After months in a downtrend, the cryptocurrency market again started an appreciation cycle driven by the rise in the price of Bitcoin (BTC) which rose more than 25% in the last 25 days.
Following the BTC line, cryptocurrencies such as Ethereum (ETH), Binance Coin (BNB), Cardano (ADA), Solana (SOL), Axie Infinity (AXS) among others, they appreciated more than 70% in the period.
However, after this boom, analysts specializing in cryptocurrencies are wondering if the move was sustainable or just a relief from the bear market months ago.
In conversation with Cointelegraph Brazil, Ulrik K.Lykke, executive director of the crypto/digital asset hedge fund ARK36, said there appears to be a shift in market sentiment compared to a few months ago.
According to him, the narrative about energy consumption in the cryptocurrency market (which helped bring down the price of BTC) lost steam after several sources argued that the grid actually has a good power mix.
In addition, he says, Bitcoin is paving the way for the public domain on many other fronts, such as increased adoption, technology improvements and the like, which are increasing positive public perception.
“When bitcoin price rises 50% in 19 days or 20% in 6 days, as has happened recently, the crucial thing is to identify whether the increase is leveraged or driven by the spot. That is, if price development is driven by short-term speculators or long-term investors. Currently, large outflows of bitcoin from exchanges and declining liquidity point to the latter,” he said.
Also according to him, technically, Bitcoin price still needs to be above $50,000 to get out of the bear cycle and fundamentally, both blockchain data and pure sentiment analysis look positive for now.
“But traders should monitor the situation closely and be alert to any signs of a potential reversal of this trend, suggesting the rise was a dead-on jump,” he said.
discharge was expected
Recently, Cardano (ADA) ignored a price crash warning to reach a new historical record. The ADA/USD pair hit $2.56 for the first time on Friday 20th, after a 154.54% price boom that began on July 20th.
In doing so, the pair also ignored veteran trader Peter Brandt’s 60%-90% price drop warning, which was based on a classic bearish pattern called the head and shoulders.
“This increase by Cardano is linked to the new update in its protocol, which is already being tested, and will allow the operation of smart contracts, DeFi protocols and decentralized exchanges. Making Cardano, a strong competitor of Ethereum,” said Marco Castellari , CEO of Brasil Bitcoin, stressing that he believes the upward trend may continue.
About Bitcoin, Castellari points out that due to several negative news, added to the entry of many newcomers to the market, there was a very sharp correction in Bitcoin, which is something normal and extremely healthy for the market and it was just a matter of time for prices to return to their previous level.
The Country Manager of SatoshiTango, Guilherme Quintino Ribeiro, argues that the fall in Bitcoin and its recovery later was expected by the market and that the bearish patterns are healthy and fundamental to generate a bull market like the one it is now.
“The fall is normal and healthy. For those who trust the currency, we recommend holding, which is known in the crypto world as conserving and holding Bitcoin reserves. It should be noted that the price of BTC moves by segments, therefore, after a collapse, their price tends to recover and rise even more,” he said.
Ascent will take BTC to $65,000
Joshua Scigala, co-founder of TheStandard.io , a DeFi infrastructure project that provides a bridge between traditional physical investments and cryptocurrencies, told Cointelegraph Brazil that Bitcoin is increasingly showing its potential but its limitations could cause it to be surpassed by Ethereum (ETH).
According to him, after the successful update of the hard fork called London many people are realizing the fact that ETH is now deflationary rather than infinitely inflationary, meaning that more ETH is being burned than created per block.
“For the first time, I think ETH may be leading and valuing more than Bitcoin. Normally Bitcoin is the tide that lifts all altcoin boats, but after this update, we may be witnessing a time when Ethereum becomes the rising tide. Bitcoin and the rest of the market,” he said.
For Ruud Feltkamp, CEO of automated trading bot Cryptohopper, the resemblance to the 2017 bull market is almost incredible and Bitcoin is expected to cross the $65,000 mark soon.
“With the current trend, I expect Bitcoin to hit 65k soon. Resistance is substantial there so you’re likely to see a bounce just like in 2017 and so Bitcoin will fluctuate for a while. Once above $65,000 we can say Bitcoin is once again on track to its long-awaited $100,000 target this year,” he said.
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