In the last 24 hours, the Bitcoin price has slightly dropped from $3,860 to $3,770, struggling to demonstrate strength at the $4,000 resistance level.
Despite the lack of momentum on the price trend of Bitcoin, several crypto tokens in the likes of Binance Coin (BNB) and Enjin Coin (ENJ) have recorded 15 percent gains against the U.S. dollar and BTC.
Speaking to CCN.com, a cryptocurrency trader known as “Satoshi, MBA” said that the strength of tokens and small market cap cryptocurrencies show the overall bullish trend of Bitcoin.
Why the Performance of Crypto Tokens is Crucial For Bitcoin
Historically, most tokens and small market cap cryptocurrencies have tended to record intensified losses in the direction headed by BTC.
When Bitcoin records a minor loss, tokens tend to record intensified losses against the USD and when the dominant cryptocurrency rises in price, tokens demonstrate large gains on the upside.
However, in the past 24 hours, while Bitcoin recorded a minor drop of around 2 percent, a handful of tokens recorded gains in the 10 to 20 percent range.
BNB, for instance, has become the 8th most valuable cryptocurrency in the global market, overtaking Stellar and TRON.
Within a 7-day span, the price of BNB surged from $9.5 to $13.4, by more than 41 percent against both Bitcoin and the USD.
The resilience demonstrated by tokens and the stronger hand of investors playing with higher-risk trades suggests that investors have become more confident in the short-term trend of the crypto market.
The analyst told CCN.com:
Yes, I would say the sentiment is still overall bullish, we’re near the end of the bear market. Whether we drop some in the short term, I don’t think it changes the overall picture.
The way back to all time highs won’t be straight line. We’ll have bumps along the way. This BTC sideways movement will be very bullish for alt coins too.
Throughout the past week, Bitcoin recorded a relatively large pullback following an extensive period of stability.
The abrupt downward movement of BTC had minimal impact on the price trend of tokens and crypto assets that recorded 40 to 150 percent gains have been able to maintain their momentum.
Ultimately, the willingness of investors to take high-risk, high-return trades could prevent BTC from potentially testing new lows in the low $3,000 region and gradually climb upwards from the tight $3,300 to $4,000 price range.
“Most coins have very bullish set ups right now, virtually all of them sitting on annual support. When BTC moves sideways, liquidity will move into alts. Recently we’ve seen huge moves, 40%, 80%, even 150% overnight gains by some alternative cryptocurrencies,” the analyst added.
Traders Expect Bitcoin Bounce
In the upcoming days, traders generally foresee BTC rebounding to the high $3,000 region once again after its downside movement was stopped at the $3,700 mark.
The sentiment in the cryptocurrency industry has improved in recent weeks with reports suggesting that Starbucks is set to integrate Bitcoin payments in the next 18 months as a part of its deal with Bakkt.
“Interesting. But probably well worth it on the long term. The Starbucks angle was the most interesting thing about the Bakkt announcement. BTC needs more use cases and more retail adoption,” fintech analyst Richard Johnson said.
With a growing number of financial institutions committing to the cryptocurrency sector and more investors willing to engage in higher-risk trades, traders expect an upside movement in crypto markets in the upcoming days.
Last modified: March 4, 2021 3:18 PM