Ethereum has lost some 10% to bitcoin in value today with it falling from close to 0.033 BTC yesterday to now 0.030 BTC as pictured above.
While bitcoin has risen by some 5% today to near $12,000, ethereum has fallen to $370 from a recent high of $385.
All other cryptos have fallen too, with eth falling less than the rest, but the question is why is it not rising like bitcoin or for today like stocks too?
It’s not very clear what the answer is, but it may well be it’s bitcoin’s time, and therefore it is sucking value from other cryptos.
Another reason may be that the decentralized finance (defi) space is in red today and all of this week, something that could affect eth.
Primarily due to impermanent loss. That’s say if you pair ETH/YFI on Uniswap, YFI is sold and eth is bought if YFI’s price rises.
That’s what happened for much of summer, propelling eth to $480 at the recent high.
Now however defi tokens are falling, so eth is sold to buy these tokens if they are pooled in Uniswap or likewise dapps.
On the other hand, all this profit taking from defi tokens has to go somewhere, with eth itself probably one of the chief candidates.
But, they could also be sitting on wBTC, which effectively translates to BTC as the actual bitcoin is taken out of circulation to be tokenized into wBTC which can then be used in defi.
Making any analysis somewhat complex, with this situation whereby bitcoin rises while eth falls being quite rare, but it does occur generally when the baton is passed on.
That is for much of summer eth has been leading, with bitcoin now taking the show at least for today, while eth watches.
That will probably change with eth maybe to follow as bitcoin profits perhaps are distributed to other cryptos eventually.