How long can this cryptocurrency rise last? Altcoins floating | news

The stock indices continue their strong run and the Nasdaq tech index is at its highest level in a month. This is due to the fact that investors’ risk appetite has increased significantly recently. And this movement 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. The significant improvement in the mood in the stock market therefore benefited cryptocurrency investors. The so-called altcoins also became attractive again.

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

In all likelihood, gains in the cryptocurrency market will last as long as the stock market recovers while fears of a recession subside. During a recovery phase in the cryptocurrency market, it is worth taking a look at smaller projects. These often exhibit far higher volatility than the major cryptocurrencies like Bitcoin or Ethereum, which investors are beginning to see as safe havens.

The correlation between Bitcoin and the stock market has recently fallen to levels seen at the beginning of the year, suggesting that cryptocurrencies will go their own way. However, as risk appetite increases, we again see a marked increase in the correlation between these markets. Source: Bloomberg

Here’s what you need to be aware of in the cryptocurrency market in the near future:

  • The sudden increase in the correlation between cryptocurrencies and indices suggests that without support from the stock market, cryptocurrencies may have difficulty recovering
  • Ethereum awaits news of the test of the new network, which is scheduled to take place in August
  • Ethereum 2.0 is scheduled to launch in September, but has been postponed several times
  • The current recovery in the stock market is still very fragile and there is still uncertainty, especially with regard to further interest rate rises and a possible recession
  • The Altcoin rally can be particularly strong and last as long as Bitcoin and Ethereum themselves come together
  • The biggest altcoin gains may come as the major cryptocurrencies run out of fuel for market upheaval but keep their high levels

What projects should you consider in the near future?

Filecoin

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

Algorand

Behind the cryptocurrency is the fintech company Circle, which developed USDC stablecoin and has BlackRock as an investor. Algorand is named in a group of potential “Ethereum killers” that also includes Cardano, Solana and Avalanche. Altcoin valuation has risen recently, although Ethereum is on a strong uptrend. Ethereum is trying to gain its competitive edge by switching to Proof of Effort and better network scalability.

FTX

The cryptocurrency acts as a currency within 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 seen an increase in popularity and positive sentiment among institutional investors thanks to its transparency and the implementation of all the mechanisms that deepen its centralization, such as AML and KYC.

Graphic user interface, diagram, histogram Description is generated automatically

FTX project on the H4 chart. From a technical perspective, the cryptocurrency is currently in a consolidation zone following the recent bullish momentum. The bullish mood has been somewhat subdued in the $ 30 zone today, with a clear sales zone emerging. We can currently consider the $ 28.93 and $ 28.26 areas as local support. Source: xStation 5

Decentraland

One of the ancestors of the Metaverse niche, made famous by creating his own universe. Today, the metaverse is not only a breeding ground for internet freaks, but also a business area for multinational companies such as the fashion house Gucci, Adidas and Google, which are increasingly involved there. Land on the Decentraland platform, which sells for hundreds of thousands of dollars, attracts the attention of people who are fascinated by new technologies. Recently, news of a partnership with Playboy to rebuild an iconic property in the world of Decentralia caught the attention of investors.

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

Disclosure pursuant to § 80 WpHG for the purpose of possible conflicts of interest

The author is currently not invested in the securities or underlying referred to.

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