Crypto market seems to be quite resilient - what can we attribute to reduced price fluctuations? In one week's time only Litecoin and Decentraland have increased significantly, what has helped the altcoin?
While it feels like the calm before the storm in the cryptocurrencies market, few projects are on the rise. Although there are reasons behind the current state of the crypto market and every single green candle during this period of time. Let’s dwell deeper and discover those reasons!
Bitcoin itself is in a quite crucial spot. Traders aren’t fully convinced it is the time for correction for the King of the crypto market. In effect this brought us to this slow bleed price action, without major volatility. Until we see the decisiveness and more conviction in the market, the altcoins will suffer as well, as people sell them to avoid being trapped underwater (owning a certain asset, which costs below the price of buying) for a longer period.
First and most important is obviously Litecoin, the so-called “silver of the crypto market”. For the newcomers it might look like just another price spike. The real reason for LTC getting volatile is the incoming event of Litecoin halving, which cuts the rewards in half, which in this case are the only supply of LTC.
Therefore, similarly to Bitcoin, this crypto asset stays loyal to its own price cycle. Decreasing of the supply quickly can result in higher demand, which eventually turns into price soaring up. As the traders and investors are well-aware of this correlation, they tend to buy the Litecoin before the event itself, to overtake the major wave of the buyers in the days surrounding LTC halving.
We’ve also encountered major price spikes on assets under the narrative of metaverse and AI, like for eg. FET, AGIX and MANA.
During the periods of the indecisiveness of the market, most of the altcoins (every crypto asset except the Bitcoin) suffer, as the majority of the traders prefer to play it safe by staying out of them.
This leads many altcoins to enter the “discount zone”, but going further down isn't out of the question. If such a condition of the market is prolonged, the top trending assets are becoming a very tempting option for traders, as it may happen they just have caught the bottom of such a project, which may be a very lucrative trade.
Therefore in the last days we’ve seen several price spikes, but mostly on the altcoins following the top trends and narratives.
