Crypto assets, still heralded by its largest coins by market cap Bitcoin and Ethereum, have now technically reversed the downtrend and started making higher highs in price again. I wrote about this attempted trend reversal a few weeks back, and some confirmation has now come in – at least for a part of the market.
The title of this post contains the word “possibly”, because of the larger coins, so far only Bitcoin and Ethereum have shown this dynamic. Admittedly, they are the two largest coins by market cap, and combine massive liquidity. However, to state that the whole crypto market is emerging from its winter hibernation might be premature. Important coins such as Binance coin, Ripple coin, Cardano, Polygon, Solana, Polkadot or Litecoin have not rallied above their early year highs as of yet. When trying to find bottoms, which one really shouldn’t, we have to be stringent in our analysis, and look for confirmation of moves.
Bitcoin and Ethereum are nowadays considered somewhat safe havens from troubles in the financial world similar to gold, the likes of which we have witnessed recently with Silicon Valley Bank, Signature Bank, First Republic Bank, Credit Suisse, and might yet see more of. This most likely catalyzed the recent move in these coins, and almost only in them.
Thus and as always, it is important to keep watching such a new development, as there are often fake-outs, wash-outs and volatility surrounding trend changes. Coins will be dealing with a lot of overhead selling pressure at rising prices, likely stalling or slowing advances.
Depending on one’s risk appetite, it might be prudent to await more confirmation before concluding the winter is over.
