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Bitcoin Back to $8,250, Ethereum and ERC20 Tokens Secure Momentum

Last Updated March 4, 2021 5:06 PM
Joseph Young
Last Updated March 4, 2021 5:06 PM

Alternative cryptocurrencies (altcoins) and Ethereum have outperformed bitcoin over the past 24 hours, the most dominant cryptocurrency in the market, over the past two weeks. The valuation of the cryptocurrency market has rebounded to $346 billion, moving closer to the $400 billion region.

Altcoin Season

In periods of extreme volatility and uncertainty, investors tend to incline towards an asset or cryptocurrency with the deepest liquidity and stability. Subsequent to the occurences of two major corrections in January and February which sent the valuation of the cryptocurrency market from $816 billion to $240 billion, investors heavily leaned towards bitcoin as a safe haven asset and as a result, bitcoin consistently outperformed altcoins throughout 2018.

Recently, altcoins have begun to record strong gains against bitcoin and the market started to demonstrate independent price movements. Instead of following the overall price trend of bitcoin, many cryptocurrencies began to move differently from bitcoin.

This week, ERC20 tokens such as Tron (TRX), 0x, and ICON (ICX) performed well against both bitcoin and Ethereum. The increasing value of ERC20 tokens and the rising demand from investors in the global cryptocurrency market for minor cryptocurrencies show that investors have started to take more risks and have become confident in the market.

Saxo Bank, a Danish investment bank that focuses in online trading and investment, stated in a recent report that it expects the inflow of institutional capital into the cryptocurrency market to lead to a surge in the price of the vast majority of cryptocurrencies.

“If there is a significant pullback in the equity markets, there will be an inflow of money into uncorrelated assets, or assets that lie outside the reach of the traditional financial system in which cryptocurrencies are a potential alternative. The inflow of institutional capital to the cryptocurrency market due to the increase in regulation and investor protection could lead cryptocurrencies to a positive quarter,” the 2018 second quarter report of Saxo Bank read. 

Bitcoin Back to $8,250

Over the past 24 hours, the bitcoin price has recorded a solid 3 percent increase from around $8,000 to $8,250. On April 18, the bitcoin price dipped below $7,900 to $7,810. But, it almost immediately rebounded with a relatively large spike in buy volumes across all major cryptocurrency exchanges.

Currently, the Relative Strength Index (RSI) remains in the 56 mark, which signifies a neutral zone. Bitcoin is neither oversold or overbought, which is usually an optimistic indicator of short-term growth. Both exponential and simple moving averages demonstrate buy signals and suggest that the bitcoin price will likely record a rally throughout April 19.

As noted by Saxo Bank, the sudden increase in demand for bitcoin from institutional investors and retail traders cannot be dismissed, because major banks like Barclays have revealed their plans to set up cryptocurrency trading desks in the future. The entrance of large financial institutions show that the demand from institutional investors is real and that it is increasing at a rapid rate.