Bitcoin (BTC) continues to exhibit strength well into the second week of October with a 15% gain in the last one week. The total cryptocurrency market had a modest 1% dip today to stand at $2.3 trillion as of 5 pm IST, with most altcoins (cryptocurrencies other than Bitcoin) struggling to keep momentum with the market leader. This article analyzes key trends in the prices of cryptocurrencies this week with an estimate of what is likely to happen over the next few weeks.
Understanding the market cycle
Data historically suggests that the cryptocurrency market moves in cycles with capital flowing into BTC first, causing its price to surge, before subsequently flowing to Ethereum (ETH) and other altcoins. When money enters into BTC, typically starting Q4 (Oct.-Dec.) every year, it is likely for altcoins to either go into a consolidation phase (a period of sluggishness in price movements) or shed some percentages. It is generally reflected in the BTC dominance metric which is the share of BTC to the total market capitalization. This is expected to reverse in Q1 of next year with BTC remaining constant while ETH and other altcoins register strong gains.
Bitcoin is outperforming the market in October
In the past three weeks, the BTC dominance has jumped from below 42% to around 47% today. It is highly likely that this metric will go above 55% in the upcoming weeks. BTC is currently trading at a value of $57,100, up by 1% on a daily basis.
All the top 20 altcoins are in the red today. ETH, the second largest crypto, is currently trading near $3,450, with a decline of 3% in the last 24 hours. ETH got rejected at the psychological resistance of $3,650 over the weekend. The current price range is an ideal entry point for all investors before the expected surge early next year.
Cardano (ADA) reclaimed its third spot this week from Binance Coin (BNB) but experienced selling pressures near the $2.25 region, losing more than 5% today. ADA is currently retesting its strong support level at $2.08. Buyers need to step in to secure the level to prevent a steeper decline to the $1.9 region.
The short-term outlook for Bitcoin
According to data analytics platform Glassnode, BTC balances on exchanges have fallen to a three-year low of 2.4 million BTC indicating interest among investors to hold the asset despite the price of BTC reaching a five-month high.
Analysts expect the BTC rally to continue further with a retest of $60,000 level and beyond this month before it goes on to all-time-highs.
Disclaimer: This article was authored by Giottus Cryptocurrency Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.