Buenos Aires, May 12, 2021 – Binance, the global blockchain company that owns the world’s largest digital asset exchange, with more than 15 million users and a daily transaction volume of more than $ 20,000,000,000, has offered an analysis of the projections of Bitcoin and altcoins for the next few months.
After 6 months on the rise, Bitcoin has taken a well-deserved break from its vertiginous growth in green candle forms, to form the first price consolidation during April 2021. Last October, Bitcoin was trading at $ 10,300 and, Since then, the valuation of the gold digital asset has been parabolic, closing at US $ 58,700 at the end of March this year.
Analysis on Bitcoin and Altcoins by Binance
The fact that the price of Bitcoin has stabilized... It is a great indicator for traditional investors, as they are the ones who fear the volatility of cryptocurrencies the most. At the same time, this sparks venture investor interest in alternatives to Bitcoin. In this way, those looking for a safe investment can invest in Bitcoin, while those who are willing to take high-risk positions... they can bet on other currencies for the exceptional returns they can generate », says Maximiliano Hinz, Latam Operations Director of Binance.
The appreciation of more than 460% in six months, between October and March, opened the eyes of big investors such as Elon Musk and Michel Saylor, along with MicroStrategy. Therefore, the snowball effect was immediate.
In this sense, it is worth explaining that, when large and recognized investors support an asset, the media echo and promote the FOMO (Fear of missing out) of small investors (retailers) and other investors who enjoy some anonymity. Therefore, it is thanks to this phenomenon that we can find crypto market capitalizations of more than two trillion dollars in less than 12 years in the market, something never achieved by globally recognized companies such as Google or Apple, in such a short time .
In fact, Apple achieved that amount of market capitalization in 2018, after 42 years of trading on the stock market. Google, for its part, managed to reach US $ 1,000,000,000,000 of market capital in 21 years, last February 2020.
The projections for the growth of the cryptocurrency industry seem to come with a lot of favor.
What happens in the crypto market?
Bitcoin’s dominance over cryptocurrencies is piercing 45.48 points; In other words, 54.5% of the crypto market is not made up of Bitcoin, emphasizes Binance.
From the technical analysis, we can see that the support around 46 points did not resist the strong appreciation of the altcoins, during the weekend of May 8 and 9. The next support is around 41 points, which with a seriously oversold RSI (Relative Strength Index), means that the odds of a rejection and bounce in this area are very likely. In that case, Bitcoin will perform better than the rest of the cryptocurrencies. We must remember that this does not necessarily mean that the altcoins will fall in price (USD) but that they will decrease against the Bitcoin pair.
One of the indications that allows us to sustain this hypothesis are the projections given by the marketcap (the total valuation) of the cryptocurrencies, which do not contain the valuation of Bitcoin. In this graph we can see that the crypto valuation has recently exceeded the level of January 2018. In the previous cycle, between July 2016 and January 2018, there was a boom over the valuation of that market, reaching an increase of 217,156%. If we only had 10% of this increase in the current valuation, we should think about an increase of 21.715%.
Today, the increase is of the order of 180%. Before allocating all your savings to buy and enter FOMO, we must analyze that market and know that, although history tends to repeat itself, it does not necessarily do it in the same way.
At a technical level, we can use the Fibonacci Extension to be able to estimate the growth of the capital market of all cryptocurrencies except Bitcoin.
It is worth explaining that the Fibonacci Extension allows us to anticipate the most likely levels at which expert traders will profit.
Therefore, as we can see, we are at an important level that may indicate a possible brief consolidation in this zone or the possibility of reaching the next level at $ 5 trillion and a maximum extension of $ 50 trillion.
In this case, 5 trillion would imply an increase of 12,000%, while 50 trillion dollars would be an increase of the order of 51,000%; something more in line with the possible expectations of the market and that would represent a little less than 25% of the increase of the previous cycle.
Ethereum powers the crypto market
One of the reasons why the crypto market, except for Bitcoin, has had such a significant increase, is thanks to the growth of Ethereum, which in recent months went from being worth USD 1,000 to USD 4,000, in the first days of May.
As with Bitcoin; It is very likely to observe a period of consolidation of that price that by rule of communicating vessels will allow to feed the cryptocurrencies with less capital. When will this happen? The Total2 / ETH pair gives us information regarding that possible cycle. In effect, we observe that the trend is changing in favor of the other cryptocurrencies compared to Ethereum. In this weekly chart, the trend of EMAs is on the verge of crossing to the upside; This means that non-Ethereum cryptocurrencies will start to perform better than Ethereum.
Hence, a new season of altcoins is already upon us. The fall of the dominance of Ethereum over the rest of the altcoins returned to the lows of July 2020. Therefore, the entire ecosystem of new projects; As for example, everyone that covers the Binance Smart Chain with its BNB-based fuel will benefit.
Ready for a volatile and exciting second quarter ending?
Binance is the world’s leading provider of blockchain infrastructure and cryptocurrencies such as Bitcoin. In this sense, it offers a set of financial products that includes the largest exchange of digital assets by volume. Trusted by millions of users around the world, the Binance platform aims to accelerate the adoption of cryptocurrency, including Bitcoin; offering an important portfolio of crypto products and services. These include: trading and finance, education, information and research, social responsibility, investment and incubation, decentralization, and infrastructure solutions.
For more information, visit their official page.