Weekly recap: BTC hits another new record

Konstantin Anissimov, Executive Director at CEX.IO

Bitcoin at the turn of the year

Bitcoin has been making headlines for weeks now, as the coin kept breaking all previous records, making new ones, and then it broke them, as well. Its upward surge continues day after day, and is only occasionally interrupted by small corrections before its price surges anew.

In the last week — between December 28th and January 3rd — the coin went from $26,850 to $34,608. In other words, the price increased by around 24%.

The coin’s growth came in a few major surges. The first surge was slow but steady, taking place over several days — December 29th, 30th, and 31st. During these last days of 2020, the BTC price went from $26,400 to $29,800. Everyone was speculating whether or not the coin will have the strength to reach $30k, as the resistance seemed too strong.

The first days of 2021 brought an answer to that question. On January 2nd, BTC price saw its second surge, which took it past $30k, and all the way up to $33.150. The coin also saw a sudden drop during the same day, hitting a new support at $31k, from which it skyrocketed back up to its new record of $34.6k. This happened on January 3rd, and the same day also brought another minor correction. This one was stopped by a support at $32,700.

What has been happening to BTC in the past week?

Apart from adoption speeding up, Bitcoin has seen several major news recently, which continued to attract new investors. For example, the coin’s market cap surpassed the value of Warren Buffett’s Berkshire Hathaway, which was a big deal, given that Buffett called BTC “rat poison squared” a few years back.

Another report states that, according to data 78% of circulating BTC supply still remains dormant, and that only 22% (4.2 million BTC) is in constant circulation.

With that said, some of these coins have been locked up for decades now, and they are under constant supervision. They belong to crypto whales, early investors, and some are even property of Satoshi Nakamoto himself.

Well, a portion of these decade-old dormant BTC coins have just moved yesterday, as the coin’s 12th anniversary came along. Whether the coins were moved to mark the event or to take advantage of the price remains unknown.

The fact that BTC just celebrated its 12th birthday is in itself a major event for the coin which was proclaimed dead hundreds of times over the years. It certainly encourages people into believing in BTC, and its ability to keep going and continue pushing for mass adoption.

And, of course, there is always the fact that BTC went above $30k, only to breach the $34k resistance less than 24 hours later.

Ethereum at the turn of the year

While the movement of Bitcoin is nothing short of extraordinary, it is worth noting that the crypto industry’s second-largest cryptocurrency, Ethereum (ETH), saw some impressive movement, itself.

Ethereum found certain stability in the past week, trading sideways for the most of this period. Between December 28th and January 2nd, ETH mostly saw only the smallest price fluctuations, going between $730 and $750, The coin saw some slightly stronger movement here and there, but on a weekly basis — these days saw almost no significant price action.

This changed this Sunday, January 3rd, when Ethereum suddenly skyrocketed alongside Bitcoin. Bitcoin’s birthday is an important event for the coin, and Ethereum’s price simply decided to follow the surge, leading the coin past $1,000 for the first time in almost three years.

In the last 24 hours, Ethereum saw a 39.7% price surge. Meanwhile, on a weekly basis, the coin is up by 53.22%.

The coin’s market cap sits at $123,8 billion, while its daily trading volume went beyond $57.5 billion — almost half of the coin’s market cap.

Now, Ethereum’s price still has some ways to go in order to hit its old ATH, but it is entirely possible that this will happen in days to come. Meanwhile, if Ethereum’s weekend surge continues at the same rapid pace, this might even happen in the next few hours.

What happened to Ethereum in the last week?

Unlike Bitcoin, Ethereum did not really have any major events tied to its price surge over the past week. The coin is a native crypto of its development platform, and Ethereum’s network is the place where things are happening.

The coin did not see any new groundbreaking events, but that does not matter. Its older events are still groundbreaking enough for the coin’s price surge to be perfectly genuine and expected.

As many are likely aware, Ethereum is still the largest force in the crypto universe regarding smart contracts, dApps, and now DeFi. DeFi explosion is still happening — it is only a bit overshadowed by the surging prices.

But, those who care about crypto applications more than the prices are still making DeFi as important as ever. The other thing is Ethereum 2.0 arrival. This is something that will also take place over a large period of time, but the process of switching from PoW to PoS has started — after years of waiting — and that alone would be enough for ETH price to climb back to its old heights.

Lastly, there is its correlation with BTC, which is far from perfect, but it still helps. These are, after all, the two coins that everyone knows — the two leaders of crypto, and are typically considered safe investments.

What to expect next?

So, what is coming in this next week? So far, it is difficult to say. Strong price surges are usually followed by strong corrections, and after hitting $34k, BTC has already started seeing a price dip. At the time of writing (January 4), the coin has retreated slightly below the $30k level, which is not surprising after such a sudden growth. BTC is doing what it always does — it is looking for a support level that will allow it to recuperate and start growing anew.

In essence, BTC price might continue to surge, with the $35k level being its next major goal. The coin’s new ATH is already only a few hundreds of dollars away from this next milestone, and so it would not be surprising to see a surge that will reach it quite soon. After that, the coin would likely set its sights on $40k, and then $50k, as predicted by some experts throughout the previous year.

As for Ethereum, it is reasonable to expect that the coin will hit a new ATH, provided that the BTC price continues to act as it did thus far. But, investors should also keep vigilant due to the potential for major sell-offs, which could result in a price drop.

Executive Director at CEX.IO