Altcoins rally and Bitcoin holds above $28K as all eyes focus on the Fed
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(Kitco News) - Global financial markets trended higher on Tuesday as the efforts by governments across Europe and in the U.S. to stabilize the banking system have helped to calm the fears of investors, who have now shifted their attention towards tomorrow’s interest rate announcement from the Federal Reserve.
The major stock market indices extended their winning streaks to two days, with the S&P, Dow, and Nasdaq all managing to sustain the momentum from Monday and finishing the day in the green, up 1.34%, 0.94%, and 1.65%, respectively.
Data provided by TradingView shows that Bitcoin (BTC) bulls continued to guard the support at $28,000 and, at one point, attempted to push its price higher but met stiff resistance at $28,600, resulting in a price pullback to $28,200.
BTC/USD 4-hour chart. Source: TradingView
Senior technical analyst Jim Wyckoff of Kitco said that “April Bitcoin futures were firmer in early U.S. trading after hitting a contract high Monday.” He added that “Bulls have the solid near-term technical advantage amid a fledgling price uptrend in place on the daily bar chart,” and suggested that “More upside is likely in the near term.”
Retail traders helped fuel the Bitcoin rally
According to the latest Bitfinex Alpha report, “The recent surge in BTC price beyond the long-term range high is a promising sign for the cryptocurrency market. Order flow and on-chain data indicate that this increase in price beyond the range high can be attributed to spot buying by both larger and smaller-sized investors and traders.”
Evidence that there has been an influx of smaller traders can be found by looking at the number of new wallets with non-zero balances on the Bitcoin network, with nearly one million such wallets coming online in less than a month to bring this metric to a new all-time high of 44.778 million in March.
“The recovery of these metrics is a positive indicator of the network’s growing adoption,” Bitfinex said. “However, it is essential to note that the entry of new market participants and spot buying are typically associated with the early stages of a bull market or the later stages of a bear market. Therefore, it is prudent to wait for confirmation that the breakout from the 273-day range is sustained before engaging in market purchases of BTC.”
BTC/USD 6-hour chart. Source: Bitfinex
Bitfinex highlighted that large investors were the ones primarily accumulating Bitcoin at “sub-$18,000 levels,” but the 50 percent increase in price has attracted a new cohort of buyers, which “bodes well for the long-term health of the BTC market.”
Overall, the analysts at Bitfinex feel that the worst of the crypto winter is now in the past, and how things go moving forward will likely depend on developments out of the Federal Reserve and what it decides to do in regard to interest rates.
“Even though macroeconomic uncertainty continues to overshadow any positive sentiment, even for crypto prices, headline year-over-year inflation is moderating and the Federal Reserve moving towards pausing it’s rate hikes in due course, is certainly an indication that we are on a road to stabilization, however bumpy,” the analysts concluded.
Altcoins rally as BTC consolidates
A common sight after Bitcoin goes on a significant run and then enters consolidation is for there to be a rally in the altcoin market – often referred to as “altcoin season” – which gives high-quality projects a chance to catch up to the performance of the top crypto.
Daily cryptocurrency market performance. Source: Coin360
XRP appears to be leading the currency altcoin rally, with a 25.29% gain on Tuesday as traders position themselves ahead of a possible victory for Ripple in its ongoing court case with the Securities Exchange Commission (SEC). XRP holders have gotten more bullish on the token's prospects after the judge on the case dealt the SEC a blow by removing its primary witness that was scheduled to testify about the perceptions of a reasonable XRP purchaser.
Other notable gainers on Tuesday include a 22.38% increase for Joe (JOE), a 15.1% gain for BrainTrust (BTRST), and a 13.65% increase for MAGIC (MAGIC).
The overall cryptocurrency market cap now stands at $1.18 trillion, and Bitcoin’s dominance rate is 46.1%.