- Ether, Solana and a host of other so-called “altcoins” staged a remarkable comeback, clocking double digit rebounds before retracing slightly.
- Altcoins have outperformed Bitcoin’s gains in the past several days, suggesting that some degree of speculation may be creeping back into markets, but that performance may also be somewhat illusory.
Global risk markets may be on edge, but there are signs that cryptocurrencies may have found a tentative bottom.
Whilst it’s probably too early to say that a durable rally in cryptocurrencies is on the cards, Bitcoin has come its closest to US$23,000 since June and the overall market cap of the industry has recovered to US$1 trillion.
Ether, Solana and a host of other so-called “altcoins” staged a remarkable comeback as well, clocking double digit rebounds before retracing slightly.
But investors looking for Bitcoin to reach exit velocity will be disappointed that the benchmark cryptocurrency is still struggling to break free from its US$19,000 to US$22,000 range, even though a lot of leverage has already washed out of the system.
Nevertheless, some believe that a sustained break over US$22,000 could renew speculative momentum, and possibly provide a fresh floor, especially given that expectations of aggressive U.S. Federal Reserve rate hikes have dialed down somewhat.
Ether remains a strong outlying performer, extending a rally that started earlier last week after developers of the Ethereum blockchain finally provided a target date for the much-anticipated software upgrade known as “The Merge” and that would make securing transactions far more energy efficient.
Altcoins have outperformed Bitcoin’s gains in the past several days, suggesting that some degree of speculation may be creeping back into markets, but that performance may also be somewhat illusory.
Thinner liquidity means that lower levels of buying are sufficient to move prices significantly in either direction for many altcoins.
