We have notice that the value of the major cryptocurrencies is quick rising in last days. What Happens? Why Bitcoin and Ethereum is going up?
Bitcoin and Ethereum are growing exponentially
Ethereum broke the $2,300 mark, thanks to which Vitalik Buterin’s cryptocurrency reaches this year’s record. Bitcoin is not going to be worse, because after crossing the $40,000 threshold on Monday, Sathoshi Nakamoto’s cryptocurrency entered the $44,000 level. The next barrier is $50,000, which, according to some market observers, may be achieved this week. Bitcoin and Ethereum have no intention of stopping!
The cryptocurrency market has been blooming green for over a month now. October turned out to be the month in which cryptocurrency spring awakened, despite the autumn weather outside. Over the past two months, BTC has climbed from $27,000 to over $43,000.
In turn, ETH rose from the October level of $1,500 to $2,300. Both cryptocurrencies broke this year’s Bitcoin record. However, there are many indications that Bitcoin and Ethereum will continue to climb in the next 3 weeks of December.
What are the reasons for Bitcoin and Ethereum breaking further barriers?
The first reason should certainly be mentioned Friday’s words of the FED chairman. Jerom Powell announced that interest rates in the US are at a “significantly restrictive level“. The market took this as a clear signal, which was visible not only in the increase in the value of BTC, but also in the record broken by gold – $2,100 per ounce.
When it comes to bitcoin, there is also the expectation and growing hype for bitcoin ETFs. The SEC is delaying its decision to accept applications from market giants such as BlackRock. For many investors, the entry of a corporation worth $10 trillion into the cryptocurrency market is a sufficient reason to invest in BTC.
In the case of Ethereum, the increase is caused by several factors. The main one is (as in the case of BTC) waiting for the approval of ETH-based ETFs. The reduction in the number of ethereum network validators combined with the recent network update called EIP – 1559 also turns out to be important.
The increasingly rapid growth of the two main cryptocurrencies is also influenced by the psychological effect of FOMO, or Fear of Missing Out, which is so ubiquitous today. This fear of missing out makes more and more people want to invest in both Bitcoin and Ethereum.
Bitcoin sets the trend for other cryptocurrencies
Bitcoin is the first and main cryptocurrency in the world. Since the time it was discovered, BTC was always in the middle of attention. It’s no wonder that other cryptocurrencies follow suit. But you have to be careful.
While Ethereum is almost as popular as Bitcoin, most cryptocurrencies have very little value, and after some time their price unexpectedly drops and investors suffer large losses. We are talking about so-called altcoins. I personally advise against investing in altcoins because, in short, they are very unstable.
Nevertheless, many investors, especially new and inexperienced ones, consider the cryptocurrency market to be uniform and when the value of Bitcoin increases, they believe that other cryptocurrencies will also become more expensive. Do you know who influences price fluctuations, no matter what asset we are talking about? To a very large extent, investors, because greater demand causes prices to increase.
As I often say: it is the law of the market. It is no different in the case of cryptocurrencies. And informations about Bitcoin are spreading the fastest in the world. For this reason, many people are becoming interested in trading or investing in digital currencies. These people buy altcoins very often and that’s why we see an increase in the prices of these assets. All started by Bitcoin.
Of course, let’s not forget about Ethereum. The situation here is very interesting, because it is the second most popular cryptocurrency in the world, which means that it certainly has the ability to determine the price trend, but to some extent it owes it to Bitcoin.
ETH is often considered an alternative to BTC, primarily because it operates on its own blockchain system, which means that it is technically completely independent. And this is where it starts to get interesting. Well, most altcoins operate on the Ethereum blockchain. So we have an interconnection between ETH and altcoins. This also affects the prices of these assets.
What might happen in the future?
From what you can see on the charts, we can conclude that we are in the stage of a bull market in the cryptocurrency market, and this is good news. Good especially for active cryptocurrency investors.
Those who have already invested in Bitcoin or Ethereum earlier, when the price was lower a few months ago, are now seeing profits. There are reasons to be happy. I believe that you should keep trading positions open as they are an excellent opportunity for successful long-term investments.
Look at the screenshot below. I have started new transaction some time ago, when the BTC was cheap, and I invested only $10, which I have mined for free in the Stormgain app. I already have over $60 of profit for 100% free!
The main increase should occur next year, when we will witness an important event, the Bitcoin Halving taking place every 4 years. I wrote a separate article on what Halving is, when it will happen and what its consequences are. If you haven’t heard about it, you should check out my article as soon as possible because, believe me, you don’t want to miss this event.
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Well, what to do if you haven’t invested yet? First of all, before you invest anything, first watch the chart to see what is happening on the market. The most important thing is to open a trading position at the right time, i.e. when a given asset is cheap. Currently, Bitcoin is at its most expensive since its last decline, so it would not be wise to buy when it is expensive.
So what to do? My answer is: to be patient and wait for the right moment. The fact that we currently have an upward trend does not mean that the price will only increase! There is always a correction, i.e. a temporary trend reversal, and the best moment to invest is when the correction reaches its bottom, i.e. the price minimum. In short, the price will fall and then start rising again.
For this purpose, I created the concept of “Safe Haven”, i.e. starting trading when the price reaches its minimum. Even when there are temporary drops, for example due to a correction, you will be sure that you have enough capital not only to maintain an open trading position, but to keep profits from the transaction all the time! You can learn more about online trading techniques in my article.
Conclusion
The value of major cryptocurrencies, specifically Bitcoin and Ethereum, has been quickly rising in recent days. Several factors contribute to this upward trend, including announcements from the FED chairman regarding interest rates, expectations surrounding Bitcoin ETFs, approvals of ETH-based ETFs, reduction in the number of Ethereum network validators, the recent network update called EIP-1559, and the psychological effect of FOMO (Fear of Missing Out).
As Bitcoin is the first and most popular cryptocurrency, it often sets the trend for other cryptocurrencies. While Ethereum is also popular, caution is advised when investing in lesser-known altcoins as they can be highly unstable. The interconnection between ETH and altcoins further impacts their prices.
Looking ahead, the current market trend suggests that we are in a bull market for cryptocurrencies, which is good news for active investors. Those who have already invested in Bitcoin or Ethereum are seeing profits, and it is expected that the main increase will occur next year during the Bitcoin Halving event. For those who have not yet invested, it is recommended to monitor the market and wait for the right moment to enter a trading position.
This includes being patient and waiting for corrections and price minimums before investing. Remember that it is important to maintain common sense, and above all, put aside emotions, which in the case of investing or trading on the stock exchange are your biggest enemy.
If you have any questions about trading or investing, not only in cryptocurrencies, please contact me. I’ll be happy to help you!
Kind regards,
Błażej
