BTC and ETH are starting to diverge in a way that signals a rotation.
I've been following the financial markets for about 10 years now, just recently starting to do technical analysis on crypto.
Rotation is the term used in investing when you see large investments being moved from one sector to another.
In traditional financial markets, this could be from equities --> bonds, or retail --> utilities. Anything really. Here's how it looks in chart form:
https://realinvestmentadvice.com/technically-speaking-the-stealth-rotation/
In my opinion, this is what we are currently seeing happen from BTC to ETH.
You can see the diverging correlation between BTC and ETH in this chart:
BTC and ETH had been moving largely in tandem until this afternoon.
Another key is the volume (red arrows). "Volume confirms price" is very relevant here.
SENTIMENT
I think what's driving this is a shift in sentiment. I view this as a bit of an outsider. I've been following bitcoin for about 5 years, but I was always biding my time, just buying a few, waiting to see what would happen. Earlier this year, I started to sense this shift generally.
As new investors are coming into the crypto markets in record numbers, they aren't really going to care about the history of bitcoin and what it means to the community.
I think they are going to see the uncertainty around BTC leading up to August 1st and hop onto the newer, faster blockchain with more current hype and stronger corporate support (whether you or I like that or not).
It's similar to VHS vs Betamax. The market sometimes just decides for reasons we've never thought about.
The trend is towards parity.
I'd love to get some feedback. These are just a few data points, and I'm no expert, but this is what my gut is telling me after years of watching similar setups in other markets.