In a recent Coinbase Weekly report, analyst David Duong suggested that Ethereum (ETH) and Solana (SOL) are showing increased price sensitivity in the current crypto market environment. As market participants adopt a cautious stance, these altcoins have higher betas of around 0.85 and 0.83, respectively, indicating a stronger reaction to broader market volatility.
Duong noted that both ETH and SOL have become significant “beta movers” in the crypto space, exhibiting greater volatility compared to the overall market. This increased sensitivity suggests that changes in market conditions could lead to more significant movements in the prices of these altcoins.
In finance, “beta leverage” refers to an investment strategy that involves choosing assets with a higher beta, meaning they are more sensitive to market movements. Beta is a measure of an asset's volatility relative to the overall market.
The report also cited the CME FedWatch tool, which shows a 62.5% chance of a 25 basis point rate cut and a 37.5% chance of a 50 basis point rate cut at the Federal Open Market Committee (FOMC) meeting on September 18. Historically, rate cuts are associated with increased market liquidity, potentially encouraging investors to explore riskier assets like Bitcoin and ETH for higher returns.
*This is not investment advice.