As Bitcoin struggles to make a breakthrough at the crucial $20,000 mark, fears of a global recession remain high. The much-loved crypto continues to trade in a relatively tight range, alternating between up and down days. Currently, Bitcoin is trading at the psychological $19,000.
Up by 4.60% in the last 24 hours, Bitcoin is trading at $19,774. Ethereum is still at the lows of $1,366 despite gaining 4.64%. BTC and Ether correlations range between 1.0 and -1.0. Bitcoin implies a direct relationship, while Ether implies a completely inverse relationship. It’s not surprising that Ether moved in tandem with Bitcoin in terms of direction and volume over the weekend. Since shifting to the proof-of-stake (PoS) consensus mechanism, the supply for Ether by market capitalization has increased by 8,400 ETH.
Analysts expect the top two cryptocurrencies to rally in the next couple of weeks or months. They believe investors should consider investing in cryptocurrencies as no one knows whether traditional markets will bounce before entering a further recessive environment.
Michael J.Burry, a financial wizard, gave an example of Tesla’s stock price in December 2020. He said a 47% rally happened in the 35 days and Tesla’s shares peaked 10 months later after a 105% total gain from Tesla’s supposedly ridiculous price. Traders should note that the US dollar index has rallied strongly against other major global currencies to reach its highest level in 20 years; this indicates that investors want to seek shelter in cash positions, exiting stock markets, foreign currencies, and corporate debt.
Bitcoin is currently 20% below its August peak – representing an opportunity set of sorts to bullish traders. Meanwhile, the altcoins have seen significant gains. Solana gained 6.77% in the last 24 hours, as per data from CoinMarketCap, Polkadot gained 6%, Polygon MATIC 3.70%, and Cardano is up by 2.41%. Ripple’s XRP is the biggest loser, down by 2.58% in the last 24 hours.
