Bitcoin (BTC) Shoots to $44K, Drives Altcoin Rallies
Bitcoin (BTC) shot up above $44,000 late on Tuesday and kept most of the recent gains, in another short-term unpredictable rally. BTC’s expansion arrived fast, also suggesting the rally may be the result of attacking short positions and causing a short squeeze to a higher tier.
The Crypto Fear and Greed Index stalled at 46 points, almost pointing to a neutral sentiment. But in the past days, BTC has sparked fast recoveries for almost all altcoins and tokens. At one points, BTC extended its gains above $44,153.40, while helping push Ethereum (ETH) above $3,100 once again.
BTC Supply Drain Continues
One of the big trends for BTC is more coins being taken off exchanges. There are also signs of what looks like “whale” buying of significant BTC holdings.
With more stablecoins and altcoins flowing in, precious BTC is held closely as a means to send out significant sums. BTC remains harder to trace and connect to an identity if kept off exchanges.
However, spot trading is only part of the story, as most volumes still center around derivatives.
On Tuesday, total liquidations were above $126M, of which the biggest liquidation on the BTCUSD pairing for $2M. Predominant liquidations reached short positions, with 86.39% short liquidations on OKExe.
Bear Market Still Finds Supporters
The potential for a bear market or at least a surprising year still ahead is present on the market. One of the influential social media investors, Mr. Whale, turned bearish on BTC and views recoveries with skepticism.
However, even pessimistic takes cannot prevent short-term, dramatic price moves. Over the past week, the Tether (USDT) supply indeed expanded, from just under 78B to around 78.5B with several tranches sent to exchanges.
There is no way to predict USDT prints, but this time, they arrived in time to cause the rally starting at around $42,000. There are also signs USDT is arriving on exchanges, potentially boosting short-term trades.
A similar tranche of USDT was noted to land on the Binance exchange, which carries one of the most active BTC/USDT trading pairs.
Once again, trading action remains focused on BTC. The leading coin expanded its dominance to 42.2%, while other asset classes remained stagnant or slid more.
Is ETH Still Riskier
ETH continues to be the focus of much skepticism. One of the negative effects is the network is not expected to launch its ETH 2.0 version by the end of the year. At the same time, the preliminary smart contract for ETH 2.0 has invited users to pledge more than 9M ETH, which cannot be taken out of the smart contract for now.
At the same time, the Ethereum burn continues with a fast pace, soon to exceed 2M ETH since August 2021. The Ethereum network still brings in relatively high fees for miners, while destroying a part of the coins.
Coin Pumps Still Happening
Despite the lowered volumes, there are coins that manage to recover fast. Other assets also manage short-term appreciation. The latest rally among tokens was Decentraland (MANA). This asset represents a digital land with tradable metaverse locations.
MANA rose to $3.18, adding more than 10% in a day, after bouncing from lows around $2.70. The recent rally was caused by news of JP Morgan opening a virtual bank represented in the Decentraland metaverse. After years of skepticism about cryptocurrency, the investment bank finally adopted the potential of blockchain projects.
Decentraland is driving the trade of NFTs, which represent land in the metaverse. Decentraland plots retail at 4.65 ETH at the cheapest.
Decentraland has already invited corporations like Samsing and Miller Lite, which added their designs to the metaverse. The interest in the project continues to put MANA as the most valuable token in play-to-earn gaming and metaverse blockchain projects.
XRP: Another Chance for $1
XRP returned to $0.82, with another potential shot at reaching $1 by the end of the month. XRP is one of the assets lagging behind the recent bull market. After the end of Q1, XRP may have the potential for a relisting on US-based exchanges and brokerages, returning to higher valuations. XRP predictions see the asset move up to $3, repeating its all-time highs from 2018.
XRP was left behind as interest switched to DeFi and later, to non-fungible tokens (NFTs) and blockchain gaming startups. Ripple continues to offer its solution to cross-border remittances using a decentralized system, capable of competing with the SWIFT interbank network. There are still doubts about the utility of XRP, though, as sending money through Ripple’s fintech solutions does not really require XRP.
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This is a specific digital coin running on a series of servers. XRP promises utility in handling cross-border transactions to compete with the SWIFT interbank payment system. Being controlled by banks, many question if it is a true cryptocurrency.