Bitcoin Outperforming Ethereum in 2023
The price of Bitcoin has surged by 30% compared to Ethereum (ETH) in 2023, with no signs of slowing down. Looking at the weekly chart, BTC is on the verge of pushing ETH to lower spot rates, hitting new lows for the year while continuing its gains from earlier this year.
Will Bitcoin Continue to Rally?
Bitcoin bulls are currently leading the way. Despite attempts for higher highs in mid-August, BTC has extended its rally against ETH, as shown in the weekly candlestick arrangement. Even though there was a brief period where momentum shifted in favor of ETH, bears quickly reversed those gains and continued the primary downward trend that began at the start of the year.
The Impact of Mid-March 2023 Events
The trajectory of Bitcoin’s performance seems to have been influenced by events that occurred in mid-March 2023. During that time, ETH experienced a significant devaluation against Bitcoin, resulting in a bearish engulfing bar with a spike in trading volume. The surge in demand for BTC caused prices to reverse progress in late October 2022.
Bitcoin’s Rally and Decreasing Trading Volume
Bitcoin bulls have continued to gain ground against Ethereum. However, it is worth noting that BTC’s rally has been accompanied by light trading volume. Despite printing lower lows, trading volume has been contracting since BTC’s rally in Q1 2023 compared to ETH.
Regulatory Pressure and Hacks Impacting the Market
The current draw-down in the market’s activity cannot be determined at this moment. Over the past six months, there has been a significant decrease in participation due to declining sentiment. Regulatory involvement from entities such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) has had a negative impact on cryptocurrency activity.
In June, the SEC filed lawsuits against Coinbase and Binance, accusing them of various violations. These actions have made the broader community more cautious, especially considering the number of hacks targeting exchanges and decentralized finance (DeFi) protocols, some of which have been linked to the Lazarus Group allegedly sponsored by North Korea.
Anticipating the Bitcoin Halving Event
Despite the current market lull, traders are looking forward to the upcoming Bitcoin halving event in 2024. This event is expected to create a supply shock and make BTC scarcer. Whether this will push BTC to lower ETH prices back to levels seen in June 2022 remains uncertain.
Hot Take: Bitcoin’s Dominance Continues to Grow
As Bitcoin continues its impressive rally against Ethereum, it solidifies its position as the dominant cryptocurrency. Despite regulatory challenges and security concerns, BTC’s performance remains strong. With the upcoming halving event generating anticipation among traders, Bitcoin’s value may further increase in relation to other cryptocurrencies. However, only time will tell if this trend will persist or if ETH will regain its footing and challenge Bitcoin’s dominance once again.
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