As the most turbulent year to date finally wraps up and comes to a long-awaited end, it seems that reflection is the main theme in these final days of 2020. As we recall all the lessons we’ve learned and what is the extent of the damage Covid-19 left after the big economic turmoil it caused, we can now notice which fields are recuperating faster than expected and which are still in shreds of the pandemic. One of the few industries that have surged and risen from the pandemic ashes is the crypto industry, noting one of its better years, with a lot of positive development occurring despite the coronavirus outbreak. The sector was refined with a lot of improvement, with growing adoption among institutional investors where the interest for crypto is going through the roof. The DeFi sector blew up in 2020, paving the way for numerous DeFi protocols and projects. So, what’s new for crypto and why was this week significant?
Cryptocurrency proved that its digital nature works well with the ongoing crisis, making it one of the best assets to attain in these unprecedented times. Extremely positive price movement was noticed in the last week with Bitcoin and Ethereum. Bitcoin’s price in particular (BTC) started rising again after breaking an all-time high. It was a whirlwind of emotions for brokers and investors across the world as Bitcoin’s price fluctuated, resisting barriers and breaking them in mere minutes. After reaching the $20k checkpoint, it barely showed signs of slowing down and broke the resistance at $21k and later on at $22k even easier. Before anyone realized what was going on, Bitcoin reached a new all-time high of $24,200 last Thursday. This surge was not set by any event, in particular, rather a ripple effect from earlier this year when companies like PayPal and Square added support to BTC and after adoption among institutional investors increased the demand for the coin.
Similar to Bitcoin, the second most popular coin Ethereum (ETH), has also noticed a considerable rise in its price, although not even close to allowing it to hit a new all-time high. The coin was one of the participants in the Bitcoin-led rally that marked the week behind us. The surge started last Saturday, like Bitcoin, and was placed at a strong resistance level at $560. What later followed could be described as a copycat pattern between BTC and ETH, since every time Bitcoin rose, so did Ethereum. When Bitcoin hit its ATH, Ethereum also moved past its major resistance point simultaneously and was priced at $673. When you take a look at the charts of both coins, you can see the similarities. After ETH reached the aforementioned number, it also dropped like Bitcoin, but the drop was stopped with strong support at $640. At the same time, resistance was placed at $660, which stops it from moving further up. This created a safety belt for ETH, with barriers keeping it from fluctuating.
What’s interesting about ETH is not just the correlation to Bitcoin but also the big Ethereum 2.0 launch. Phase 0 was recently completed, and Phase 1 officially began on December 1st. The focus of this new launch is a safer, new, and more scalable version of the coin, and it may take quite some time for the implementation to be completed. Ethereum has started a long-awaited journey that brought back the faith in this project among investors. Given that DeFi was born on Ethereum, this second-largest crypto project is still the most represented platform when talking about DeFi project development.
A week behind us was an extremely successful one for Bitcoin and Ethereum; massive surges occurred, and now, all eyes are on these cryptocurrencies as we wait to see how this trend will play out. Most experts claim that Bitcoin will skyrocket in the coming weeks, which is also supported by the obtained historic data – BTC typically surges several months after significant drops in value. Some crypto specialists disagree and claim that these patterns are coincidental and that Bitcoin moves in cycles. Others predict a drop in its value by half, induced by major corrections of the coin itself. As for Ethereum, it’s still pretty much tied to Bitcoin, and it is least likely that these two will disengage any time soon. At this point, investors will be happy if ETH reaches at least half of its all-time high. Nevertheless, Ethereum has a lot of potential and will attract more investors in the coming months, especially after Ethereum 2.0 is finally introduced.
In conclusion, as we count the days until the end of the most challenging year so far, we also count our blessings and march into 2021 with wisdom and hope of a better tomorrow. Most of us have this feeling that after we embark on the New year, the pandemic will be over, but unfortunately, we have a long way to go. With news of a vaccine bringing hope, distribution and execution can prolong the economic recovery and the world’s return to normal. Nevertheless, cryptocurrency has shown its resilience to disastrous circumstances and prominent potential to expand even more in the future, so keep an eye on these coins, sit back and watch it all unfold in the coming year.