Bitcoin and Ethereum Rally Over 20% on Week as Crypto Market Recovers $1 Billion

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With Bitcoin and Ethereumboth surging over 20% in the past week, the cumulative value of all digital assets has once again recovered to the key $1 trillion level.

This is the first time the broader crypto market has been valued this high since early November, when the sudden collapse of FTX sent prices soaring.

Peaking at $1.15 trillion on Sunday evening, the total market capitalization is currently valued at $1.01, according to data from CoinGecko.

The main driver of the latest uptrend is primarily the price of Bitcoin (BTC) which hit a two-month high of $21,446 late Sunday night before pulling back to $20,873 at press time.

The largest cryptocurrency by market capitalization recorded a modest increase of 0.5% over the past 24 hours and a strong increase of 22.3% over the week.

Ethereum, the second-largest cryptocurrency by market cap, followed a similar trend, posting a 20.7% increase over the week. It is currently changing hands at $1,548, per CoinGecko.

While several other major cryptocurrencies are also posting double-digit weekly gains, including Avalanche (+38.9%), NEAR (+34.4%), Aave (+33.3%) and Polkadot (+21, 8%), one of the biggest gainers so far has been Solana (SOL), which has seen a dramatic increase of over 64% over the period.

With a market capitalization of over $400 billion, Bitcoin currently dominates a nearly 40% share of the overall market, followed by Ethereum (ETH) with 18.3%.

Bitcoin Mining Difficulty Reaches New High

The price of BTC began to climb last week ahead of the release of the Federal Reserve’s December Consumer Price Index report, which largely met market expectations and showed that inflation in the US economy is showing signs of slowing down.

The latest price action also comes at a time when Bitcoin’s mining difficulty, a measure of how difficult it is to solve the cryptographic puzzle to create a block on the network, rose more than 10% to a new all-time high. history of 37.59 T against 34.09 T on Sunday. , according to data from CoinWarz.

To find the winning hash function that meets the crypto requirements needed to solve a race of blockchain miners against each other, with the winner validating the most recent block and being rewarded. Today’s difficulty levels also mean that the odds of finding the winning value for a single hash are one in 37.59 trillion, which is barely a lot if you’re mining solo instead of joining a pool of mining, which considerably increases the chances of validating a block.

The difficulty is adjusted every two weeks, with the next adjustment estimated for January 28.

Measuring Bitcoin’s difficulty from 2013 to present. Source: Coin Warz.

An increase in difficulty is largely an indicator of a strong and growing network, suggesting the return of overall confidence in the market; however, this still comes at a price for miners who have to spend more resources to generate the same amount of coins as before.

Disclaimer

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment or other advice.

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