10x Research Suggestion: Short Position on Bitcoin for Ethereum

The research company 10x Research recommends that investors balance long positions in Bitcoin (BTC) with short positions in Ethereum (ETH). The company emphasized that Ethereum has weakened against Bitcoin due to the observed weak demand and declining capital inflows in the market.

Markus Thielen, the founder of 10x Research, stated in a note released on Friday: "Our altcoin model still supports short ETH, long BTC positions." Thielen indicated that the institutional purchasing power of Ethereum has significantly decreased. He noted that the most obvious indicator of this situation has been the decline in the rate of new share issuances since September by Bitmine Immersion Technologies, one of the largest ETH buyers this year.

Thielen pointed out that retail investor demand has also weakened, stating that Bitmine's capacity for new Ethereum purchases has been constrained. He added, "If Bitmine has exhausted its purchasing power, then Ethereum's upward potential has also seemingly been depleted for now."

As the signals of weakness in Ethereum are becoming increasingly apparent, Thielen highlighted that the options data listed on Deribit reflects investors' cautious stance towards Ethereum. According to the data, investors are increasingly buying put options (positions betting on price declines). In contrast, the open position volume for Bitcoin options has exceeded $50 billion, setting a record, with demand largely directed towards call options (positions betting on price increases).

Moreover, Google search data indicates a decrease in new Ethereum investors. Thielen emphasized that this situation has made Ethereum more vulnerable in terms of pricing. As a result, 10x Research anticipates that should Bitcoin break upward from its horizontal trend above $100,000, Ethereum could experience a more pronounced decline in value.

Thielen stated, "The BTC long/ETH short strategy remains attractive in this environment and could provide protection even in the event of a potential Bitcoin decline." However, it should be noted that this news solely reflects Markus Thielen's views and does not constitute investment advice.