The second quarter of 2020 has been extremely tumultuous. Bitcoin and the rest of the crypto market initially put their right foot on the gas and the market exploded. According to data provided by Binance Research, BTC USD was up by 42% in Q2 2020, making it one of the best quarters in recent coin history.
Other altcoins were also able to take advantage of the rally, with the likes of Ethereum, Bitcoin , and Litecoin sustaining significant gains. Correlations between the various crypto assets had also remained high in the charts, but slightly lower compared to Q1. The 90-day rolling correlation between the S&P 500 and the BTC was positive. But its influence decreased dramatically after mid-June.
Despite major positive moves by BTC USD, Binance’s report noted that it was crucial to note that almost all of BTC USD’s gains came in the first 45 days of the quarter. Referring to it as a “Kangaroo market,” the market environment was divided between the period when prices were going up and the period when prices were falling.
Now, although many supporters have liked to believe that current market stagnation and decline is due to recent market inactivity, the above data may suggest that Q2 2020 was not entirely positive.
Did Bitcoin ‘s current bearish picture start after mid-May?
Let us have some of the facts right. BTC USD’s last high occurred at the end of May when Bitcoin reached $10,250. From here on, the asset’s inability to breach $10,000 was rightly questioned, but the reason is that Bitcoin cash was halved on 11 May. Casual viewers hoped for a bullish rally right after the halving, but it has historically been identified that the BTC usually follows a prolonged correction for the first 6 months after the halving.
It is therefore not inaccurate to state that Bitcoin’s 42 percent positive return in Q2 2020 was down to the hype of the pre-halving. After the halving has been completed, Bitcoin cash is now following its historic past, and the underlying bearish trail is something that was triggered in the midst of Bitcoin’s bullish Q2 period.
Ethereum performed better in Q2 than BTC USD
The report further added that amidst Bitcoin’s stronghold, Ethereum consistently out-marched BTC with a quarterly return of approximately 70 percent in the charts. Major factors behind ETH’s rally has been down to the growth of DeFi and the anticipation surrounding Ethereum 2.0.
Now, with the commencement of Q3 2020, it will be interesting to see the development of the crypto market over the next three months; whether the bearish grip is broken towards the end of the year or not.