Mapping Bitcoin, Ethereum’s moves amid Middle Eastern tensions, tariff wars
- Bitcoin slipped from $110K to $107K amid Middle Eastern tensions.
- ETH has strengthened against BTC; will it maintain the lead?
Bitcoin [BTC] briefly retested $110K on the 11th of June after softer U.S. inflation data (2.4% annual basis against 2.5% forecast). But it later fell to $107K on Israel-Iran tensions.
Despite the price swings, 21Shares crypto research strategist Matt Mena said the cooler CPI (Consumer Price Index) inflation data could fuel a BTC rally in the long run. In an email statement to AMBCrypto, Mena stated,
“Today’s CPI print may serve as a bullish catalyst for Bitcoin – and it may be the unlock that brings this target ($138.5K) forward by several months.”
He projected that BTC could surge to $120K if it decisively breaks out above $110K and tags $138.5K by the end of the summer. The end-of-year target remained the same — $200K — citing BTC’s corporate trend.
But Ethereum [ETH] was stealing the show in the short term.
Bitcoin lags Ethereum
On the 11th of June, BTC ETFs saw $164.5 million in daily inflows. On the contrary, ETH ETFs recorded $240.3M, underscoring outperformance on the institutional front.
In fact, ETH ETFs have enjoyed a strong inflow streak since mid-May, unlike BTC.
Source: Soso Value
Interestingly, the remarkable performance fronted a bullish breakout for the ETH/BTC ratio, an indicator tracking ETH’s relative price performance to BTC.
Put differently, ETH appeared to be in a great position to surpass BTC in investor returns in the near term.
Source: ETH/BTC ratio, TradingView
In early May, ETH outperformed BTC by about 40%, as shown by the ETH/BTC ratio rallying from 0.01 to 0.02. It consolidated afterwards, forming a bull pennant pattern.
A textbook breakout from the formation could extend the ETH/BTC run to 0.03. This would mean an extra 28% ETH rally against BTC or $3.15K price target for ETH.
Such a scenario would be great for the altcoin sector if the Bitcoin dominance also declines. However, after the U.S.-China trade deal, some macro tailwind would be tariff wars against other countries and the Israel-Iran tensions.
Over the past two days, 25 Delta Skew has dropped, underscoring rising demand for puts (bearish bets, hedging) over calls (bullish bets).
Notably, the Skew for the 7-day and 30-day tenors declined from nearly +2 to -1, indicating increased demand for short-dated BTC puts amid Middle East tensions.
Source: Deribit
Overall, the Q2 recovery has lifted BTC and ETH amid easing macro pressure. But the renewed Israel-Iran tension could spoil the summer party for bulls.