The Bitcoin price rally keeps moving forward, and it’s nothing short of spectacular. Over the weekend, the cryptocurrency went as far up as USD 7.355,00, which is equivalent to a 14% increase in spot prices. After reaching that peak, it went back to the 7,1k level and spent some time trading sideways, but it rallied again and, as we write this it’s worth $8022. The total market capitalization stands at $142,009,729,271. So after 18 months talking about underperformance, analysts are now starting to say (as in 2017) that the market is overdoing it.
At the same time, we’re all seeing how the dark clouds assemble above the otherwise sunny world economy. Geopolitics is getting complicated with North Korea’s saber-rattling, the China-US trading talks stalled, the US still stuck in Iraq and Afghanistan, Iran, Brexit with no deal.
It’s the kind of scenario in which conventional investors look for financial safe havens as they prepare for fiat currencies to plummet. Gold and silver are the usual choices. But it now seems that Bitcoin could pick up that role even if doubters and gainsayers (think Nouriel Roubini, the economist known as Dr. Doom) are still doubting and gainsaying.
Maybe Mr. Rubini bemoans now the evidence he’s left behind in the digital world that shows how wrong he’s was on last November when he tweeted that:
Is this just steam-release or a genuine take-off?
The market is rising spectacularly; there’s no doubt about that. It’s been green for more than a month, and BTC is just about to double in value in only five weeks. So the question now is: how authentic is the current bonanza? Is it just something of a market anomaly or the sign that the long-awaited crypto summer is here already? In the words of Peter Brandt (famous trader) is this a “lift-off in real or blow-off”?
There is a substantial fear that the current progress could have its origins in investors squaring their short positions. That could be enough to explain the current chart behavior, but the effect would dissolve as the price keeps rising. Stalling would be in the cards in that case.
Is consolidation around the corner?
Whatever the reason for the current market status is, a consolidation period is about to arrive.
Thomas Lee, of Fundstrat, evokes Bitcoin’s history to make us recall that good days in Bitcoin are not all that frequent. Bitcoin’s performance in a full year, he warns us, usually come down to the coin’s behavior in only ten critical days.
His tweet reads:
The New York Blockchain Week is about to start. And today (Monday) the mainstream media is bound to notice Bitcoin’s performance over the weekend and spill quite a bit of ink over it. So with all the additional attention, chances are that the current parabola is not done yet. But the consolidation is about to arrive anyway.
“Should we rename Blockchain Week to Bitcoin Week?” asked Tyler Winklevoss (hopefully, rhetorically) in his Twitter.
FOMO comes at 10k
And now the question is, when can we think that FOMO is here already?
Mr. Lee’s guess is at USD 10.000,00 “My SWAG [scientific wild-assed guess] is $10,000 is the price that causes FOMO from those who saw #bitcoin as dead forever.” It seems appropriate for the bunch of guys “who gloated about 90% crash” as Lee mentioned. But it’s already happening for some others.
Those who got a piece of the action but got scared off quickly can choose from a variety of mobile apps and get their hands on some BTC, BCH, ETH, LTC, ETC or XPR in a heartbeat.
A new US equity research paper that covers blockchain and cryptocurrencies authored by Canaccord Genuity (an investment bank) estimates 2021 to be the year in which Bitcoin could go back to its past peak value.
The choice of that price target is arbitrary, and it’s somehow meaningless except for one thing: it’s a high price which implies that analysts think that the new and long-awaited bullish run is here already.
The bank explains its posture on Bitcoin using the coin’s improved fundamentals as the basis for its conclusions. Transaction value, for instance, went from 478 million USD in February to 801 million USD as May started. The bank also notes that the new Segregated Witness (SegWit) soft fork in Bitcoin (which is a kind of upgrade for the network aiming to compensate for some of the protocol’s restrictions) is now being used by about 36% of the transactions thus improving overall network performance.
The rise of the altcoins
Bitcoin remains the market’s most important cryptocurrency, and that’s not going to change very soon or very quickly. It dominates the crypto verse at the tune of 58.7%, so it accounts for the majority of the activity in crypto. But some alternative currencies are becoming more relevant, and they shouldn’t be ignored.
Among those cryptocurrencies, Bitcoin Cash is the one growing the most so far. Its success has to do with the failure of Bitcoin SV after both projects forked out (courtesy of Craig Wright) but also with the link it has with Bitcoin as a brand. It’s trading at USD 391,63 as we write this, which means it’s gone up by 10.38% for the last 24 hours.
Litecoin (LTC), created by former Google engineer Charlie Lee, is back into good form and it’s the second-best performer so far. It’s getting close to that all-important psychological USD 100,00 mark. The mark also happens to be the coin’s second Fibonacci resistance level for monthly trading so if it should reach it could take off. It currently trades with green numbers (4.30%) at USD 89.74.
Cardano is doing well too. Ranked at 10th by market capitalization is not the digital asset everybody is talking about but it gained 16% over the weekend and, today, it’s still trading in green at 5.85%.
Even Ethereum is doing well. It’s beyond USD 200 now and also in the green zone at 6.75%. This is an asset that’s lost a lot of appeal for many cryptonauts, but it is still the world’s second by market capitalization.
Of course, you should never ignore Ripple’s XRP. It’s the coin for all seasons as it was the market’s best performer in 2017 (year of wonders) and 2018 (year of the catastrophe). It’s not doing as well as most of the market, which is rare for XRP, but it’s still going up, trading at USD 0.327056.
Every coin in the top 20 is rising firmly.
And there’s even been room for some nearly miraculous behaviors. BuckHatCoin (BHIG), for instance, rendered 696% in a single day during the weekend.
So the crypto verse is doing great. Almost every coin is rising, and some of the ugly ducklings in the market are becoming beautiful swans, at least for the time being.
In short, the entire crypto market is on a roll, with Bitcoin and Ripple’s XRP leading the way among the top 20 at the time of writing this article (XRP is up by more than 19% in the last twenty-four hours). As things stand, it looks like the institutional money has entered the market, and it seems it’s merely the beginning. Consequently, the current Bitcoin rally looks real.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.