Bitcoin and Ethereum are both rallying right now, but today I’d like to discuss some of the stuff happening with Ethereum. With purchasing volumes increasing and ETH hitting profit-taking prices, it seems like we are in for a bull run for the world’s second-largest cryptocurrency.
Ethereum is currently trading in the $250 range, and has hit its second high of 2020. Investors are feeling bullish on cryptocurrency in general right now and you can see that sentiment starting to overflow into other coins as Bitcoin breaks through $10k.
Developments in the Ethereum World
The Ethereum network has been focused on improving its scalability over the last few years, with the Istanbul and Muir Glacier upgrades being launched in order to start tackling these important issues. Scalability is a constant topic of discussion in the cryptocurrency space because mass adoption is one of the few things that would enable these coins to go mainstream and get the long-predicted price appreciation everyone has been waiting for.
Ethereum has also spawned several large DeFi applications (decentralized finance), which means it is well on its way to developing that “killer app” that would enable it to go mainstream in a big way.
Price Movements in the Crypto Sphere
It is fairly common for Ethereum and Bitcoin to move in tandem with each other. IN fact, this generally applies to all coins. One of the common patterns that has been observed in the past is that Bitcoin going up is a leading indicator that altcoins in general will rise.
There are 3 main factors that cause this. First, Bitcoin serves as a gateway to buy many altcoins (such as Ethereum), and these coins aren’t otherwise accessible for purchase directly with fiat currency. Second, Bitcoin is a barometer for the overall cryptocurrency sentiment, as it is the largest cryptocurrency by market capitalization. So when its price goes up, others will follow. Finally, during a bull run, Bitcoin may become overpriced so investors dump their money into other altcoins.
But for today, the price dynamic of interest is Ethereum. It seems like the price goal everyone is hoping for is $300, which would be a strong landmark and a sign that the developments that occurred over the last few years during the “crypto winter” were not in vain.
This “alt season” does extend to other cryptocurrencies, such as NEO, Cardano, and XRP. They’ve all performed well in the past few months and will probably continue to do well going forward. In terms of diversification, lots of investors are probably moving their money to these coins in order to not be overexposed to Bitcoin, especially after the strong price appreciation we’ve seen so far.