Bitcoin Lost $10.9M Last Week, While Ethereum Gained $5.1M: What's Driving the Crypto Divergence?
The cryptocurrency market experienced a mixed week, with a clear divergence between Bitcoin and Ethereum. According to CoinShares, there were $7 million in outflows from the cryptocurrency market. This headline figure masks a significant shift: Bitcoin (BTC) saw outflows of $10.9 million, while Ethereum (ETH) saw inflows of $5.1 million last week. But what's behind this contrasting performance?
While the broader crypto markets have been headed in a downward direction recently, Ethereum's positive flow suggests renewed investor confidence. This might be linked to factors independent of Bitcoin's market movements.
Recent market volatility, fueled by fluctuating economic data impacting interest rate expectations, has certainly played a role. Cryptocurrencies reeled from a bout of risk aversion in global markets, contributing to the pressure on Bitcoin. Bitcoin dropped on Monday amid the broad sell-off across financial markets that kicked off last week. The world's biggest cryptocurrency was down as much as 19% over a given period.
Like Bitcoin, Ethereum (ETH) has also experienced periods of decline. Del mismo modo que Bitcoin, Ethereum (ETH) sufre una caída del 11,14% en las últimas 24 horas. De esta forma, la segunda criptomoneda más relevante para el mercado can be impacted by general market downturns.
However, Ethereum surged by nearly 40% previously, outperforming BTC after its largest upgrade to date. This illustrates Ethereum's potential for independent growth driven by technological advancements and adoption of its network. Despite the merge event just around the corner, Ethereum has also lost over 8% in other weeks, highlighting the volatile nature of crypto markets. Once again failing to sustain upward momentum, both Bitcoin and Ethereum are susceptible to market corrections.
The situation is complex, with factors like Coinbase's $2.9 billion acquisition potentially influencing market sentiment across the board, but perhaps not equally affecting Bitcoin and Ethereum. Understanding the specific drivers behind each cryptocurrency's performance is crucial for informed investment decisions.