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Buyers Claw at Bitcoin

Bitcoin returned to growth territory with a powerful surge at Monday’s close, above the all-important $40K key level. A desperate attempt to hold on to the uptrend line from January resulted in a temporary success.

Buyers Claw at Bitcoin

Over the past 24 hours, we have seen a 5% jump to $40.8K. Ethereum adds 4.5% in 24 hours, trading above $3040. Other leading altcoins from the top ten are adding between 3.5% (Dogecoin) and 18% (Terra). Total crypto market capitalisation, according to CoinMarketCap, rose 4.6% overnight to $1.89 trillion. Bitcoin’s dominance index added 0.3 p.p. to 41.0%.

The cryptocurrency Fear and Greed Index declined Tuesday, adding 3 points to 27 and moving into “fear” territory.

Yesterday, the formal trigger for bitcoin buying was reverting US stock indices in the New York trading session to the upside. However, what is striking is that cryptocurrencies were many times more optimistic about this change in trend, suggesting demand has been waiting to surge into the market.

Also noteworthy is the increased amplitude of growth in the hottest cryptocurrencies (Solana, Terra, Avalanche), gaining more than bitcoin. The buying wave has not yet spread to the entire market, evidenced by bitcoin’s rising share.

As the market as a whole, Cryptocurrencies are a system of communicating vessels on several levels. Bitcoin fills the demand first, followed by the first round of popular coins, followed by a wave of buying of smaller projects. The further away from the centre, the lower the liquidity, but the higher the sensitivity to sentiment. NTFs in this scheme are illiquid, where demand has not yet reached.

The NFT market is about to burst because of rising interest rates, believes Nassim Taleb, American economist and author of Black Swan. Previously, he has been critical of bitcoin, calling it “entertainment for losers”.

According to Blockchain.com, fees on the bitcoin network have fallen to their lowest since June 2020. The average transaction processing fee now costs a user just over $1. The number of Lightning Network users has grown 800 times in a year, to 80 million, Arcane Research estimated. Lightning is designed to solve the problem of reducing high transaction fees.

Source: FXPro