Market Wrap: Altcoins Outperform Bitcoin, Traders Cautiously Await Breakouts
Recent price bounces have lacked conviction among crypto traders, especially in the futures market.
Bullish sentiment is returning to crypto markets after a sluggish start to the year. The recent outperformance of alternative cryptocurrencies (altcoins) indicates a greater appetite for risk among traders.
Bitcoin (BTC) and ether (ETH) were down 1% over 24 hours, compared with an 8% rise in Cardano's ADA token and a 3% jump in dogecoin (DOGE). Meanwhile, LRC, the native token on the Ethereum scaling network Loopring, rallied as much as 34% after the blockchain project shared an update on its partnership with GameStop (GME).
Some analysts expect crypto prices to remain elevated over the short term, albeit in a higher range. That means a relief rally could be short-lived. For reference, BTC's prior range between $30,000-$40,000 earlier this year preceded the current range between $40,000-$45,000, indicating a decline in selling pressure.
"There will be an upper limit to prices of risk assets, depending on how big [Federal Reserve] rate hikes will be," Justin Chuh, a trader at Wave Financial, said during an interview with CoinDesk. Chuh also mentioned that some traders have not been picking price bottoms. Instead, traders have been unwinding downside hedges and selling volatility contracts as prices stabilize, according to Chuh.
From a technical perspective, short-term indicators are improving for bitcoin. "We expect recent highs near $45,000 to soon be cleared as a positive catalyst," Katie Stockton, managing partner at Fairlead Strategies wrote in a report. "A breakout earlier this month suggested bitcoin has upside toward $51,000."
Latest prices
●Bitcoin (BTC): $42,334, −0.36%
●Ether (ETH): $2,978, −0.81%
●S&P 500 daily close: $4,456, −1.23%
●Gold: $1,947 per troy ounce, +1.38%
●Ten-year Treasury yield daily close: 2.32%
Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price.