Why Has The Ethereum Price Increased by 50% in Two Weeks?
While Bitcoin and other digital currencies have been fairly stable over the last couple of days, Ethereum has shown great bullish potential. Over the last month, the coin rose by over 80%, whereas the last two weeks brought along a 50% price increase – in other words, great profit margins for all new Ether holders.
Before outlining the reasons behind the price jump, it is important to point out that between November and December, Ethereum experienced a massive drop in value, as prices fell from $220 to less than $85. At the time of writing, the price of ether is situated around the $150 mark.
Economic analysts believe that Ethereum’s price increase is linked to two factors: recovery of panic selling and the upcoming Constantinople fork. Its co-founder, Vitalik Buterin, has also recently responded to Ethereum criticism and outlined some of the plans for 2019.
As such, following the abrupt drop in value, numerous Ethereum holders went ahead and oversold their assets. This often happens after steep price declines, and is a practice known as panic selling. Since Ethereum’s market value is considerably higher than $80, crypto stability has encouraged an increase in trust, therefore lowering the sell-pressure. As such, the Ether price quickly started to recover.
In terms of the Constantinople fork, it is important to point out that it will decrease the mining block reward from 3 ETH per block to only two ETH. Based on this, the upcoming supply reduction of the coin will likely bring along an increased demand. To put things better into perspective, the long-term supply of ETH will be affected by the fork – so, traders are actively buying more ether to ensure higher profits in the future.
Analysts have stated that most forks so far brought along an increase in value. While the price is increasing as we speak, a higher spike is expected once the fork takes place, on the 16th of January.
At this time, it is difficult to predict whether the cryptocurrency market is expected to enter another bull rally, especially since the year of 2018 was a hard one.
However, things are looking up for Ethereum - thanks to its recent performance, it has become the best performing crypto asset in December, thus beating other giants like Bitcoin, Bitcoin Cash and Ripple. Luckily, the common consensus amongst crypto analysts is that the digital currency market will continue to grow throughout 2019.