Bitcoin (BTC) Price Unstable, Altcoins Decline as Market Makes Up Its Mind
BTC prices moved above $5,600 before dropping below $5,500 but this time with no positive effect on altcoin prices.
Bitcoin (BTC) extended its rally above $5,600, but this time broke the climb of altcoins, particularly as it dropped back under $5,500. The BTC rally saw other assets sold off, with expectations of higher price gains. BTC traded at $5,637.89 as of 6:40 UTC on Wednesday, on consistently high volumes of above $15 billion’s equivalent.
As Cryptovest reported, during the most recent rally, the markets saw inflows of Tether (USDT). The coins were taken out of the treasury and returned to markets, leaving the treasury wallet with just 57 million coins. The liquidity intervention may help boost BTC trading and possibly lead to higher valuations.
The BTC rally follows a “golden cross” event where the 50-day moving average went above the 200-day moving average, suggesting the start of a bull market. However, skeptics see the BTC market as more unpredictable and unregulated, and nothing guarantees the continuation of the upward trend.
The recent rally shows increased activity on Bitfinex, but also on Coinbase, where dollar-denominated trading is getting more active. Fiat trading has increased to around 13%, while USDT pairs still carry more than 72% of the total volumes.
With the most recent gains, BTC has added more than 49% since the start of 2019. The BTC market dominance rose quickly to 54.5% of total market capitalization, as altcoins lost between 5 and 10%, being sold off for BTC.
The expectations for BTC are mixed, with some seeing the opportunity to break above the $6,000 level soon. Others do not exclude a return to levels as low as $3,000 on panic selling. In the past, BTC has not behaved predictably, as some of the gains may be the cause of concerted orders and bot trading.
The price rally keeps the transaction count high for the Bitcoin network, as higher prices activate more wallets. Still close to 30,000 transactions are pending, suggesting a network overload.
The Bitcoin network hashrate, however, has seen an anomaly, dropping rapidly from around 50 EH/s to 38 EH/s. The reason for the slowdown in mining is unknown. The next difficulty reset will arrive in about 10 days, meaning miners may slow down activity to attempt to lower the difficulty.