Bitcoin and Ethereum surge 30% in a week

Both Bitcoin and Ethereum prices surged this week, with the former hitting a 28-month high and the latter exceeding $20 for the first time. The two currencies' joint rebound from June 10 to 17 further revealed their connection, attracting the attention of market analysts.

So far, the prices of Bitcoin and Ethereum have been significantly positively correlated in some ways and negatively correlated in others. The trend of a sharp rise in the value of both ended before 12:00 UTC on June 17 , during which the prices of the two currencies showed a positive correlation trend, although this correlation is uncertain upon closer analysis.

This difference is even more pronounced when Bitcoin and Ethereum are negatively correlated, leading some analysts to define the two as competitors. At times, market observers highlight Bitcoin’s challenging nature and Ethereum’s flexibility, which fits in with this negative correlation.

But recently, the two have been rising hand in hand in a positive correlation, and this development has attracted the attention of market observers.

China's upcoming Bitcoin network and uncertain economy will become factors affecting the Bitcoin market.

According to the CoinDesk USD Bitcoin Price Index (BPI), the price of Bitcoin rose 33 % in just seven days, from the opening price of $576.45 on June 10 to the closing price of $767.45 on June 16. According to data from Bitcoinity, this sharp rise was based on moderate trading volume. As of 5 pm on June 17, the trading volume of Bitcoin in the past week reached 12.8 million .

Ethereum’s gains were even more pronounced, with data from Poloniex showing a 42.6% weekly gain . The sharp rise was based on volatile trading activity, with daily trading volumes dropping as low as $ 11.3m on June 10 and as high as $64.4m on June 14 , according to CoinMarketCap.

The higher figure is very close to the all-time high reached by Ether in March – $65.3m.

Growth produces fluctuations

Overall, both digital currencies experienced significant volatility this week. Bitcoin began to rise sharply at 10:30 p.m. UT on June 11 , causing the digital currency to rise 25% to $719.85 at 2:45 p.m. UT on June 13, according to BPI data .

After the big surge, Bitcoin fell 8% to $661.60 at 2:45 pm UTC on June 14. The losses were quickly recovered after closing at $767.45 on June 16 .

Ethereum experienced even more dramatic fluctuations. According to Poloniex data, by 11:20 a.m. on June 14, 2020 , Ethereum had risen from its opening price of $14.38 to $18.94.

By 4:55 p.m. on June 14, UT, Ethereum had fallen 20% to $15.18. By 7:15 p.m. on June 16, Ethereum had hit a record high of $21.10 .

Before the week ended, ether retreated slightly to $20.51 on June 17, before falling sharply later that day on negative news surrounding the signature project.

Uncertain future

The halving of growth, the instability of the Chinese economy, and the latest news from The DAO can help both cryptocurrencies gain traction.

The halving of Bitcoin network rewards has market experts expressing their opinions on the future of the virtual token. Rik Willard, founder and managing director of Agentic LLC , predicts that the halving of network revenue will cause Bitcoin prices to "pop " due to the reduction in the number of new Bitcoins created each day .

“The halving will drive the development of more commercial blockchain applications, thereby stimulating virtual currency prices, ” he said.

Not everyone is bullish, with Tim Enneking — chairman of EAM Crypto Investment Management — telling CoinDesk he thinks “the bitcoin price will go through a period of lows after the halving.”

He stressed that Bitcoin has “more than doubled” since “hovering under $400,” but he predicted that this price increase would not continue.

Ultimately, Enneking told CoinDesk he is “going to be wary of this long-term, big game .”

However, whether Ethereum will be affected by this remains to be seen. Its adjustment policy in response to the Bitcoin reward halving will undoubtedly become an important data for studying market correlation.