Ethereum’s price rose some $40 overnight, up from a recent bottom of $130 to around $170 at the time of writing, with its market cap returning just above $15 billion.
The move follows a very high level of selling that sent its price down some $100 from around $230 to a brief $130 with some calling it capitulation.
There are suggestions Bitmain’s re-affirmation of their support for segwit2x, which is soon to activate segwit, is what aided the price rise, but a bounce after a huge sell-off is a common occurrence. Not least because a bitcoin chain-split into two coins now appears to be certain.
The question in everyone’s mind is whether this indicates a turn of the market for ethereum, or whether its just a rise before another fall.
There are arguments for both. On the bull side, they might ask who is left to sell as yesterday’s capitulation might have left bears with nothing more to play, so bulls may want to bring their own toys.
Moreover, the bitcoin split may lead some bitcoiners to find shelter in eth, as ethereans found shelter in bitcoin during eth’s split last year.
But the reverse of that argument can be used by bears who might think the split may send everyone to fiat, waiting it out.
What matters here is whether eth is leading the price movements or bitcoin. From observation, ethereum has been doing so recently as shown by its far higher trading volumes.
So the bitcoin worries might be more of an excuse, rather than a cause, with the actual reason probably being the bull and bear cycle.
Where they end and where they begin is usually obvious only in hindsight. But there is an argument to be made for ethereum about sell the rumor and buy the news, which might turn sentiment, as the picture now becomes somewhat more clear, with a bitcoin split seemingly certain.
As such, attention may re-focus on eth in the coming weeks while bitcoiners figure out the value of the two currencies, but we’ll have to wait and see how it all plays out.