April 17, 2024

Bitcoin Gains Ground to Retest $21,000, Takes Momentum from Ethereum

Ethereum has recorded a loss of 0.8 from its recently increased value gained in the market rally. On the other hand, Bitcoin now leads the crypto market rally as we head into the weekend. This is the final weekend before Ethereum’s long-awaited Merge is completed.

Bitcoin Races Faster

Bitcoin currently trades at 10.3% higher on the day as of the time of putting the report together. This came after a swift overnight rally that took the asset back into the $20,000 zone and pushed it further to test the $21,000 zone which has posed resistance to Bitcoin in the past weeks.

BTC/USD price chart. Source TradingView

What is interesting to note is that the ETH/BTC price chart has shown that Ethereum, which had an impressive rally because of its upcoming Merge, has given up most of its initial gains versus Bitcoin. Therefore, Ethereum has lost up to 4% of its price value.

Ethereum increased by about 4.5% versus the US Dollar in overnight trades but it quickly lost the same percentage to the top crypto token, Bitcoin. Note that Ethereum got to touch 0.84 Bitcoin but it currently trades at 0.81. Although it is still up by 5% from its position on the 1st of September.

From an analytic perspective, it is likely that Bitcoin’s recent rally was instigated by fear among Ethereum holders. This fear comes from problems that are connected to Ethereum’s proof-of-work ChainID. It has also been reported that a number of Beacon Chain validators have not been able to update their systems.

Expecting the Merge

The price dynamics going on between Ethereum and Bitcoin are indicating that Ethereum holders are selling their assets and buying Bitcoin instead.

ETH/BTC price chart. Source TradingView

Ethereum led the market rally at a time when market players were not really sure about where the market was heading next. As a matter of fact, there were debates on whether it was a bullish or bearish rally.

The expected Merge is scheduled for the 15th of September after a couple of postponements. But since all requisite upgrades have been carried out successfully, the Ethereum community feels confident that the Merge will go on as scheduled. 

The Ethereum Merge is the migration of the Ethereum system from its current proof-of-work operating platform to proof-of-stake. Among other things, the Merge will increase Ethereum’s power efficiency.   

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