By CCN.com: In the past 24 hours, the bitcoin price fell 2.16 percent against the U.S. dollar from over $5,600 to $5,422 as the crypto market slightly retraced.
The valuation of the crypto market fell from $181 billion to $176 billion, by more than $5 billion on a single day.
As the bitcoin price dropped by 2.16 percent, other major cryptocurrencies like bitcoin, ethereum, ripple (XRP), and EOS recorded losses in the range of 2 to 6 percent, demonstrating sideways action.
By next month, if bitcoin continues to surpass key resistance levels above $6,000 and stabilizes at a high level, traders expect the so-called “altcoin season” to emerge.
Altcoin season, can it happen?
Normally, in the crypto market, the altcoin market makes large moves when bitcoin is engaging in sideways price action or is stable in a tight price range.
While it does not necessarily mean that new capital is being injected into the altcoin market, it suggests that at least existing investors in the crypto market are becoming more comfortable with riskier bets on the market.
In May, in anticipation of the block reward halving of bitcoin, the dominant cryptocurrency is expected to regain some of the momentum it has lost throughout the past six months.
Although bitcoin has recovered to the $5,000 region which on a technical perspective relieved significant pressure on the asset, it is yet to even rebound to 2018 quarter 4 levels until it surpasses the $6,000 mark.
The altcoin market is likely to see a boost in capital inflow and confidence from investors only if bitcoin sees a strong upside movement and stabilizes above crucial resistance levels.
Already, as said by technical analyst Hsaka, the altcoin market on key exchanges like BitMEX has seen resistance levels broken in recent weeks.
“All BitMEX altcoins have blown past their respective resistance level prior to their April breakouts, except for BCH. I expect it to follow suit soon,” the analyst said.
Some Traders Still See Risk
According to a trader known to the community as “The Crypto Dog,” the trader hedged the majority of his portfolio to Tether, a stablecoin pegged to the value of the U.S. dollar on a 1:1 ratio, expressing his cautious optimism towards the market.
“Rug pull senses tingling. I managed to make it here up in $BTC, up in $USD. Going to keep it that way – tethering ~75% of my $crypto holdings. Playing with the rest. Maybe I get left behind, but I don’t think so,” the trader said.
Currently, the real daily spot volume of the bitcoin market is estimated to be around $580 million, which is still up 2-fold since the first week of March when Bitwise Asset Managed calculated the volume of bitcoin to be around $270 million.
Considering that 95 percent of the reported volume of the crypto market is said to be faked or inflated, the overall volume of the crypto market is an indicator that is of less importance to analysts.
But, the clear increase in the real volume of bitcoin indicates a noticeable increase in interest in the asset class in a period of one month.
Last modified: March 4, 2021 2:44 PM