By Sam Boughedda
Morgan Stanley analyst Sheena Shah wrote in a note to clients regarding the crypto market on Monday that the largest alt-coin is underperforming, similar to the downturn in 2018.
Crypto derivatives are diverging from their underlying assets, and a large crypto lender has stopped customer withdrawals, said Shah, presumably referring to lender Celsius Network.
“Ethereum (ETH) is weakening faster than bitcoin. USD liquidity is being taken out of markets and expectations of higher Fed interest rates are negatively impacting crypto prices,” wrote Shah. “When the relative cross falls, it is a sign that the broader crypto enthusiasm is waning as investments are being taken out of the more volatile ‘alternative-coins.'”
Shah added that “ETH’s price cycle in USD terms appears to be similar to 2018 when mapping it versus the peak.”
“The potential difference in the current price cycle is that it is largely institutional crypto participants selling as opposed to 2018 when retail participant trading activity was much higher.”