In the last 24 hours, the bitcoin price recovered beyond the $4,000 mark as alternative cryptocurrencies in the likes of Cardano (ADA) and EOS surged by more than 10 percent on the day.
Many tokens and crypto assets including Nuls, Wanchain, Ontology, Crypto.com, OmiseGo, and others have increased by 5 to 15 percent against both bitcoin and the U.S. dollar, demonstrating strong momentum.
On Wednesday, a cryptocurrency trader and technical analyst known to the crypto community as “The Crypto Dog” told CCN that despite the unforeseen drop of bitcoin to $3,900, the strength of alternative cryptocurrencies could allow the rest of the market to remain afloat.
He said: BTC is ‘neccing’ but alternative cryptocurrency ratio pairs are going up… what does this mean? This isn’t ordinary price action. I don’t know exactly what is going to happen (of course I don’t, I’m not a wizard), but this doesn’t seem like a typical dump at all. Yes – everything certainly could collapse into fire in the next hour, but my gut says we go up from here. Alternative cryptocurrencies looking bullish.
While some technical analysts have said that they would still remain optimistic in the medium-term outlook of the cryptocurrency market even in an event in which bitcoin drops to $3,500, a trader known as Mayne stated that it is crucial for bitcoin to defend the $3,900 support level.
The overall increase in the value of alternative cryptocurrencies during a period in which the price of bitcoin remains stagnant suggests that new capital is not flowing into the market; rather, existing funds in the cryptocurrency market held in bitcoin is moving to alternative cryptocurrencies.
As Su Zhu, the CEO of Three Arrows Capital said, there is about $6 billion sitting in the cryptocurrency market on exchanges, stablecoins, and crypto funds.
Hence, in recent weeks, considering the independent price movements of many alternative cryptocurrencies, it is possible that money stored in stablecoins and dominant assets like bitcoin and ethereum have been moving into alternative cryptocurrencies.
The progress in the development roadmap of Cardano combined with the anticipation of investors towards the listing of ADA on Coinbase likely have fueled the short-term price movement of ADA.
In the past month, the price of ADA surged from $0.040825 to $0.065987, by more than 61 percent against both bitcoin and the U.S. dollar.
EOS, the fifth most valuable crypto asset in the cryptocurrency market, has also demonstrated an impressive 30 percent rally in the past three weeks, possibly triggered by the growth of the number of decentralized applications (Dapps) on the network.