Bitcoin and Ethereum, the leading cryptocurrencies had a strong finish at the end of April by marking their respective all-time high prices. The start of 2017 has been staggering for Bitcoin as negative fundamentals have hampered its price growth consistently in phases. Just when the currency was set for a Bull Run, one or the other problem would impact the prices turning the market bullish on a short term scale. Ethereum on the other hand has had a smooth run and gained good momentum during the scalability debate of Bitcoin. Investors proactively transferred their investments from Bitcoin to Ethereum to shield themselves from the price fluctuations during this phase boosting Ethereum’s prices. As we enter the 5th month of the year, the prices of the cryptocurrencies are going up and we believe seasonality is playing a strong role in this. Let’s dive deep into the internal dynamics of each of the cryptocurrency and what is in store for them:
Bitcoin went through threatening times:
Bitcoin had to overcome hurdles that could have ended the digital currency’s existence if the community didn’t reach consensus. The Blocksize debate or the scalability debate brought bearish clouds to the crytpocurrency’s price domain making it extremely difficult for the prices to recover in a quick time. The issue came as an insult to injury post Winklevoss ETF rejection and Chinese exchanges ban on withdrawals. Nevertheless Bitcoin has recovered in a fine fashion to break the all-time highs and register a new high for the cryptocurrency. With the scalability debate now resolved, Bitcoin is looking stronger than ever while trading around all-time highs. What remains to be seen is whether the trend will receive an unexpected boost due to seasonality or just continue to grow/dull down without any influence.
Ethereum sees unexpected boost:
Ethereum has been the cryptocurrency that tackled scalability issues in its formative stages to bounce back strongly into cryptocurrency sphere. Owing to its executable smart contracts on blockchain and applications in various verticals Ethereum has found solid ground to grow without inhibitions. With Bitcoin’s scalability issue surfacing, Ethereum’s prices have sky rocketed to over $40 in the past month. With the talks of a possible Ethereum ETF, the prices further pushed higher making an all time high of $80.
Will the Seasonality Kick in?
We have observed that especially for Bitcoin, the markets have followed a good deal of seasonality with the prices going higher towards the end of the semester. This half yearly pattern may reflect a periodic activity on the part of institutional investors or swift moving of funds from one asset to other in sync with their seasonal cycles. Whatever it may be, the seasonality is a pattern that has been holding for the cryptocurrencies and we can surely expect a sudden spike owing to these factors in the near future.