Altcoins Begin Rally After Bitcoin Hits $40,000
The price of Bitcoin (BTC) recorded a fresh all-time high of over $40,000 on January 7, after the price rallied by over $5,000 in less than a day. The level of $40,000 is a psychological barrier and perceived as a considerable landmark for the top-ranked crypto. As per Matt Blom, chief of international sales trading at Equos:
“Bitcoin’s march to $40k has been driven by fresh capital from huge hedge funds, corporate treasuries and awareness from the investing public that all is not well in the world of fiat. It’s easy to forget that we are still in the very early stages of adoption.”
Blom further advised investor to avoid guessing the top and should continue riding the trend.
Soon after Bitcoin touched $40,400, it came across considerable selling pressure that resulted in a sharp decline in price to about $36,600 before bulls entered to capitalize on the steep downtrend.
In the last 24 hours, Bitcoin’s volume recorded a fresh all-time high of $82.40 billion and several top cryptocurrency exchanges faced connectivity problems. Some even went offline for a while. Conventional markets also rallied as the US Congress endorsed Joe Biden’s victory, with Democrats taking control of both houses of Congress.
The S&P 500, Nasdaq 100 and Dow Jones Industrial Average ended the trading day with gains of 1.42%, 2.37% and 0.71%, respectively. The 10-year government bonds have also gained strongly above the 1% level, trading at $1.076.
Bitcoin’s rally above $40,000 pushed its dominance level to 69.1%, but did not have any negative impact on altcoin prices. Prominent movers include XRP, which gained 38.59% to $0.35 in the last 24 hours. The price of Ether (ETH) also rallied further, recording a fresh 2020 high of $1,282 as the number one altcoin in terms of market cap moves towards its all-time high of $1,400.
Other prominent gainers in the last 24 hours include Year.finance’s YFI and Nano, which have recorded increases of 20.93% and 77.33%, respectively. While several analysts forecast further rallies in Bitcoin, cryptocurrency trader and analyst Scott Melker suggested cautious approach. He said:
“Beyond being a psychological level and a round number, I don’t view 40K as particularly significant. From a technical perspective, there are no resistance ahead – just blue skies because Bitcoin is in parabolic price discovery. The expectation would certainly be that a major correction will eventually come, but it is a fool’s errand to try to time it or to assume that an arbitrary number like 40K will be the top.”