Range-bound Bitcoin price opens the door for altcoins to move higher
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After a long period of relative stability, Bitcoin’s price began rising last week. At the time of writing, the largest cryptocurrency by market cap is trading at $6,749.40, up nearly 10% from its low at $6,152.20 seen last Thursday. While the price of Bitcoin has not broken any important resistance levels yet, the fact that the price of Bitcoin is once again moving in one direction is certainly positive for the future of cryptocurrencies. Blog Post: https://blog.bitbay.net/range-bound-bitcoin-price-opens-the-door-for-altcoins-to-move-higher-a734e9e385a
The bitcoin price has been largely range-bound over the last few weeks, which means that the price is moving up and down, but is remaining in the same relatively narrow price range. This price action is often a way for the market to digest news or to test a support or resistance point. For example, if bitcoin prices are moving up and touch a new resistance point, this action may cause the price to go down to test the support level before the price moves higher again.
Ether (ETH) took the lead at the start of the new month, with the second largest cryptocurrency by market cap reaching a new all-time high of $3,338. As a result, many analysts are calling for a new altcoin season to begin. Meanwhile, the price of bitcoin (BTC) continues to experience resistance in the $56,000-$58,000 range.
Data from Cointelegraph Markets and TradingView shows that from its low of $2,160 on April 25, the price of Ether rose 54% to a new high of $3,324 on April 3. May saw a 12% spike on Monday, pushing the altcoin past $3,300 for the first time in its history.
Chart 4 hours ETH/USDT. Source: TradingView
While the majority of crypto traders celebrate the breakthrough of the Ether price, which helped elevate co-founder Vitalik Buterin in the crypto-billionaire club, bearish traders are poised to suffer heavy losses, as almost all of the 76,000 put option contracts sold on the 7th are now closed. expiring in April, will become worthless if the price of Ether manages to stay above $3,100
And it’s not just the Aether that’s been doing well lately. Over the past two months, the entire altcoin market has seen a 119% increase in value, setting a new level of support for the 2017 high.
Ether HODL Tariff increase
According to Glassnode, an on-chain analytics company, the amount of Ether held long-term has increased since the end of 2020, which could be a factor behind the multi-month rally.
Ethereum HODL Waves. Source: Glassnode
The chart above showing Ethereum’s HODL waves shows that since the end of 2020, coins appear to range in age from 1 month to over 6 months (blue arrows), with the proportion of coins aged between 1 month and 6 months getting fatter, suggesting that HODL of coins accumulated at the beginning of the bull market remains a preferred strategy.
Glassnode also pointed out that a large amount of Ether has been withdrawn from wallets in 2021, with 10 cases of withdrawals of more than 200k Ether per day in just 4 months, as institutional demand and the use of decentralized finance (DeFi) increases.
Ethereum offerings in smart contracts versus balances on exchanges. Source: Glassnode
As seen in the chart above, the amount of Ether held on exchanges has declined since September 2020, coinciding with a notable increase in the amount of Ether held in decentralized financial smart contracts.
Currently, the amount of Ether allocated to smart contracts exceeds the amount held in the exchanges’ central reserves.
Altcoins are outperforming bitcoin for now
While bitcoin is still struggling to reach a daily close above $58,000, altcoins continue to make a strong case for an emerging alt season.
Daily development of the cryptocurrency market. Source: Coin360
Waves (WAVES) was the star of the day, rising 41% to a record high of $36.41. Ethereum Classic (ETC) also rose 15% to a new all-time high of $50.90.
After rising 17.84% to $5,777 in the past 24 hours, Maker (MKR) now ranks number one among decentralized funding protocols (DeFi) with a total blockchain value of $10.92 trillion.
The total cryptocurrency market is now $2.29 trillion and bitcoin’s share is 46.6%.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph.com. Every investment and every transaction involves risk. So you need to do your own research before making a decision.
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Frequently Asked Questions
How does Bitcoin price affect Altcoins?
Bitcoin is a term that is becoming more and more familiar to people as the years go by. It is a very important part of the economy to many people, as it is a digital currency that is not affected by country borders and it is one of the only ways that people can receive their paychecks from some companies. Bitcoin price is also the most important factor for the cryptocurrency market as a whole, since it is the most popular cryptocurrency. (Note: This one is a bit tricky, as the blog title uses the word “affect” instead of “effect”. Though hopefully you did not need me to tell you that.) There are a lot of reasons to believe that the recent rise in the price of Bitcoin is going to be beneficial for some of the less well-known cryptocurrency alternatives to the digital currency that has taken the world by storm. It is true that the technology that Bitcoin is built on top of is capable of much more than just allowing people to buy and sell goods and services. Even so, there is no question that the rise in the price of Bitcoin, which is now the most expensive cryptocurrency by market cap, has given the entire crypto space a big boost.
Do Altcoins go up when Bitcoin goes up?
If you’ve seen the bitcoin price go up and wonder if the altcoin market will follow, you’re in good company. But before you start buying altcoins if you don’t already have some, you might want to consider the reasons behind the rise in value of the first cryptoasset. You see, bitcoin and its peers use blockchain technology. This is a decentralized network that doesn’t rely on a central authority or institution to be the gatekeeper for all transactions. So, while the bitcoin price is important because of the attention it brings to all cryptoassets, it doesn’t necessarily tell you how other coins will act. Indeed, the altcoin market is much more volatile than is bitcoin, and prices of individual coins rise and fall for The crypto markets are up across the board today, and everyone is asking: “Are altcoins going along for the ride?” As is often the case, it’s more complicated than that. That’s because even though altcoins tend to follow Bitcoin’s lead, they don’t always move in lockstep. In fact, the correlation between the number one and number two coins by market capitalization can vary greatly from day to day, and even hour to hour.
Why do Altcoins drop when Bitcoin Rises?
The last few weeks have been a wild ride for cryptocurrency traders, and especially for altcoin holders. Bitcoin, the world’s most valuable cryptocurrency, has once again soared to new heights, increasing in value over $600 in just the past three weeks. (In fact, some predict that Bitcoin may even reach $100,000 in value by 2021.) But that hasn’t been the only good news: investors have been pouring money into altcoins as well, causing some of them to skyrocket in value. According to coinmarketcap.com, the overall cryptocurrency market cap is now over $170 billion, and that number is growing every day. Altcoins are defined as crypto-coins that are not Bitcoin. Bitcoin is the most dominant coin in the crypto-currency market. It is the coin to which all other altcoins are compared to and is the standard in the crypto market. Since Bitcoin has been on an upward trend since December of last year from $200 to $1200 it is natural that other altcoins would follow suit, but the opposite has happened.
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