Altcoins rally and Bitcoin holds above $28K, while all eyes focus on the Fed
 |
Get all important market news and expert opinions in one place with our daily newsletter. Receive a comprehensive summary of today’s top stories straight to your inbox. Sign up here! |
(Kitco News) – Global financial markets rose on Tuesday as efforts by governments across Europe and in the United States to stabilize the banking system helped calm fears among investors, who now turned their attention to tomorrow’s Federal Reserve interest rate announcement.
The major stock market indexes extended their winning streak to two days, with the S&P, Dow and Nasdaq all managing to maintain their momentum from Monday and end the day in the green, up 1.34%, 0.94% and 1.65% respectively.
Data provided by TradingView shows that Bitcoin (BTC) bulls continued to guard the $28,000 support and at one point tried to push the price higher, but met stiff resistance at $28,600, resulting in a price decline to $28,200.
BTC/USD 4-hour chart. Source: TradingView
Senior technical analyst Jim Wyckoff of Kitco said that “April Bitcoin futures were firmer in early US trading after hitting a contract high on Monday.” He added that “bulls have the solid technical advantage in the near term amid a new price uptrend in place on the daily bar chart,” and suggested that “More upside is likely in the near term.”
Retail traders helped drive the Bitcoin rally
According to the latest Bitfinex Alpha report, “The recent increase in BTC price beyond the long-term high range is a promising sign for the cryptocurrency market. Order flow and chain data indicate that this price increase beyond the high range can be attributed to spot buying by both large and small investors and traders.”
Evidence that there has been an influx of smaller traders can be found by looking at the number of new non-zero balance wallets on the Bitcoin network, with nearly a million such wallets coming online in less than a month to bring this metric to a new all-time high of 44.778 million in March.
“Recovery of these metrics is a positive indicator of the network’s growing usage,” Bitfinex said. “However, it is important to note that the entry of new market participants and spot buying are typically associated with the early stages of a bull market or the later stages of a bear market. Therefore, it is prudent to wait for confirmation that the breakout from the 273-day range is sustained before engaging in market purchases of BTC.”
BTC/USD 6-hour chart. Source: Bitfinex
Bitfinex highlighted that large investors were primarily accumulating Bitcoin at “sub-$18,000 levels”, but the 50 percent increase in price has attracted a new cohort of buyers, which “bodes well for the long-term health of the BTC market .”
Overall, the analysts at Bitfinex feel that the worst of the crypto winter is now in the past, and how things move forward will likely depend on developments from the Federal Reserve and what it decides to do with regards to interest rates.
“While macroeconomic uncertainty continues to overshadow any positive sentiment, even for crypto prices, headline year-over-year inflation is moderating, and the Federal Reserve moving toward halting its rate hikes over time is certainly an indication that we are headed for stabilization, however bumpy,” the analysts concluded.
Altcoins rally as BTC consolidates
A common view after Bitcoin goes on a significant run and then goes into consolidation is that there is an upswing in the altcoin market – often referred to as the “altcoin season” – which gives high-quality projects a chance to catch up to the performance of the top crypto.
Daily performance in the cryptocurrency market. Source: Coin360
XRP appears to be leading the currency altcoin rally, with a gain of 25.29% on Tuesday as traders position themselves ahead of a possible victory for Ripple in its ongoing litigation with the Securities Exchange Commission (SEC). XRP holders have become more optimistic about the prospects of the token after the judge in the case dealt a blow to the SEC by removing the primary witness who was scheduled to testify about the perceptions of a reasonable XRP buyer.
Other notable gains on Tuesday included a 22.38% increase for Joe (JOE), a 15.1% increase for BrainTrust (BTRST) and a 13.65% increase for MAGIC (MAGIC).
The total cryptocurrency market cap is now $1.18 trillion, and Bitcoin’s dominance rate is 46.1%.
Disclaimer: The views expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for any loss and/or damage arising from the use of this publication.
