The price of Bitcoin (BTC) has exceeded $ 34,700 to reach a new historic high after a strong overnight surge. Ether (ETH), the native cryptocurrency of the Ethereum blockchain, also surpassed $ 800 for the first time since May 2018.
Bitcoin’s sudden rise was a surprise because it was drastically corrected to around $ 30,300 on January 2. Within 24 hours, BTC rose from $ 30,300 to $ 34,778, a 14% recovery.
What triggered the Bitcoin and Ethereum rally?
When the price of Bitcoin exceeded $ 33,000 on January 2, some whales and high-net worth investors warned that a 150 BTC sale order could return to the market.
An alias Bitcoin dealer known as “i.am.nomad” I wrote:
“A 150 btc market sale would redo all of that. The more the price goes up, the more retailers distribute prices, the less the bid support will be. “
Within hours, he identified the risk of a Bitcoin correction due to thin order books, the BTC retreated dramatically.
However, Bitcoin recovered quickly after the initial drop, reaching a new record in 24 hours.
The main catalysts behind the Bitcoin boom were the institutional build-up of BTC at Coinbase and the short tightening at Binance Futures.
Over the past three days, Bitcoin has traded much higher on Coinbase than on other major exchanges, as Cointelegraph reported.
This means that aggressive buyers at Coinbase were continually accumulating BTC, despite the premium.
In the meantime, many Binance Futures traders were short selling on BTC, possibly hoping for Bitcoin to reach $ 30,000. When Coinbase buyers continued to push BTC upwards, there was a slight squeeze. Santiment Analysts explained:
“For those who expect a #Bitcoin correction to start 2021, the $ 34,000 #AllTimeHigh reached 10 minutes ago is showing just how painful it has been to be a $ BTC bear in the past 10 months. Average trader returns have not been so high across the board since June 2019. ”
Ether’s price rebounded from Bitcoin’s strong technical momentum. ETH / USD surged past $ 800 for the first time since early May 2018, showing renewed momentum after stagnating throughout December.
A cryptocurrency pseudonym known as “Mayne” said on January 2, before Ether’s discharge, that ETH is probably approaching $ 800. said:
“ETH’s thesis is still on track, closing daily at $ 620, we would reach $ 800. I built a large long position in December and, assuming $ ETHBTC can hold a higher low, I think it will do well. I should have had more BTC vs ETH long exposure in December, hoping ETH would outperform in January. ”
What happens next?
Ethereum has another major catalyst on the horizon, as the CME futures exchange plans to launch ETH futures in February.
Considering the high level of institutional demand for Bitcoin since the first quarter of 2020, demand could also boost Ether in the listing.
Meanwhile, Bitcoin remains on an upward trajectory of price discovery, reaching new records daily. With an alleged supply shortage and an institutional buying frenzy now spreading to retail, the rally may still have much more room to play, with $ 35,000 likely to be the next psychological level to be broken.
As reported by Cointelegraph, six-digit forecasts have become increasingly common in recent months, mainly because the hike has reached new highs.