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Bitcoin and Ethereum Price Takes Minor Correction Despite Market Optimism

Last Updated March 4, 2021 5:00 PM
Joseph Young
Last Updated March 4, 2021 5:00 PM

On October 17, the vast majority of cryptocurrencies in the market including Bitcoin and Ethereum have recorded slight corrections in price, as the price of Bitcoin fell below $5,600 and Ethereum price dropped to $320.

Price Drop of Ethereum, Despite Optimism Surrounding Hard Fork

Yesterday, on October 16, CCN.com reported that the market has responded relatively well to the Ethereum hard fork, as the price of Ether, Ethereum’s native cryptocurrency, increased to over $340.

The latest Ethereum hard fork, better known as the Byzantium hard fork, is expected to drastically enhance the Ethereum network in various ways. Specifically, the Ethereum Foundation and the open-source Ethereum development community has focused on improving the privacy measures and efficiency of the network, enabling users to transact private transactions with ZK-SNARKs and settle faster payments by removing unnecessary transactional data. As Mohamed Abedelmalik, the Executive Director of Columbia Blockchain Lab, explained: 

“Previously, each transaction’s receipt included the root of the transaction state tree. That is, the root of the Merkle tree immediately after that transaction was added to the tree. The state tree root, is one of the only dependencies one transaction has to other transactions in the block. By removing this dependency and adding several optional parameters, transactions can now be processed in parallel.”

The market anticipated another strong rally after the release of Ethereum co-founder Vitalik Buterin’s statement on the seamless integration of the Byzantium hard fork and the stability of the Ethereum blockchain network thereafter.

But, subsequent to recording an increase of $30 from $310 to $340, the Ether price declined to $320, as the cryptocurrency market endured a minor correction. The correction was likely caused by the four-day rally of Bitcoin and Ethereum. Still, the Ether price is substantially higher than its previous monthly peak at $305, which was achieved on October 12.

The price of leading cryptocurrencies such as Bitcoin and Ethereum tend to correct themselves after a significant surge or a strong rally.

Bitcoin Price Stabilizes at the $5,600 Region

Over the past seven days, the price of Bitcoin has increased from $4,700 to $5,600, demonstrating a truly impressive rally within a short period of time. But, earlier today, Bitfinex, the largest Bitcoin exchange in the world in trading volume that accounts for 10 percent of all global Bitcoin trades, announced its closure in the US.

The Bitfinex team stated :

“As indicated in the announcement, we are terminating trading, deposits, and withdrawal functionality for U.S. individual customers by no later than November 9, 2017. U.S. customers are already barred from receiving financing from other users on Bitfinex’s peer-to-peer financing platform. This restriction will remain and, in addition, U.S. individual customers will no longer be able to provide financing on Bitfinex effective November 9, 2017.”

In the mid and long term, the exit of the Bitfinex trading platform from the US market could be considered as a positive indicator of growth, as Bitfinex, Bithumb, and BitFlyer, three of the largest Bitcoin exchange in the world, are now all based in Asia. Specifically, Bitfinex is based in Hong Kong, Bithumb is headquartered in South Korea, and BitFlyer is located in Japan, three regions that have arguably the most practical and efficient regulatory frameworks out of all major Bitcoin markets.

In the short term, until the US Bitcoin market restructures, the Bitcoin price could remain in the $5,600 region as a consequence.

Featured image from Shutterstock.