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Crypto Market Gains $15 Billion in 4 Days But Analyst Says Bitcoin Not Ready For $4,000

Last Updated March 4, 2021 2:53 PM
Joseph Young
Last Updated March 4, 2021 2:53 PM

Since February 17, within 4 days, the valuation of the crypto market has increased from $120 billion to $135 billion, by $15 billion.

Crypto assets that have outperformed both Bitcoin and the U.S. dollar throughout February in the likes of EOS and Litecoin recorded 4 to 6 percent gains in the past 24 hours, showing strong momentum.

Litecoin Surges by More Than 50% in 3 Weeks, Source: TradingView

Litecoin, in particular, demonstrated a spectacular rally from $33 to $50, gaining 51.5 percent in less than three weeks.

However, a technical analyst with an online alias “The Crypto Dog” remains unconvinced that Bitcoin will initiate a large upside movement above $4,000 in the near-term.

Despite Crypto Market Momentum, Bitcoin Investors are Patient

Fundamentals of most major crypto assets have strengthened throughout 2019 in spite of the 85 percent decline in the valuation of the crypto market.

Some of the world’s largest financial institutions and technology conglomerates such as Fidelity, Nasdaq, ICE, and Samsung have started to build an infrastructure supporting the asset class.

On February 20, in San Francisco, Samsung officially announced the integration of crypto private key storage support on its flagship Galaxy S10. The move could expose cryptocurrencies to the mainstream in a magnitude previously unseen.

However, technical indicators generally point toward a minor retrace in the price of Bitcoin in the short-term following a rapid movement from mid-$3,000 to $4,000.

The analyst said that expecting the value of BTC to rise substantially in the $3,900 to $4,000 range could be risky.

He explained:

Potential bull pennant. I’m not trying to fade it, but not in a leveraged position either. If we break down 3,800 is the first major support and it may hold, but for now I’m just holding spot waiting for a long closer to $3,720.

This is starting to look and feel like ETH circa Jan 5. It could pump, sure, but I personally don’t want to long $39XX.

As Bitcoin demonstrates stability in a tight range near $4,000, small market cap crypto assets and tokens have started to regain momentum.

Tokens like ICON, Ontology, and Aelf recorded 5 to 15 percent gains against the USD on the day.

Overall, the many traders and technical analyst foresee the brutal bear market of cryptocurrencies coming to an end in the mid-term.

But, traders are cautious in expecting any strong upside rally in the upcoming months, projecting the cryptocurrency market to begin recovering from the 14-month correction by the end of the second quarter of 2019.

Sentiment is Improving

During corrections, especially amidst extended bear markets, low market cap and liquidity assets tend to struggle as investors reallocate their funds to alternatives such as Bitcoin, stablecoins, and exchanges.

The abrupt rise in the value of tokens in the past several weeks show that the sentiment in the crypto market is gradually improving.

The volume of the cryptocurrency market has substantially risen to above $29 billion and the daily volume of Bitcoin, which hovered at around $4 billion, has doubled to over $8 billion.

The trading activity in the global cryptocurrency exchange market has noticeably increased since the beginning of February, as the interest in the asset class rose in recent weeks.

The interest in the cryptocurrency sector is expected to increase over time with high-profile product launches such as Samsung’s crypto private key storage.

One digital asset researcher stated that the impact of Samsung Galaxy S10’s new feature could be larger than any other fundamental factor including Bakkt’s Bitcoin futures market launch.

“Twitter has 326 million active monthly users and Samsung shipped 70 million units In Q4 2018 alone. Tippin.me and the new Galaxy smartphones will do more for bitcoin adoption than @Bakkt and all the ETF’s in the pipeline combined,” the researcher said.