- Bitcoin (BTC) prices waivered this week as the hash rate hit new highs.
- Alt Coins showed relative strength in comparison to Bitcoin.
- Cryptocurrency markets reacted positively to signs of an economic recovery in China.
The price of Bitcoin (BTC) continued its sideways drift this week. Bitcoin has now been range-bound for the previous 10 weeks and is hovering near the low of the recent range. Other cryptocurrencies rose modestly early in the week on the back of positive Chinese economic data. Chinese equities racked up massive gains of 12% when measured by the CSI 300 ETF (ASHR).
The stagnation in BTC prices over the last several weeks has caused the normally volatile coin to show the highest correlation to the S&P 500 index ever, according to crypto research company Skew. Meanwhile, Alt Coins such as Ripple (XRP) and Ethereum (ETH) rose on the week, tallying gains of around 10% and 3%. Both XRP and ETH have mimicked the action in BTC in recent weeks, as they have consolidated, but this may be the first clue of greater demand.
This Week’s Topics
- Mining revenue is down 23% month over month as the Bitcoin (BTC) hash rate hit new highs.
- “DeFi” (Decentralized Finance) transactions, or financial transactions on the blockchain, saw volumes hit new all-time highs.
- Dogecoin (DOGE) rose by more than 35% after a video promoted it on the popular social media app Tick Tock
Next Week’s Market Forecast
Into next week, investors of all asset classes will continue to focus their attention on new developments in the global fight against Covid-19. The number of cases has increased in recent weeks but equities, gold (@gc), and cryptocurrencies have all held firm. Funds have moved into gold in recent weeks an easy monetary policy continues to be the trend globally. Cryptocurrency investors on the other hand have yet to get a firm answer about the value as a hedge against inflation.
From a technical standpoint, crypto traders will continue to monitor the ranges. To break out, Ethereum (ETH) would need a move over the $255 level. For Bitcoin (BTC) bulls to remain in control BTC will need to hold the $9,000 area. $9,500 (this week’s high) will act as interim resistance.