seen weak demand, with BTC futures trading below spot prices. The Ethereum futures premium rose 1%, showing a sharp divergence in demand from the major cryptocurrency.

Institutional investors have increasingly pivoted from Bitcoin to Ethereum since August as demand diverges to the second largest cryptocurrency by market cap. JPMorgan analysts said the main digital asset suffered a setback as BTC futures traded below the actual price of the crypto asset.

Ethereum gains ground as demand for Bitcoin declines

Large investors have regularly turned to other cryptocurrencies, shifting their gaze from Bitcoin to Ethereum, since August. Expectations for the primary digital asset have eased as BTC futures on the Chicago Mercantile Exchange traded below the actual price of the flagship crypto asset.

According to JPMorgan, the trend seems to suggest that institutional investors are turning away from Bitcoin futures trading, indicating a pullback for the major cryptocurrency and reflecting weak demand.

Under typical healthy demand, futures contracts tend to price higher than actual Bitcoin due to the high storage costs for BTC. According to JPMorgan research, the returns available for passive cryptocurrency investments are also causing futures prices to rise.

Bitcoin futures allow investors to place bets and trading contracts tied to the future price of the reference digital asset.

The current weakness in futures is bearish for Bitcoin as investors increasingly flock to Ethereum. The 21-day average of the ETH futures premium has risen to 1% against the ether spot prices, according to CME data. JPMorgan pointed out that this event showed a strong divergence in demand.

Bitcoin price struggles to discover a higher position

The price of Bitcoin is struggling to reach higher levels as BTC continues to record lows. Although buyers stepped in after the recent drop to $ 39,611, the major cryptocurrency has faced a higher signal, potentially waiting for another drop.

The price of Bitcoin has been stuck in a downtrend governed by the descending diagonal trendline on the 4 hour chart. The Dynamics Reversal Indicator (MRI) printed an upper signal, suggesting that BTC could be vulnerable to another dip.

4-hour BTC / USDT chart

The first resistance line for the price of Bitcoin is at the 61.8% Fibonacci retracement level at $ 44,006. BTC will discover additional support at the 20 four hour simple moving average (SMA) at $ 43,225. An additional fulcrum may emerge at $ 41,906, where the support line given by the MRI appears.

If an increase in buying pressure causes the price of Bitcoin to climb higher, the next resistance level is $ 45,815, where the 50 four-hour SMAs and 100 four-hour SMAs coincide. The descending diagonal trendline will be the next hurdle for BTC at $ 46,947.

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