After New Highs, Ethereum Returns to Rangebound Trading
Following a string of new all-time highs last week, the price of ether has returned to a tighter trading range to begin the week.
The price of ether, which powers the smart contract-based blockchain ethereum, reached an all-time high of $55.11 on 17th March, nearly 100% higher than its price of roughly $28 on 14th March, according to CoinMarketCap.
Yet, since then, its price has changed direction, falling more than 40% to $31.70 the following day and then rallying nearly 50% to $47 yesterday.
According to analysts, the boost has been largely driven by the growing fears that the bitcoin network could split into two separate blockchains, resulting in two different bitcoin tokens that would be independently traded.
“This is not really about ethereum, which has had little news recently,” cryptocurrency fund manager Jacob Eliosoff told CoinDesk.
“It’s all about the bitcoin train wreck, and the growing awareness among investors about ether as an alternative.”
Eliosoff was not the only market observer to point to bitcoin’s challenges.
Vinny Lingham, an investor and entrepreneur, stated that “concern over a hard fork” in bitcoin is one factor that has led to an increase in ether prices.
Rush the exit
Yet, not everyone believes that ether is winning all of the funds exiting bitcoin’s more bearish market.
Harry Yeh, managing partner of investment firm Binary Financial, noted that while ether may be winning funds from traders who would otherwise withdraw into fiat currencies, traders are taking this option as well.
“When bitcoin bounced, there was a lot more ether selling and bitcoin buying,” Yeh noted.
Now, he said most money is exiting the crypto market to more traditional assets.
Martin Garcia, vice president of Genesis Trading, also emphasized that ether’s lack of liquidity could have very easily fueled the digital currency’s recent volatility.
He told CoinDesk that:
“You have very little liquidity so the price fluctuations tend be severe.”
Image Source: https://www.youtube.com/watch?v=38tPZGEiJFo