The broader crypto market has rebounded, with Bitcoin climbing back to $31,000 and beyond. Ethereum is attempting to break through the $2k barrier. After nine consecutive weeks of losses for Bitcoin, the crypto market recovered remarkably.
Due to Sentiments, the Market Is Dull
Cryptocurrencies have traded like tech stocks rather than as a separate asset class and an inflation hedge.
This is owing to occurrences like the Terra collapse and concerns about the Ethereum merger and imposing legislation, all of which have contributed to broader global economic crises.
The global state of affairs, rising inflation, and rising interest rates all contributed to a poor outlook for crypto investments.
Long-Term Holders Are Not Giving Up
Despite being in the red on some BTC investments, data reveals that long-term investors are still buying Bitcoin in its current range.
When many investors flee the market, bitcoin hodlers are the only ones left, and they appear to be double down as prices plummet below $30,000.
While many investors are uninterested in BTC’s sluggish price action, contrarian investors see it as a chance to add to their positions.
As adoption accelerates, long-term holders are the driving reason behind the recent Bitcoin and crypto market rebound.
Long-term wallets’ total supply returned to an all-time high of 13.048 million BTC.
Ethereum’s Low Transaction Fees Also a Factor
Transaction fees for Ethereum have been steadily decreasing in recent months. Due to user migration from the network to other smart contract networks.
The drop in transaction fees has been alarming, but it is now at its lowest level in ten months, a positive trend for network users. The average transaction fee is currently $5.05, hitting a low of $3 this Sunday. Notably, the ETH Transaction fees have been at their lowest level in almost a year.
This modest Transaction charge has historically served as a guide to the price’s future direction.
The ETH transaction costs had fallen below $3 in July 2021, which resulted in a rise that had pushed the digital asset’s value from around $1,700 to $4,000 in the next two months.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency.
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Source: https://nulltx.com/reasons-for-bitcoin-and-ethereums-recent-price-spikes/