Bitcoin stands still and ethereum continues to break records

06.05.2021 |

Forecast rate ETH 06.05.2021

Over the past couple of weeks, bitcoin prices on online exchanges have settled in the same corridor between $52,000 and $57,000. Occasionally there are brief spikes in large sales or purchases, but the price quickly returns to its usual course. Adding almost 100% since the beginning of the year, this behavior seems somewhat anomalous. However, there is an explanation.

Ether and altcoins are rising

At the same time, Ethereum is setting new records. In seven days, prices have risen by more than a quarter, securing above $3,450. At the same time, other coins also show unprecedented growth, indicating a gradual change in the cryptocurrency market. While bitcoin always had the biggest price fluctuations before, now it is altcoins that have rushed upwards, overtaking their progenitor.

Currently, there is an influx of bitcoins to online exchanges. Only if before it indicated the desire of investors to get rid of a risky asset, now they buy alternative digital assets for Bitcoin. This partly indicates that investors are willing to take more risks for more profits, but on the other hand, there is society’s acceptance of blockchain technology, and prices may now be rising to levels that are fair in each case.

It is worth considering carefully before deciding whether to buy or not to buy an asset. While bitcoin is currently backed by major investors, who are able to invest more than 80% of their own capitalization, altcoins are only attracting interest among retail investors so far. This means that in case of a sharp break-down, there will be a mass closing of long positions, which will lead to an avalanche-like further collapse. Thus, if leverage is used in trading, you should take care to have enough liquidity to wait out sharp, short-term declines.

These articles are for informational purposes only and are not investment advice or warranties.