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Bitcoin Price Briefly Hits $8,400 and Cardano Surges 11% as Market Recovers

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

Earlier today, on April 16, the bitcoin price briefly remained above the $8,450 mark after recording a massive buy volume across major cryptocurrency exchanges. Cardano has surged by 11 percent as the second-best performer of the day and the market has come back to the $300 billion region.

Independent Movements

Throughout 2018, the vast majority of cryptocurrencies have followed the price trend of bitcoin amidst periods of extreme volatility. Cryptocurrencies with small market caps in comparison to bitcoin generally performed poorly against bitcoin, and the most dominant cryptocurrency in the market ended up becoming one of the best performing cryptocurrencies year-to-date.

Analysts have attributed the poor performance of altcoins like Cardano to the rising demand for bitcoin from investors that perceive it as a safe haven asset within the global market, which is understandable given that although it is volatile, it has the highest liquidity, deepest market, and the largest number of users.

When investors feel uncertain about the future and are concerned regarding the short-term trend of the market, both daytraders and long-term traders tend not to allocate their funds in assets that are highly volatile and risky. As such, over a period of four months starting in January, the market has seen major cryptocurrencies like bitcoin and Ethereum generally perform better than small cap cryptocurrencies.

Recently, traders and investors have become more ambitious and confident in their calls, and have started to acquire more small cap cryptocurrencies as well as other major cryptocurrencies outside of bitcoin and Ethereum. The independent movement of cryptocurrencies and the unwillingness of traders to match the price trend of bitcoin signify stability in the market, and demonstrate that the market is beginning to recover.

Over the past 24 hours, the price of Cardano (ADA), a proof-of-stake smart contracts blockchain protocol designed to service large decentralized applications with flexibility and efficiency, rose by more than 12 percent against the US dollar and 13 percent against bitcoin. The price of ICON (ICX), better known as South Korea’s Ethereum, also recorded significant gains against both the US dollar and bitcoin.

Bitcoin Trend

Last week, the bitcoin price spiked from $6,900 to $8,000 within a 30-minute period. Traders feared an immediate correction to occur, as a massive buy volume was recorded abruptly that was unexpected to most. However, contrary to the predictions of analysts, the bitcoin price remained strong for many days ahead, and eventually rose to $8,450. Within 7 days, the price of bitcoin went from $6,900 to $8,450.

Given the abrupt surge in the bitcoin price, it is healthy that it recorded a minor drop over the past 24 hours, to ensure that the market has not overbought bitcoin. Two momentum oscillators the Relative Strength Index (RSI) and Williams’ Percent Range (WPR) show that bitcoin is still not oversold at the current rate.

It is possible for the price of bitcoin to rise to the $9,000 range in the near future, if it can hold up the $8,400 level throughout the next few days. Traders are anticipating another short-term rally to recover yesterday’s losses.

Featured image from Shutterstock.