How long could this cryptocurrency growth last? Altcoins are growing rapidly | News

Stock indices continue their streak with the Nasdaq technology index at its highest level in a month. This is because investors’ risk appetite has grown significantly recently. And this move translates directly into the valuation of Bitcoin and smaller cryptocurrencies. Investors have long been able to observe a fairly high correlation between US indices and the prices of major cryptocurrencies. A significant improvement in sentiment in the stock market has therefore benefited cryptocurrency investors. The so-called altcoins have also become attractive again.

It’s worth noting that Bitcoin has already recovered about 30% of its recent minimum of $ 18,000. Ethereum has witnessed an even bigger rally. Operators are preparing to migrate networks to version 2.0. This is expected to reduce energy consumption by up to 99%, as well as reduce the amount of energy in the circuit. Due to the still high valuations of Bitcoin or Ethereum, their volatility may be limited compared to less known projects.

Most likely, profits in the cryptocurrency market will continue as long as the stock market rebuilds after fears of recession subside. In the recovery phase of the cryptocurrency market, it is worth looking at smaller projects. They often exhibit far more volatility than major cryptocurrencies such as Bitcoin or Ethereum, which investors are beginning to see as a safe haven.

The correlation between Bitcoin and the stock exchange has recently dropped to early-year levels, suggesting that cryptocurrencies will go their own way. However, as the risk appetite increases, we are again seeing a significant increase in correlation between these markets. Source: Bloomberg

Here’s what to watch out for in the cryptocurrency market in the near future:

  • A sudden increase in correlation between cryptocurrencies and indices suggests that without the support of the cryptocurrency exchange, they may have difficulty rebuilding
  • Ethereum is waiting for news of the new network tests, which are scheduled to take place in August
  • Ethereum 2.0 is due to be launched in September, but has been postponed several times
  • The current stock market recovery remains very fragile and uncertainty persists, especially with regard to further interest rate increases and a possible recession
  • The altcoin rally can be particularly strong and last as long as the rally of the Bitcoin and Ethereum themselves
  • The biggest gains from altcoins can come when the major cryptocurrencies run out of fuel for market growth, but maintain their high levels

What projects should you consider in the near future?

Filecoin

The Filecoin Foundation (creator of Filecoin) aims to provide blockchain technology solutions and create decentralized storage in the growing space industry. The infrastructure that the company is building has been designed to facilitate the exchange of information, speed up communication while reducing the cost of storing data between the Earth and space. To this end, Filecoin has signed an agreement with the American defense giant Lockheed Martin. The partnership of both companies was announced at the World Economic Forum in Davos.

Algorand

Behind the cryptocurrency is the fintech company Circle, which developed the USDC stablecoin and has BlackRock as its investor. Algorand is in the group of potential “Ethereum killers” which also includes Cardano, Solana and Avalanche. Altcoin valuations have recently risen despite Ethereum’s uptrend. Ethereum is trying to gain a competitive advantage by switching to Proof of Stake and better network scalability .

FTX

Cryptocurrency acts as a currency on the FTX exchange. It was founded by Sam Bankman-Fries, a well-known cryptocurrency billionaire and investor in blockchain technology. The FTX exchange has recently experienced an increase in popularity and positive sentiment among institutional investors thanks to its transparency and implementation of all mechanisms enhancing its centralization, such as AML and KYC.

Graphical user interface, graph, histogram. Automatically generated description

FTX project in the H4 chart. Technically, the cryptocurrency is currently in a consolidation zone following its recent bullish pace. The bullish sentiment has been somewhat muffled today in the $ 30 zone, where a clear sell zone has emerged. We can currently consider $ 28.93 and $ 28.26 worth of local support areas. Source: xStation 5

Decentralized

One of the precursors of the Metaverse niche, famous for creating his own universe. Today, metaverse is not only a breeding ground for online geeks, but also a business area for international corporations such as Gucci, Adidas and Google, which are more and more involved there. Plots on the Decentraland platform selling for hundreds of thousands of dollars attract the attention of people fascinated by new technologies. Recently, investors’ attention was drawn to the news of a partnership with Playboy to rebuild iconic real estate in the world of Decentraland.

Maximilian Wienke, CFTE
Market Analyst at XTB
maximilian.wienke@xtb.de

Disclosure in accordance with § 80 WpHG for possible conflicts of interest

The author is not currently investing in these securities or underlying instruments.

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