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Bitcoin stumbles, ether resists and surprises!

Fri 24 May 2024 ▪ 3 min of reading ▪ by Luc Jose A.
Trading

The crypto market has just experienced a significant upheaval: while Bitcoin undergoes a sharp drop, puzzling many investors, Ether shows remarkable resilience, defying general expectations. How does ETH manage to hold its ground while the queen of cryptos falters? Let’s analyze the forces at play that are currently shaping the crypto market.

Le bitcoin

Bitcoin’s Drop in the Face of American Economic Indicators

Bitcoin fell below $68,000 this Thursday. This decline occurred in a context where the composite PMI index of the United States, which measures the economic health of the manufacturing and services sector, recorded an unexpected increase, reaching 54.4. This figure, the highest since April 2022, surpassed analysts’ forecasts, signaling a more robust economic recovery than anticipated.

The inverse correlation between the rise in the PMI and the drop in Bitcoin can be explained by market expectations regarding interest rates. Investors, reacting to positive economic data, anticipate rate hikes by the Federal Reserve to control inflation, which strengthens the dollar and exerts downward pressure on non-income-producing assets like Bitcoin.

Moreover, the increase in bond yields follows this economic data. Bonds thus become more attractive, draining capital that could otherwise have been invested in riskier assets like Bitcoin.

Ether Remains Stable

Unlike Bitcoin, Ether has shown notable resistance, maintaining its value around $3,790 despite economic fluctuations. By keeping its price around $3,790, Ether demonstrates relative stability even during economic turbulence. This resistance is even more evident when observing the ETHBTC ratio, which has seen an increase, indicating increased investor confidence in Ether compared to Bitcoin.

The analysis of the current situation suggests that investors are increasingly viewing Ether as a safe haven, expecting its performance to remain stable in the long term despite ongoing economic uncertainties. This perception is reinforced by the continuous advancements of Ethereum in blockchain technology. These factors contribute to solidifying Ether’s position as an attractive and sustainable alternative for investors looking to diversify their crypto portfolios during periods of economic uncertainty.

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Luc Jose A. avatar
Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.