The price of Bitcoin (BTC) surpassed $34,700 to achieve a new best loftier after a strong overnight rally. Ether (ETH), the native cryptocurrency of the Ethereum blockchain, also surpassed $800 for the first time since May 2018.

Bitcoin's sudden rally comes every bit a surprise considering it corrected sharply to around $30,300 on January. 2. Within 24 hours, BTC rose from $30,300 to as loftier equally $34,778, a 14% rebound.

BTC/USD hourly candle chart (Bitstamp)

What triggered the Bitcoin and Ethereum rally?

When the price of Bitcoin surpassed $33,000 on Jan. 2, some whales and high-cyberspace-worth investors warned that a 150 BTC sell order could retrace the marketplace.

A pseudonymous Bitcoin trader known as "i.am.nomad" wrote:

"A 150 btc market sell would retrace this whole thing. lmao the college price goes, the more retail gets prices out, the lower bid support volition be."

Within hours he pinpointed the risk of a Bitcoin correction due to sparse order books, BTC sharply pulled back.

However, Bitcoin recovered apace after the initial drop, rallying to a new tape-high within 24 hours.

The main catalysts behind Bitcoin's rally have been the institutional aggregating of BTC on Coinbase and the short clasp on Binance Futures.

Throughout the by three days, Bitcoin has been trading much higher on Coinbase than on other major exchanges, as Cointelegraph reported.

This means that aggressive buyers on Coinbase were continuously accumulating BTC despite the premium.

Bitcoin surpasses past $34K with average trader returns at highs. Source: Santiment

In the meantime, many traders on Binance Futures were shorting BTC, possibly expecting Bitcoin to elevation out at around $thirty,000. When Coinbase buyers connected to push BTC upwards, a short squeeze occurred. Analysts at Santiment explained:

"For those expecting a #Bitcoin correction to kick off 2021, the $34,000 #AllTimeHigh achieved ten mins ago is showing how painful it's been being a $BTC bear the past 10 months. Avg. trader returns haven't been this high beyond the board since June 2019."

Ether cost rallied off of Bitcoin's strong technical momentum. ETH/USD rose past $800 for the first time since early on May 2018, demonstrating renewed momentum afterwards stagnating throughout December.

A pseudonymous cryptocurrency trader known as "Mayne" said on Jan. two earlier the Ether rally that ETH is likely heading to $800. He said:

"ETH thesis still on track, daily close thru $620 nosotros'd head to $800. I built a large long position in December and assuming $ETHBTC can concord a higher low, I think it'll play out nicely. I should have had more BTC long exposure vs ETH in December, hoping ETH outperform for Jan."

What happens side by side?

Ethereum has another major catalyst on the horizon as the CME futures exchange plans to launch ETH futures in Feb.

Considering the high level of institutional demand for Bitcoin since the beginning quarter of 2020, the need could also boost Ether upon the listing.

Google searches for "Bitcoin." Source: Google Trends

Meanwhile, Bitcoin remains on an upward trajectory of price discovery, striking new record highs on a daily ground. With a purported supply shortage and an institutional buying frenzy now spilling over into retail, the rally may still have a lot more room to run with $35,000 likely existence the next psychological level to break.

As Cointelegraph reported, half dozen-figure predictions take go increasingly common in recent months, particularly every bit the rally has broken new all-fourth dimension highs.