By CCN: Bitcoin's breathtaking rally has dominated the headlines in recent weeks, but today it's the second-largest cryptocurrency's turn to enjoy the spotlight. The ethereum price surged as high as $281.77 on Thursday, launching ETH to an eight-month high.
The cryptocurrency asset witnessed massive capital influx into its market when its frontrunner bitcoin began to correct from its overbought territory. The inverse correlation signified that bitcoin investors were hedging into the ether market, a theory further validated by ETH's 16% appreciation against bitcoin in the last 24 hours, as shown in the chart below.
The bitcoin price, as CCN reported, doubled during a breakneck 45-day bull run, bringing its gains for 2019 to an impressive 119.26%. The move allowed the cryptocurrency to break above several crucial resistance targets, the last being $8,000, to reclaim a nine-month high of $8,391 on Bitstamp.
The ethereum price, meanwhile, held relatively flat. The cryptocurrency failed to catalyze a massive rally like bitcoin did - at least until May 11 when it suddenly popped more than 20%. The surprise upside movement matured into a full-fledged interim bull run, and ETH ultimately soared 63.59% in just six days.
Notably, the bitcoin price corrected lower today, plunging more than 7.5% to an intraday low at $7,746. As of the time of writing, BTC/USD stood at $7,941 for a daily loss of around 2%.
Ethereum's sudden boom prompted many in the crypto media establishment to give credit the cryptocurrency's improving fundamentals. The blockchain project received boosts from both Microsoft and JPMorgan, each of whom has interfaced with ethereum to various degrees. However, the majority of new money that entered the ETH markets came from other cryptocurrencies - not fiat.
The volume report of the past 24 hours showed that ETH/USD markets accounted for just 5.5% of all ethereum trading. Similarly, euro markets recorded just 1.13% of overall ETH volume.
More than 50% of all ethereum trading volume came from BTC and tether (USDT) markets, suggesting that traders were merely cashing in on arbitrage opportunities between bitcoin, ethereum, and various altcoins rather than bringing new money into the cryptocurrency market.
Disclosure: The author holds bitcoin, bitcoin cash, ethereum, litecoin, XLM, and BNB in his portfolio.
This article was edited by Josiah Wilmoth.
Last modified (UTC): May 16, 2019 2:51 PM