ICON (ICX) and WanChain (WAN) have recorded massive 23 percent gains again in the past 24 hours, becoming the two best performing assets in the global crypto market for two days straight.
The valuation of the crypto market increased from $213 billion to $214 billion on August 27 as some major cryptocurrencies like EOS and IOTA saw fairly large gains in the range of 4 to 15 percent.
Throughout the past week, despite the strong performance of the crypto market, analysts expressed their concerns regarding the decline in the volume in major digital assets. Specifically, the volume of Bitcoin, which hovered around $4.5 billion last week, has fallen below $3.5 billion.
Ethereum, EOS, Ripple, Bitcoin Cash, and other major cryptocurrencies have also seen a large drop in their daily trading volume. Most notably, Ether, whose volume surpassed $2 billion last week, has dropped to $1.3 billion.
Meanwhile, the volume of Tether (USDT), a stablecoin pegged to the value of the US dollar, has increased from $1.5 billion to $2 billion, suggesting that a large portion of investors are still relying on USDT to hedge the value of their cryptocurrencies.
As such, as some traders have suggested, it is more likely for Bitcoin to drop from the $6,700 mark than break out of the $6,850 resistance level. If the volume of Bitcoin had been higher in the $4.5 billion region, the same trend would have signaled a short-term surge in the price of Bitcoin.
“Barring the price action ambiguity surrounding London open, BTC looks prime for a drop, maybe a wick above $6,771 is possible. There has been a healthy distribution (wyckoff cycle) over the past few days every time BTC was above $6,700. Next couple of days would be interesting,” one trader known as Crypto Brahma said.
Throughout August, tokens have heavily depended on the performance of Bitcoin. Traditionally, tokens have replicated the price trend of Ethereum and EOS with intensified movements on the upside but due to the lack of momentum in Ether, tokens have relied on the price movement of Bitcoin.
If the Bitcoin price fails to sustain momentum at the $6,700 mark which is likely due to its low volume, it is highly likely for tokens to drop against Bitcoin in the next 24 hours.
Even if the Bitcoin price remains stable in this price range, given the massive gains demonstrated by tokens against Bitcoin, Ethereum, and the US dollar, a minor retraction is due.
But, some tokens like ICON, Ontology, and WanChain, which have seen a spike in their volume with ICON’s daily trading volume on Binance rising from 800 BTC to 5,000 BTC within a two-day period, may require the price of Bitcoin to fall by at least 2 to 3 percent in order to see a trend reversal and drop to their previous lows.
Featured image from Shutterstock. Charts from TradingView.
Last modified: March 4, 2021 3:34 PM