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Ethereum Heads Upward: Why Is ETHUSD Price Soaring?

Sanmi Adeagbo | Jan. 3, 2019
Ethereum Heads Upward: Why Is ETHUSD Price Soaring?

Ethereum is soaring prior to the turn of the year thereby leading to a buoyant Crypto market. Why is Ethereum price soaring?

January 03, 2019 | AtoZ Markets - Ethereum lost its place as the 2nd most capitalized Crypto in the November 2018 bearish onslaught. However, at the turn of this year, it has gained back this place after it overtook Ripple in terms of market capitalization. This Ethereum rally has also been believed to be the trigger to the post-Christmas Crypto rally. Ethereum gained nearly 100% from its 2018 lowest price of $80. On 24th December, price hit nearly $160 to make a 100% gain. The following days saw price plummeted again to $112. The price dip didn't stay long before another wave of rally drove price above $150. Currently, Ethereum exchanges for $149. Bitcoin and Ripple on the other hand gained 37% and 63% respectively to hit $4250 and 45 cent respectively. Their prices have dropped since then - Bitcoin now trades for $3800 while Ripple trades for 35 cent. Why has Ethereum performed much better in the last couple of weeks?

January Ethereum Hardfork

Ethereum has gained about 10% in the last 48 hours, as an incoming hard fork drives the demand for Ethereum token higher. This hardfork will see Ethereum miner rewards drop from 3 Ether to 2. The blocktime will also decrease thereby increasing the speed of the network. After this hardfork, Ethereum is expected to transit from a proof of work protocol to proof of stake. January 16th has been set for this update. Meanwhile, some people believe that Cryptocurrency forks always lead to an increase in their values. This has been proven wrong. Sometimes hardforks lead to minor drops in Crypto prices. In July 2017, when Bitcoin cash was forked from Bitcoin, the price of Bitcoin dropped by 4% despite having good months prior to the fork. Prices later picked and hit an all-time-high five months later. Bitcoin cash also experienced a drop in price last November when Bitcoin SV was split from it. Prices quickly dropped and continued downside in the weeks that followed.

Will There Be a Bull Run In 2019?

Ethereum lost more than 90% of its market value after dropping to $82 from the $1400 peak. Many digital tokens built on the Ethereum network failed to hold their values. However, there is optimism in the Ethereum camp. Last month, economist and cryptocurrency trader Alex Kruger tweeted that he expected a bullish reaction to the upcoming hardfork. He tweeted:

Once mining is past the initial (painful) adjustment period, less mining supply mined by fewer miners will be decidedly bullish

Though Ethereum has been upside prior the upcoming hardfork, it remains to be seen whether this bullish move would be sustained for the next two weeks. The effect of this hardfork might be slight on the general Cypto market. Many Crypto traders and enthusiast will be hoping this bullish start to the year continues throughout the year. The current rally across the board is still very small and not enough to consider that Crypto prices have bottomed. Will 2019 be a good year for the Cryptos? Only time will tell.

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.