"Bitcoin and Ethereum Rally Overheated in the Short Term... Fundamentals Remain Weak"

The current rallies of Bitcoin and Ethereum are driven by short-term momentum and speculative demand, raising concerns about future movements as fundamentals are not supporting the price action.

On the 12th (local time), crypto research firm 10x Research stated, "Circle's USD 24 billion large-scale IPO is acting as a catalyst for the Ethereum (ETH) price rally, temporarily boosting market vitality," and added, "ETF fund inflows, rising leverage, and the recent positive news from the U.S. Securities and Exchange Commission (SEC) on DeFi have sparked a short-term bullish momentum."

However, the research expressed caution regarding the future upward trend of Ethereum. It analyzed, "Despite Bitcoin surpassing the resistance of $106,000, its momentum appears relatively weak," noting, "This is even more pronounced in Ethereum, where the fundamental base remains weak and price movements do not reflect this weakness."

The report further warned, "Leverage investors are flocking to Ethereum, and the combination with call option gamma hedging has driven up prices, but as the speculative demand in the derivatives market leads the price rally, the market is overheating without fundamental support."