Cryptocurrencies Attempt New Rally as Bitcoin Tests $7,600
Crypto assets advanced on Thursday, recouping from an earlier loss as bitcoin and the major altcoins set their sights on a corrective rally.
After a failed rally attempt on Wednesday, cryptocurrencies were back on the offensive 24 hours later, with the total market peaking near $334 billion. That’s broadly consistent with the two most recent peaks set on Tuesday and Wednesday.
Bitcoin prices reached a high of $7,596.02, having gained more than 3%. The bulls are eyeing a breach of the $7,800-$7,900 level for confirmation of a reversal.
The altcoin asset class rallied above $203 billion, gaining $10 billion from the previous day’s low. Cardano, Stellar and IOTA led the advance.
However, the rally may have limitations as trade volumes remain abnormally low. Crypto transactions averaged just over $16 billion on Thursday. At this time last month, the crypto market was turning over close to $30 billion per day.
Bitcoin’s Dominance Over Cryptos to End Soon: Ripple CEO
Ripple CEO Brad Garlinghouse told CNBC Wednesday that bticoin’s influence over the cryptocurrency market will likely weaken over time as digital assets mature. Until now, crypto assets have been highly correlated with bitcoin, but the so-called ‘bitcoin dominance index’ has declined significantly since the bull market began in early 2017.
“There’s a very high correlation between the price of XRP and the price of bitcoin, but ultimately these are independent open-sourced technologies,” Garlinghouse said. “It’s early, over time you’ll see a more rational market and behaviors that reflect that.”
He added: “It’s still a nascent industry, the speculation in the market dominates the trading activity. I think it’s a matter of time until people better understand the different use cases.”
Ripple’s XRP provides an alternative use case to many of the decentralized crypto assets on the market today. XRP has been called the ‘banker’s cryptocurrency’ for its integration with traditional finance as a liquidity and transaction platform.
One year ago, bitcoin accounted for more than 45% of the total cryptocurrency market. If you go back 17 months, BTC accounted for more than 90% of the total capitalization. Bitcoin’s share of the total typically declines during a bull market and increases when appetite for coins falls. For example, its share surged past 45% during the most recent swing low in early April.
Garlinghouse has described himself as a believer in bitcoin, but that XRP ultimately has more utility due to its superior transaction capacity. He has also vehemently defended XRP as a utility rather than a security despite speculation that it could be the latter.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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