Bitcoin experienced a rebound last Saturday when bulls acted quickly to buy the recent dip in price. The cryptocurrency managed to rebound from a recent support point after yesterday’s breakout. Additionally, Ethereum climbed above $1,800, attracting investors who saw the recent drop as an opportune moment to increase their positions in the asset. This article examines the current situation of Bitcoin and Ethereum, their possible potential for growth, and the reasons behind their recent price movements.
Bitcoin
On Friday, BTC/USD experienced a low of $25,878.43, but it rose to an intraday high of $26,989.07 earlier last Saturday. This rebound allowed Bitcoin to move away from its recent two-month low and jump back above the $26,500 key support point. It is also worth noting that the 14-day Relative Strength Index (RSI) found a floor of support at 36.00, which continued to trend towards 43.00. If bulls lead a charge to reach this point or above it, Bitcoin could reclaim the $27,000 level this weekend.
Bitcoin’s recent dip was caused by various factors, including the intentions of China’s central bank to crack down on cryptocurrency mining and trading and Tesla’s recent decision to stop accepting Bitcoin as a means of payment due to its environmental impact. The cumulative effect of these factors caused a drop in the cryptocurrency’s price.
However, investors are still bullish about Bitcoin, as they have been for years. Despite the asset’s volatility, Bitcoin has still outperformed most traditional investments in recent years. For example, Bitcoin was the best-performing asset in 2020, with a gain of over 300%. Bitcoin’s potential as an inflation hedge and a store of value is attracting more institutional investors, which has led to increased demand for the cryptocurrency.
Ethereum
ETH/USD was also back above a key price level to start the weekend, as it rose above the $1,800 marks. It hit a high of $1,816.06 in the session on Saturday, less than 24 hours after declining to a low of $1,747.94 on Friday. Like with Bitcoin, this was helped by the fact that RSI found a stable point of support, which in the case of Ethereum was at the 41.00 zone. This floor has given way, and price strength is now tracking close to a ceiling at 45.00. Should this be broken, Ethereum could possibly move back above a key point at $1,830.
One of the main catalysts for Ethereum’s growth is the increasing interest in decentralized finance (DeFi) and non-fungible tokens (NFTs). Both use cases are built on top of Ethereum’s blockchain, making it an essential asset in the crypto ecosystem. Additionally, Ethereum’s shift to a proof-of-stake (PoS) consensus mechanism has reduced its energy consumption, addressing some of the environmental concerns that have been raised regarding cryptocurrencies.
Final thoughts
Bitcoin and Ethereum have been volatile in recent times, but there is still plenty of optimism surrounding their long-term potential. The possible regulation in China and Tesla’s decision to stop accepting Bitcoin as payment have affected these cryptocurrencies, but investors are still bullish and continue to accumulate these assets. The recent dip in prices has also been an opportune moment for investors to buy these cryptocurrencies, given their potential for growth.
Despite the volatility of these cryptocurrencies, they have outperformed most traditional investments over the last few years. With increasing interest in NFTs, DeFi, and a shift to PoS, Ethereum’s potential for growth is high, while Bitcoin’s potential as an inflation hedge and a store of value makes it an attractive investment for many institutional investors.
