Bitcoin nears $70,000, while ether eyes $5,000 as the rally extends into a fourth day, aided by a weaker dollar and upbeat investor sentiment

Ether
Ether NurPhoto
  • Ether and bitcoin both rallied for a fourth day on Tuesday to record highs, topping $US4,800 ($AU6,469) and $US68,500 ($AU92,325), respectively.
  • The coin’s momentum spilled over into Tuesday thanks to a lower dollar and an upcoming network upgrade.
  • Crypto fans including the Winklevoss twins and El Salvador’s Nayib Bukele, hit Twitter to cheer on the rally.
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Ether and bitcoin rallied for a fourth day on Tuesday to record highs off the back of a weaker dollar, an upcoming upgrade and positive investor sentiment.

Ether was up 1.6% in 24 hours, having risen earlier to hit a high of $US4,842.54 ($AU6,527) on Coinbase, while bitcoin was last up 3% after reaching a new peak of almost $US68,600 ($AU92,459). Ether has climbed 9% over the last four days, while bitcoin has risen about 8%.

“​​Both digital Dutch tulips, bitcoin and ether, have hit record highs this morning as the street continues to buy on a positive technical picture (and) a lower dollar,” Jeffrey Halley senior analyst at OANDA, a research and trading firm, said in a note to clients Tuesday.

The dollar was largely down against major currencies like the Canadian dollar, Japanese yen, pound and euro. A weaker dollar can offer a boost to assets denominated in the US currency, such as crypto, gold or copper, for example.

Another factor that has propelled both bitcoin and ether has been new buyers jumping into the market. Coinbase, one of the largest exchanges, was the most downloaded app in the US last week, according to GlobalBlock.

“The positive performance of the digital currency is fueled primarily by an organic buy-up from both retail and institutional investors,” Vasja Zupan, president of Matrix Exchange, an Abu Dhabi exchange, said.

He also attributed the rise to the fact that bitcoin’s upcoming “taproot” upgrade that is set to reduce gas fees for transactions and make the network more scalable is due later this week, according to developers.

“Bitcoin has robust fundamentals that will not only help maintain its current uptrend, but place it on a trajectory to reach new price peaks several times over by year-end,” Zupan continued.

Ether’s gains have also been propelled by technical developments, as well as demand. An upgrade to the network has raised the burn rate for tokens and more financial products backed by the coin look set to launch.

Bloomberg analysts predicted last week that the first ethereum futures-based exchange traded fund could launch by the beginning of next year. Meanwhile, Bakkt, a digital asset manager, told Insider over the weekend it planned to let its clients buy, hold and sell ether through its app by the end of the year.

Not all investors are bullish on ether.

“With ethereum now in uncharted water, price action may get increasingly volatile and as such should be treated with caution,” Nick Cawley, strategist at Daily FX said in a note to clients Monday.

However, Cawley felt that bitcoin had solidified in an uptrend.

“The daily bitcoin chart remains positive with the recent bullish channel being reclaimed over the weekend,” Cawley explained.

As bitcoin rallied, crypto fans Tyler and Cameron Winklevoss, the founders of the Gemini exchange, helped fuel yesterday’s price rises.

“68k down. Next stop $US69,420 ($AU93,564),” Cameron Winklevoss said on Twitter Tuesday.

“68k. Next stop 70k,” Tyler Winklevoss said on Twitter Tuesday.

Nayib Bukele, the President of El Salvador, also cheered on bitcoin’s gains.

“Buy #Bitcoin and save the puppies!” Bukele said on Twitter Tuesday referring to the fact that some of his country’s bitcoin profits were going towards building a state-of-the-art veterinary hospital.