Recent news stories surrounding the price movements of Bitcoin and Ethereum have been captivating, with the declining phase in early May seemingly behind us, although the ongoing consolidation phase since mid-March continues.
Regarding the price development of Bitcoin and Ethereum, there have been a number of news stories over the past few days that are unquestionably fascinating.
Price of Bitcoin, recent headlines, and a comparison to Ethereum
A long phase of lateralization with swings between $26,000 and $30,000 has started when BTC’s price crossed $27,000 for the first time this year on March 18. when then, there have been extremely few and very brief excursions outside of this range.
Although it is not excessively constricted, the price range is still not exceptionally vast. It is sufficient to recall that the price was under $20,000 just one week prior to the start of the lateralization phase.
The latest events are what I find to be the most fascinating.
The price of Bitcoin had actually retraced, coming down to approximately the $27,000 level after reaching its annual peak in mid-April at over $31,000. Even though it had attempted to recover above $30,000 once more in late April without being successful, it was back slightly above $27,000 by early May.
This level is important right now, as is clear to see.
On May 11, it had undergone a fresh retracement, which caused the price to drop as low as $26,000 on May 25.
The fascinating thing is that it has made a significant resurgence over the past four days, returning it to levels above $27,000 and then $28,000.
Because the descending phase that had happened during the first half of May has now been totally overtaken, the lateralization phase is still in progress.
Even yet, there is no guarantee that the rebound will last for much longer in the ensuing minutes or days.
Recent cryptocurrency news on the price of Ethereum following Bitcoin
Ethereum can be justified similarly, but with some differences.
In actuality, the $1,900 recovered today appears to be the reference price rather than the $1,800 recovered on Friday.
Similar to how ETH’s first break of its $1,800 2023 high occurred on March 18, the price subsequently rose far above it. It has not lingered around $1,800 during the protracted lateralization phase, but rather around $1,900, with peaks above $2,100 in April.
The Sepolia update of April 12 had an impact on the market, driving ETH’s price up already in the weeks prior and significantly higher in mid-April. This is what accounts for the majority of the difference with BTC.
The retracement was higher at that point, even falling below $1,800.
As a result, when compared to the price level in mid-March, the area where Ethereum’s price has been circling for more than two months now is greater than that of Bitcoin.
The ETH flame
Additionally, the burning of ETH is happening quickly.
In truth, a portion of the transaction fees paid by users of the Ethereum blockchain have been burned for several months already. As a result, out of the 120.2 million total ETH that are now in existence, 3.33 million ETH have been destroyed to date.
For instance, the supply of Ethereum increased from 109 million to 117 million from early 2022 until September 2021, when the burn process started, an increase of 7% in just over a year and a half.
In contrast, it only rose to 120 million from September 2021 to the present, a 2.5% growth in less than two years.
Additionally, since September 2022, when Proof-of-Stake was implemented, it has dropped from 120.5 to 120.2 million ETH, a 0.25 percent decline.
Because its money supply is no longer growing, Ethereum hasn’t been an inflationary currency for about a year now.
Return of Chinese investment
The news of the reopening of cryptocurrency exchanges in Hong Kong may be part of the reason why Bitcoin and Ethereum prices have recently increased.
Despite the fact that Hong Kong has its own laws and is in some ways independent of China’s so-called “mainland,” it is still a part of China and is governed by the authoritarian Chinese government.
Therefore, the reopening of cryptocurrency exchanges in Hong Kong is considered as an opening of China to the cryptocurrency industry and signals that not just capital from Hong Kong but also capital from all around China may return to the cryptocurrency markets.
Beginning on June 1, capital from Hong Kong will start to flow again. However, sooner or later during the following few months, capital from China may do the same, particularly if China decides to permit all of its citizens to access the cryptocurrency trading services provided by Hong Kong exchanges.
There hasn’t been much optimism about the crypto markets in anticipation of a potential medium-term return of Chinese capital, which may have aided the recovery that started yesterday.