Markets Weekly is a weekly column that analyzes price movements in the global digital currency markets and the use case of the technology as an asset class.
Bitcoin prices traded for the most part between $ 410 and $ 420 for the week between March 11 and March 18, as 30 million BTC were traded on exchanges around the world.
Digital currency price moves were largely subdued, starting the week of March 11th at 12:00 UTC at $ 416.24 before breaking above $ 420 at 09:10 UTC. For the remainder of the week ending March 18 at 12:00 PM UTC, the digital currency hovered between $ 410 and $ 420.
Since then, Bitcoin price has weakened, falling around 14:00 UTC to a low on release of $ 403.63 at 19:45 UTC, down from $ 11.43 over the course of the day.
However, the modest price moves may have been overshadowed by the sudden attention paid to Ether, the token that powers the Ethereum blockchain.
Ether, which has generated significant visibility as a digital asset, saw sharp fluctuations over the week. The development is remarkable as Ether serves to run applications on the Ethereum blockchain and does not position itself as a store of value.
Ethereum released Homestead, the first production version of its software, on March 14th. Due to Ethereum’s success in drawing attention to itself, some members of the digital forex trading community believe that Ether is starting to serve as an attractive protection for the uncertainty surrounding Bitcoin.
The Bitcoin community is currently struggling with uncertainty caused by perceived issues regarding the size of their processing capacity. Some argue that the protocol needs to be updated to accommodate more users, and others suggest top-level networks that would build on its stability.
In the midst of this situation, Ethereum is developing “as a strong hedge against Bitcoin,” said digital currency expert Joseph Lee to CoinDesk. Lee, founder of the Bitcoin derivatives trading platform Magnr, emphasized that earlier this month, many Bitcoiners “bought Ether to take advantage of the current state of renewed interest”.
However, despite the attention, ether trading is still in its early stages. Much of the exchange trading currently takes place on a single exchange, the U.S. Poloniex, although other major market players, Coincheck and Bitfinex, have recently added offers.
However, while Ethereum may be attractive to digital currency traders with a higher risk tolerance, there are some who see Bitcoin’s relative stability over the week as a position indicator.
For example, Christopher Burniske, analyst and head of blockchain products at investment management firm ARK Invest, noted that Ethereum was peaking at the time it was launched and that its price had fallen since when early adopters tried to get the new attention to benefit.
“Now that ether has fallen about 40% from its all-time high and is still falling, it is interesting to see how Bitcoin holds its price. I would have expected to see a little more pop, ”he told CoinDesk.
Before today’s decline, Bitcoin had a stable week, rising about 1% from $ 416.10 at 12:00 PM UTC on March 11 to $ 418.32 at 12:00 PM UTC today at 12:00 UTC.
Market watcher George Samman also noted that the Bitcoin market is benefiting to some extent from a more active market for Ethereum.
“The thing I’m looking at, however, is how the people of Ethereum get cashed out. There really is an important way forward and that is through Bitcoin. So if you want to sell Ethereum for Fiat, you have to use Bitcoin and vice versa to buy, “he noted.
Ether’s volatile start
In contrast, during the 24-hour period that ended March 14 between 12:00 PM and 11:59 PM, $ 56.9 million of the Ether digital asset was transacted, according to CoinMarketCap’s numbers.
Trading volume is up sharply this month compared to February after hitting a 24-hour volume of $ 57.6 million between 12:00 AM and 11:59 AM on March 6th.
Amid this robust trading volume, Ethereum plunged from a weekly high of 0.036 BTC at 20:00 UTC on March 13 to a weekly low of 0.021 BTC at 12:00 UTC on March 18, further CoinMarketCap data shows.
This drop represented a 41.7% drop in contrast to the roughly flat week-to-week price movement Ethereum experienced between 12:00 UTC on March 11th and 12:00 UTC on March 18th, and both times 0.026 BTC.
Charles L. Bovaird II is a financial writer and advisor with an in-depth understanding of the securities markets and investment concepts.
Follow Charles Bovaird on Twitter here. Pete Rizzo contributed the reporting.
Investor image through Shutterstock