Bitcoin (BTC) Turns Volatile, Boosts Altcoins
Bitcoin (BTC) performed several feats in the new week, briefly reclaiming $47,000 on Tuesday. On a volatile day, the leading coin moved between lows near $45,000 and held above $46,000 for most of the day. After turning Q1 in the green, BTC is now slightly up year on year.
BTC traded at $45,411.51 after stepping back on Wednesday, making the price move look even more anomalous.
BTC got a boost from the April 5 date, which was assigned as the birthday of Satoshi Nakamoto, the blockchain’s creator.
The irregular price moves liquidated $17.65M in BTC trades, with the rapid slide from $47,00 hurting long positions on most occasions.
More than 87% of liquidations on the Binance exchange were for long positions, as BTC tracked back to $45,000. Despite the short-term volatility, the Crypto Fear and Greed Index remains neutral at 53 points.
Will April Bring Bullish Rally
April has been a bullish month for BTC in the past few years, bringing either recovery or near-peak prices. For 2022, the expectations are somewhat muted, but after a green candle in March, BTC seems ready for another rally.
Trading activity remains near mid-range levels around $30B in 24 hours, with funds flowing both to BTC and altcoin speculation. BTC lowered its dominance to 40.9% as Ethereum (ETH) and various protocol assets are attempting rallies of their own. In 2022, it is more rare to see funds flow out of BTC and into altcoins, and a handful of large-scale projects have almost constant liquidity.
Bitcoin Scarcity Extended Gains
One of the notable factors that turned the past few weeks to a rising trend was the outflow of BTC from exchanges. The scarcity is becoming more notable and dramatic, with a shift in seeint BTC as a reserve asset.
Based on blockchain data, even buyers at the top are in no hurry to sell their coins. Inflation data is making the ownership of BTC more meaningful despite the volatility.
Whale wallets are also increasing their holdings, with one large-scale transaction of 47,212.74 coming into a large-scale unknown address on April 5. Additionally, large inflows of USDT stablecoins flow into the Binance exchange.
Stablecoin Trading Boom Supports All Markets
USDT trading volume reached above $81B in 24 hours, near the higher range of trading for the past month. USDC also spiked to above $51B in volumes. This time, stablecoin activity supported tokens and ecosystems as well, only leaving about $15B in volume, to cover about 50% of BTC trading.
Stablecoins also keep futures trading afloat, where physical BTC ownership is not needed.
The supply of USDT has also climbed relentlessly in the past month, rising to 82.4B tokens from a starting point of 79.9B tokens. The inflows accelerated in the past two weeks, boosting the BTC trek closer to $50,000.
The growth in supply also adds to the recent trend of more stablecoins flowing onto exchanges, while ETH and BTC show net outflows.
Will DOGE and ShibaInu (SHIB) Indicate Renewed Hype
One sign of an “altcoin market” is when the price of DOGE starts to move more actively. DOGE rallied after weeks at $0.12, rising to a short-term high of $0.17. The daily gains for DOGE rapidly expanded to more than 19%, more than the recovery for all altcoins.
SHIB followed suit, as it usually locks in significant gains in a short time. SHIB was still tentative at $0.00002756, but with the potential to outperform in percentage gains.
DOGE trended about a day after the news of Elon Musk buying a 9.6% share in Twitter. The meme coin is also one of Elon Musk’s large holdings, as he is rumored to hold one of the biggest DOGE wallets for the long term.
Platform Coins Move Up
Celo (CELO) stabilized its gains, after retreating slightly from the day’s peak. CELO stood at $4.43, still in a renewed attempt at price discovery.
ThorChain (RUNE) rose to $11.40, on news of a partnership with Haven Protocol (XHV). ThorChain also added a multi-chain swap for stablecoins, creating a decentralized market where small differences in stablecoins can be used for arbitrage.
More of the platform projects are seeking ways to work in multi-chain mode, instead of isolating and competing. Barring problem with smart contract exploits, most projects benefit from the shared liquidity.
BTC has also turned into a sought-after asset by the growing alternative proof of stake blockchains. Terra (LUNA) remains one of the biggest BTC buyers with the goal of using the coin as collateral, adding stability and credibility to the UST stablecoin.
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