The week’s upward momentum has extended into the weekend as the majority of the top 100 tokens listed on CoinMarketCap posted double-digit gains.
Bitcoin’s (BTC) entering into a brief period of consolidation and the possibility of a third round of economic reviews for American citizens are two possible reasons for today’s bullish price move.
While there are concerns about the recent large inflows of Bitcoin from BTC whales into South Korean exchanges, fundamentals such as miners’ sentiment and declining supply make investors relatively optimistic about the future price outlook for Bitcoin.
A growing number of experts have voiced their opinion that Bitcoin’s recent uptrend is due to the outflow of gold as the top cryptocurrency is quickly becoming the preferred inflation hedge for the millennial generation.
Bitcoin finds a new reach in uncharted territory
After the new all-time high in Bitcoin (BTC) of $ 41,940 on Jan. 8, the top cryptocurrency has entered what appears to be a brief period of consolidation as bulls attempt to raise the price after confirming the $ 40,000 level as support.
At the time of writing, BTC is up 1.53% on the day, trading at $ 40,690 as 24-hour trading volume is down 26% from the record high of Jan. 8.
Predicting next steps is a difficult task at these price levels due to the lack of a price cap. In terms of price volatility, Chad Steinglass, Head of Trading at CrossTower, suggested that increased volatility could be the norm until the market moves “into a more stable environment of even flows and prices.”
In private comments to Cointelegraph, Steinglass said:
“I think we’re at a stage in the markets where $ 1,000 intraday swings will be as good as normal. The liquidity of the market maker in relation to the size of the big players is getting smaller and smaller. Since market makers have less capacity for inventory risk compared to the trade flow, I expect prices will move pretty quickly. “
Has a new altcoin season started?
As in previous bull markets, a rise in Bitcoin price is often followed by a period of consolidation. During this time, traders tend to turn their attention to altcoins, and bitcoin profits shift to cryptocurrencies with a smaller cap.
According to Jean Baptiste Pavageau, an ExoAlpha partner, Bitcoin’s current upward momentum will slow down at some point, and by then, investors in altcoins are likely to pile up. Pavaageau said to Cointelegraph:
“Indeed, over the past two weeks we’ve seen a classic ‘wealth’ distribution pattern where Bitcoin investors try to take their profits and invest in other blue chip coins. As the upward trend in Bitcoin declines, the altcoin market is becoming more attractive to traders and investors looking for high returns. We assume that Bitcoin’s dominance will gradually decline and the altcoin market will boom over the next few weeks. “
The price of Ether (ETH) continues to climb to new year highs as the price rose 4.2% to $ 1,267. Bitcoin Cash (BCH) and Bitcoin SV (BSV) are up 23.6% and 61%, respectively.
After a week of positive developments for stablecoin projects, MakerDAO and its MKR token, which governs the development of the DAI stablecoin, have seen a 45% increase in the past 24 hours and are currently trading at $ 1,530.
The market cap for cryptocurrencies is now $ 1.1 trillion, and Bitcoin’s dominance rate is 69%.