Altcoins rally as analyst warns Bitcoin is in the ‘$50K – $60K twilight zone’

The value of Bitcoin (BTC) is nonetheless caught in what merchants hope will probably be a short-term downtrend as the influence of the April 18 rumors of a crackdown on “unnamed monetary establishments” for facilitating cash laundering utilizing cryptocurrencies has but to be shaken off. 

Data from Cointelegraph Markets and TradingView reveals that since being pummeled beneath the $51,000 degree on April 18, the value of BTC has been buying and selling in a variety between $52,500 and $57,500 and establishing a descending sample of decrease highs and decrease lows.

BTC/USDT 4-hour chart. Source: TradingView

While regulatory issues might have performed some function in the present drawdown, there have been a number of different vital developments which have affected BTC’s restoration.

According to Micah Spruill, managing accomplice and chief funding officer at S2F Capital, a 20% to 25% drop in the Bitcoin hash price brought on by necessary energy blackouts in the Xinjiang area of China over the weekend “pressured roughly 80% of the miners in that space offline.”

Spruill sees this drop in hash price, mixed with an all-time excessive in the Bitcoin futures open rate of interest as the catalyst for “the good situation for a significant over-leverage washout.”

In phrases of what comes subsequent for Bitcoin, Spruill pointed to a rise in bullish sentiment amongst analysts and merchants “after a lot of the over-speculation in the market this month was tempered by the value pullback.”

Spruill mentioned:

“Currently, the on-chain metrics are wanting extremely wholesome with accelerating progress of recent entities becoming a member of the community, elevated person signups on main exchanges like Binance, and continued bullish web change outflows in each Bitcoin and Ethereum.”

Bitcoin’s present buying and selling vary could also be dominated by bots

David Lifchitz, chief funding officer of ExoAlpha, echoed Spruill’s views, additionally pointing to regulatory issues in the United States and the introduced ban on cryptocurrencies in Turkey as “the match that lit the fireplace of an overleveraged buying and selling atmosphere” based mostly on the perpetual swaps funding price earlier than and after the plunge.

According to Lifchitz, Bitcoin is now again in the “$50,000 – $60,000 twilight zone,” which is characterised by institutional dip-buyers with orders at the $50,000 degree, retail FOMO — the worry of lacking out — above $60,000, and “buying and selling bots taking part in ping-pong in the vary in between.”

Since the drawdown, Lifchitz has recognized a brief help for BTC in the center of the vary, round $54,000 to $55,000, however nonetheless considers it “too early to say if the dip is over.”

Lifchitz mentioned:

“Without any sturdy catalyst, breaking above $60k appears to be like tough presently, and a break beneath $50k might drive Bitcoin right down to $30k. Traditional markets displaying indicators of exhaustion may put a dent on the crypto markets restoration.”

Ethereum value hits a brand new excessive

Bitcoin’s present downtrend has opened the door for Ether (ETH) to step into the limelight, with the top-ranked altcoin by market capitalization hitting a brand new all-time excessive at $2,644 on the again of $47.3 billion in buying and selling quantity.

ETH/USDT 4-hour chart. Source: TradingView

Ether’s rally was accompanied by a 25% rally in the value of Maker’s MKR, one in all the oldest decentralized finance initiatives on the Ethereum community, which reached a brand new all-time excessive of $4,980.

Solana’s SOL has additionally been a powerful performer as of late, surging 26% in a single day to succeed in a brand new file excessive at $39.72.

The total cryptocurrency market cap now stands at $2.02 trillion, and Bitcoin’s dominance price is 49.6%.