Cryptocurrencies are growing again amid falling dollar and market in general
July 27, 2020 @ 16:30 +03:00
Bitcoin grew 5% in a day and changed hands for $10,200. The sideways price trend has lasted almost 3 months, while the hopes of a reversal weakened with each new week. Miners were among the optimists, increasing coin production. The stability of the reversal will be tested in time, but there is still reason to doubt it.
In recent months, Bitcoin has been increasingly correlated with the stock market. However, at the moment, the first coin switches to precious metals, showing similarity with the positive dynamics of silver. Nevertheless, the correlation may be short-lived.
The sharp increase in demand for gold, silver, and Bitcoin reflects growing concerns that the current wave of growth may prove as deceptive as it was in March. Many market participants are openly expressing their concerns over the historical growth of stocks amid the global pandemic. However, FOMO has so far prevented the market from starting the balancing process. In addition, the increasingly fierce confrontation between the U.S. and China has great potential to reverse any trend.
Over the next few days, Bitcoin will have to pass an important test of $10K. In order to confirm the bullish sentiment, the coin needs not only to consolidate near this level, but it also needs to grow towards $11K and above. Only this will stop investors from taking-profit. After all, investors who entered the market after the March collapse may well be satisfied with a more than two-fold growth.
The leading altcoin Ethereum (ETH) showed 32% growth over the week, overcoming an important psychological and technical level, and is now trying to consolidate its position. Unlike bitcoin, where speculative demand rules the dynamics, ETH price is also driven by the demand for platform technical capabilities. Besides approaching the network transition to 2.0, the demand for tokens can be supported by the circulation of USDT stablecoin on the Ethereum blockchain. As we know, the demand for a stablecoins is only increasing.
In addition, significant growth is demonstrated by decentralized financial applications, where the Ethereum blockchain has good positions. Thus, platform developers fit perfectly into all popular crypto market areas, providing the coin with a more stable basis for growth. Almost all the altcoins from the TOP-10 show strong growth over the week, which may reflect the increase of retail demand for this type of asset. Along with the growth of altcoins, the bitcoin dominance index, which has now reached 61.4%, is falling. However, we should be cautious about the current crypto market growth, as none of the global players can now guarantee any long-term trends.
The FxPro Analyst Team