The crypto market usually follows bitcoin, but over the last few sessions, ethereum has taken a significant lead in terms of returns over bitcoin, the world's most famous cryptocurrency.
Over the last seven sessions, ethereum has returned 5.5 percent, compared to bitcoin's -12.4 percent return. At 6.50 p.m. IST on Thursday, bitcoin was down 1% at $54,914.92, while the world's second-largest crypto asset, Ethereum, was up more than 9% at $2,593.87, a new lifetime high.
Many variables, according to analysts, are working in the altcoin's favour. Altcoin is a concept that encompasses all cryptocurrencies that followed bitcoin.
“Bitcoin's latest price movement signals consolidation. This is a healthy correction that will give the world's largest crypto asset long-term stability. Ether is surging as a result of the introduction of an ethereum exchange-traded fund (ETF) on a Canadian exchange, which is seen as a significant move toward mainstreaming digital assets. "This month, Ether is expected to smash through $3,000," said Shivam Thakral, CEO of BuyUcoin.
Furthermore, technological factors are not in bitcoin's favour, despite the fact that it has a market capitalization of over $1 trillion.
For the first time since October 8, 2020, bitcoin closed below its 50-day simple moving average (SMA). The step lower, combined with bitcoin's failure to instantly reclaim the 50-day SMA, suggests that the bears could be gaining control of the market in the short term, according to global cryptocurrency exchange Kraken.
Bitcoin is expected to stay rangebound between $51.000 and $58,000 — historical specific support and resistance levels, respectively — until it closes above the 50-day SMA, according to Kraken.
Experts believe that the recent divergence between ether and bitcoin is the product of both short- and long-term powers. “In the last year, many bitcoin investors have become aware of ethereum and have begun diversifying their crypto portfolios. That's why, since early 2020, ether has been on a solid uptrend. As word of Eth 2.0 has spread, this pattern has become more pronounced. According to Vikram Rangala, chief operating officer of ZebPay, "the breakthrough would lower fees and open up many new doors for innovation."
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