Ethereum Spikes 60% in February; Factors Behind Crypto’s Spectacular Rally Ethereum has had a blistering month. | Source: Shutterstock Ethereum Spikes 60% in February; Factors Behind Crypto’s Spectacular Rally Joseph Young 24/02/2019 Altcoin News , Altcoin Price Analysis , Crypto , News
In the past seven days, the valuation of the crypto market has increased by $20 billion as the Ethereum price surged by 10 percent on the day.
Since early February, the Ethereum price has spiked from $102 to $163 by 60 percent against the U.S. dollar.
Some analysts have suggested that the strong price movement of Ethereum may have pushed the valuation of the crypto market to rapidly increase in the last three weeks. Ethereum 1-Day Chart, Source: TradingView Why is Ethereum Moving So Fast and What’s Behind the Crypto Rally?
In December of last year, economist Alex Krüger said that in the long run, the Constantinople hard fork of Ethereum is bullish for the price trend of ETH.
The analyst said that the hard fork, which refers to a protocol upgrade on a public blockchain network, will reduce the block rewards on Ethereum, decreasing the rate in which ETH is mined by miners on the network.
Krüger said at the time:
Ethereum’s Constantinople fork is coming on block 7080000, around January 16, 2019. Constantinople will reduce the block rewards from 3 to 2, decreasing new ETH supply accordingly.
On the long run, this is decidedly bullish.
The block rewards reduction was decided on Aug 31 and it should have been priced in. However, exact timing was unknown. Implementation was initially delayed to end of January, and the date (or block, to be precise) was only agreed upon on Dec 7.
However, the Constantinople hard fork was delayed to February 25 and is set to occur tomorrow.
It is likely that the anticipation towards the decline in block rewards is having an impact on the price trend of Ethereum because it reduces the potential supply of ETH in the months to come and increases the scarcity of the asset. Last time $ETH longs/shorts ratio was this high was before the November 60% crash. Constantinople comes Feb/25. Cryptos often raise in anticipation of a fork -long the narrative- reach a local top days before, and crash into the fork. Mind the current crypto pump was ETH driven.
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