June 04, 2020 @ 13:09 +03:00
Bitcoin managed to stabilise after another unsuccessful attempt to overcome $10K. That was the third attempt in a month. At the moment, the market has divided into those who think that $10K may be the “ceiling” for the benchmark cryptocurrency and those who believe that jump above the round level may be just the beginning of growth.
During the week, the first coin grew by 7%. The total capitalisation of the cryptocurrency market has increased by 20%. The Bitcoin domination index fell 1.36% over the week to 64.7%, which is a favourable sign for the whole crypto market as it indicates the growth of demand for altcoins.
Market participants are now selling coins to support their operating activities. However, weak miners do not hurry to leave the market; they sell more coins than were mined, which puts pressure on the coin price, as well as the difficulty declines not being fast enough to return the cost-effectiveness. In the end, weak players will still have to leave, but attempts by the miners to hold on to the market seriously stretch this process. Another correction of the difficulty is expected today, which should reduce it by more than 10%.
Events around the bitcoin often overshadow what is happening with the altcoins, the main one being Ethereum (ETH). The coin has grown by almost 20% over the week, and the technical picture is very favourable for the leading altcoin. The Ethereum has been trading around highs since February, bouncing back from global lows around $80 in March. If the coin can close the week above $247, it will confirm its position in the upward channel and open the door for growth up to $300.
Although the coin’s prospects are most often associated with the price dynamics of the first cryptocurrency, there are enough of its own triggers for growth inside the Ethereum ecosystem. On June 2, the WhaleAlert channel showed a withdrawal of 700,000 ETH from the Bithumb exchange to unknown wallets. The ETH deficit is created naturally by keeping coins in decentralised financial applications, but the whales can help this process by withdrawing their assets from circulation.
Also, Glassnode found out that the blockchain showed the maximum number of active coins for three months. The number of wallets with a balance greater than 10 ETH is at a historic high ($275 million), while the number of wallets with a non-zero balance is increasing. The community sees that ETH is not just a speculative instrument like bitcoin, but a working platform.
The impending launch of Ethereum 2.0 is also spurring investor interest. In a sense, Ethereum remains one of the few projects that has kept the spirit of innovation alive that once drew the world’s attention to digital currencies.
The FxPro Analyst Team