Bitcoin continued to trade sideways this week as ether and other altcoins were in the spotlight. ETH’s most recent all-time high (ATH) of USD 3,541.46 occurred on Wednesday. By Friday, the price had been fixed at around $ 3,460.27. Dogecoin (DOGE) also hit a new ATH of around $ 0.69 yesterday; CoinTelegraph described the rise of DOGE as a “leading indicator for the old season”.
Matthew Unger, founder of iComply, told Finance Magnates that DOGE’s rise was “the biggest news in three months”.
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“We can assume that DOGE will become one of the main competitors if it is included in the top 3 cryptos. The network continues to be underestimated because it was “made as a joke,” he said, adding, “Basically, DOGE has a lot to offer and that just hasn’t been priced in.”
Either way, DOGE is on the move and the altcoin markets are full of excitement. Whether or not a “true” capital A-Alt season is underway seems to be up for debate. Still, it seems that the winds of change are blowing.
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We are in the 2-3 overlap phase. Big caps begin to move. Phase 2 has warmed up and we are seeing the first signs of phase 3. PHASE 3 is coming! pic.twitter.com/tCZdNx995c
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Bitcoin dominance is falling
For one thing, the distribution of wealth appears to be shifting in the cryptocurrency markets. Michael Dalesandro, Founder and CEO of RockItCoin in Chicago, told Finance Magnates that he thought, “We are starting to see the crypto market mature.”
“Bitcoin’s dominance by market cap has fallen from 75% to below 50% in 2021, so more capital is pouring into altcoins’ opportunities, which have seen a dramatic increase,” he added. “But I think this is just the usual cool down we’ve seen with Bitcoin in the past. I assume that it will continue to rise. “
Still, the dynamics in the market are changing so much that some analysts believe that the crypto markets are in an “old season”. Chad Steinglass, Head of Trading at CrossTower, told Finance Magnates, “Since BTC has been struggling to find direction for weeks, ETH and many other Altcoins have taken traders’ attention.”
“After consolidating in BTC towards the end of April, the bulls were hoping for the announcement of another company adding BTC to foreign currency reserves in the heart of tech earnings season,” he said. “The earnings reports came and went with no mention of BTC, however, and in fact TSLA cut their holdings a bit from the big companies that were already involved, and MSTR did not add during the recent slump.”
Still, there was “some positive news for BTC this week” as NYDIG and Fidelity announced that they would “partner to provide crypto services to residential customers,” a factor Steinglass believes is “driving the tale of Will encourage mass adoption “.
Bitcoin trades sideways while altcoins soak up investor capital in crypto markets
Benjamin Leff, Sheesha Finance’s chief operating officer, told Finance Magnates, “Bitcoin has faded into the background as the altcoin season begins.”
In other words, the strong performance of many altcoins in the past few weeks appears to have attracted an increasing number of investors.
“People believe that they can make more money with other cryptocurrencies and watch short-term games to ride the bull market. Bitcoin is a much more resilient coin that people view as a store of value rather than an opportunity to flip over and make quick and hefty gains or losses depending on what you invest in. “
2021 was a year of highs for ETH
What other cryptocurrencies may have higher earning potential than Bitcoin? All eyes this week were on Ether (ETH). The Ethereum network’s native token hit another all-time high.
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Indeed, there has been a slew of new ATHs for ETH all year round, and as such, ETH outperformed BTC many times over. Dalesandro told Finance Magnates, “Bitcoin is a pure cryptocurrency while Ethereum is a cryptocurrency and a decentralized software platform. “
“It also supports a lot of ERC20 tokens that I believe are pulling money from Bitcoin towards Ethereum,” he added.
Steinglass told Finance Magnates that Ether’s rise “is definitely a combination of many factors”.
“The value of ETH locked in DeFi stake pools has reduced the supply of coins available for trading, which has increased the scarcity,” he said. Combined with the expectation of the move to Eth2.0, “which will shift the network from proof-of-work to proof-of-stake and deflationary features, many investors are trying to accumulate ETH before the changes are made into the network . “
“From a purely technical point of view, any crypto that hits new heights generates its own buzz, and the move can become a self-reinforcing phenomenon, at least for a short time,” added Steinglass.
Ripple’s legal battle with the SEC continues
As ETH continues to grow, XRP, another popular altcoin, continues to trade sideways. Some analysts believe this may be due to the ongoing battle the currency’s creation, Ripple Labs, is waging against the US Securities and Exchange Commission.
In fact, Ripple’s battle with the began in December when the commission announced a lawsuit against Ripple Labs. At the time, the SEC alleged that Ripple Labs had illegally sold unregistered securities (XRP).
Throughout the length of the case, Ripple Labs has maintained that Ripple will remain a currency, and at times it seems that Ripple could lead the litigation. Analysts have claimed that multiple court wins could have raised the price of XRP during 2020: When the lawsuit hit in December, the value of XRP fell to around $ 0.20. At the time of going to press the price had risen to $ 1.58.
However, the outcome of the case is still unclear and investors may be biding their time before making important decisions about what to do with their holdings. After peaking at $ 1.91 in April, XRP has been trading sideways for the most part for the past three weeks.
What could the future hold for XRP? Benjamin Leff, Sheesha Finance’s chief operating officer, told Finance Magnates: “It has been discussed that Ripple could go public once the case with the SEC is resolved.”
Leff also referred to recent reports of large purchases from XRP. Citing data from Santiment, CryptoSlate reported on April 29 that the number of addresses with more than 1,000,000 XRPs, known colloquially as “XRP whales”, had increased by 1.25%. This corresponded to about 19 new “whales”.
What’s next for XRP?
However, the fate of XRP still depends on what happens next in court. Steinglass told Finance Magnates, “XRP has been up and down for quite some time, with a strong cohort of fierce defenders on one side and often the SEC and the long arm of the law on the other.”
“The recent sentiment that Ripple could survive its current legal battle with the SEC has boosted the confidence of XRP defenders. Combined with the fact that XRP has been delisted from most of the major US exchanges due to its legal issues and it is entirely possible that liquidity is tight and most of the supply is under the control of a small number of traders. These two factors can lead to spikes in volatility and large up and down movements. “
Regardless of the outcome of the lawsuit in the US, Ripple Labs appears to be expanding its networks outside of the US.
Dalesandro stated, “Outside the US, [Ripple] has been aggressively looking for new opportunities and new business, ”he said.
He also pointed to “recent news reports about the weakness of the SEC case and that the SEC is creating confusion over its actions against Ripple,” he said.
Additionally, Dalesandro pointed out that the SEC’s leadership changed hands after the commission filed the lawsuit. “Now we have one something crypto-friendly chairman, ”he said. Additionally, he believes that: “The SEC’s recent announcement that it will take enforcement action against XRP investors makes them look amateurish and increases the feeling that their case is getting weaker.”
Do you agree or disagree? Let us know in the comments below.