In a usual case, the cryptocurrency market generally follows the largest cryptocurrency bitcoin but now the second most leading digital coin Ethereum has taken over. Over the past seven session, while bitcoin has recorded a decline in value by as much as 12.4%, during the same period Ethereum has surged in value by as much as 5.5%.
Considering Thursday's price, ethereum made its fresh life time high of $2593.87, 9 percent higher, while bitcoin recorded a decline of 1% to $54914.92.
Now there have been accorded multiple reasons because of which altcoin are gaining favour. "The recent price movement of bitcoin indicates consolidation. This is a healthy pullback and will provide long-term stability to the world's largest crypto asset. Ether is rallying because of the launch of ethereum exchange-traded fund (ETF) on a Canadian exchange, which is seen as a major step towards making digital assets, mainstream. Ether is expected to break above $3,000 this month," said Shivam Thakral, CEO, BuyUcoin.
Of late bitcoin is not gaining favour due to technical factors. Recently the bitcoin ended below its 50-day SMA for the first time since October 8, 2020. Now as the bitcoin is unable to get over the 50-day SMA level then bears may take tight grip of the market for the near term.
Now, once it exceeds the 50-day SMA then bitcoin prices are expected to remain rangebound in the range of $51000- $58000. And for the divergence between bitcoin and ethereum there are both short as well as long-term measures responsible behind it.
Further, after buying into bitcoin, investors are also diversifying their crypto portfolios and there has been seen an uptrend in Ethereum ever since early 2020. Also, after the rally in bitcoin seems to have stalled, investors seem to have booked profits there and move their value back into long term ether investments.