Market Wrap: Bitcoin Consolidates as Altcoin Season Heats Up
Bitcoin’s rally is taking a breather as altcoins outperform.
Bitcoin BTC traded sideways on Monday and is holding support above the 200-day moving average of about $46,000. The cryptocurrency was changing hands at around $48,000 at press time and is roughly flat over the past 24 hours. Analysts expect bitcoin to remain rangebound heading into the end of the month as investors show a strong preference for altcoins.
“BTC price continues to hover above its 200-day moving average with the bulls still in play,” Lukas Enzersdorfer-Konrad, chief product officer at crypto trading platform Bitpanda, wrote in an email to CoinDesk.
Improving blockchain data is one reason why bulls remain active above support levels.
“Fundamental factors have improved in recent weeks as the hash rate has now recovered to early June’s levels, indicating that miners are coming back online after China shut down its activities,” Enzersdorfer-Konrad wrote.
Enzersdorfer-Konrad also pointed to the recent surge in altcoins as bitcoin consolidates, which could reflect an appetite for greater risk among investors.
The “alt-season index,” which tracks the relative performance across cryptocurrencies over the past 30 days, shows a clear skew toward altcoins. On a yearly basis, however, altcoin performance still has some room to catch up to bitcoin, as shown in the chart below.
Bitcoin accumulation demand
Blockchain data shows large accumulation demand for bitcoin, which underpinned the recent relief rally.
The “bitcoin price is currently sitting at the top end of a strong on-chain support zone,” Glassnode tweeted on Monday.
The chart below shows bitcoin’s realized price distribution. Each bar represents the number of existing bitcoin that last moved within the specified price bucket. The green-shaded region shows strong accumulation support in the $31,000 to $40,000 price range.
More than 1.6 million BTC now have a cost basis within the $45,000 to $50,000 range, which has also experienced accumulation, according to Glassnode data.
Investors add to altcoin funds
Bitcoin investment products recorded their eighth consecutive week of outflows, totaling $3.8 million, but altcoin funds continued to attract fresh capital, a report Monday showed.
Overall, crypto funds netted inflows totaling $24 million during the week ended Aug. 27, down about $3 million from the prior week, according to the report by digital asset investment manager CoinShares.
Funds focused on the cardano altcoin saw inflows totaling $10.1 million over the past week as the price of cardano has doubled over the past month.
Dogecoin volume drops
Dogecoin’s DOGE trading volume on the Coinbase exchange has been lackluster in August as buyers appear to be taking a breather. The cryptocurrency is up about 30% over the past month, compared with a 16% gain for bitcoin over the same period. Earlier this month, DOGE stalled near the $0.35 resistance level as the broader crypto market experienced a pullback.
Lower trading volume in DOGE has been positively correlated with fewer purchases than sells on the Coinbase exchange over the past few weeks.
“Buy ratios for altcoins remain elevated overall,” Coinbase wrote in a newsletter to institutional clients on Friday. In “ICP (light gray) we saw the buy ratio oscillating between 18%-75% also reflecting more aggressive risk taking first and profit taking around August 20th.”
- SOL Hits Record High: Programmable blockchain Solana’s SOL token crossed the $100 mark on Monday, drawing a three-figure price for the first time, CoinDesk’s Omkar Godbole reports. The cryptocurrency ranked eighth largest by market cap, ahead of polkadot and stablecoin USDC, and is trading just short of the record $101 registered during Asian trading hours, CoinGecko data show. SOL has more than doubled in the past two weeks, largely on the back of the boom in decentralized finance (DeFi) and non-fungible tokens (NFTs).
- Avalanche Added to DeFi Exchange Aggregator OpenOcean: Avalanche is the latest base layer to be added to DeFi aggregator OpenOcean, CoinDesk’s Jamie Crawley reports. OpenOcean connects decentralized and centralized exchanges on its supported networks, automatically seeking the best trades. The site has processed more than 970,000 transactions since its launch in last September and claims to have 270,000 active unique addresses, a rough proxy of users in the pseudonymous world of DeFi. Avalanche and its native AVAX token have surged in recent weeks as DeFi users look to get a slice of $180 million in incentives on Benqi, SushiSwap and other decentralized lending platforms.
- DeFi Protocol Cream Finance Hacked (Again): Cream Finance, a DeFi lending protocol, suffered its second flash loan attack this year, with the perpetrators draining more than $25 million, CoinDesk’s Eliza Gkritsi reports. The attack was first reported by PeckShield in a tweet early on Monday. The blockchain security firm pointed to Ethereum records showing at least $6 million were drained at 5:44 UTC.
Most of the largest digital assets ended up on the day.
Notable winners of 21:00 UTC (4:00 p.m. ET):
- sol (SOL) +16%
- terra (LUNA) +5.8%
- internet computer (ICP) -4.5%
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