As Bitcoin edges closer to the $40,000 trading zone, we are seeing notable rallies in the altcoin market. In the last 24 hours, the altcoin market capitalization has regained its trillion-dollar status as it rallied from approximately $967 billion to currently stand at $1.04 trillion as of the time of this writing, representing a 7.56% gain.
The cryptocurrency market is at an impasse as many traders view Bitcoin’s price decline in January as a sign that a cryptocurrency bear market is beginning, yet there is increasing news of adoption and multi-million-dollar financing rounds continue to make headlines on a regular basis.
As Bitcoin trades towards the $40,000 trading zone, analysts are highlighting the current price action as a possible buy zone and this bullish sentiment is also spilling into the altcoin market.
What you should know
Yesterday, tokens like DerivaDAO, Telos, Bonfida and Safemoon have all posted gains of 20% and above in the last 24 hours. There has also been an increase in trading volume. For example, DerivaDAO, a decentralized exchange for derivatives that operates on the Ethereum network saw a 3,692% increase in its trading volume in the last 24 hours.
Another example will be Telos, a blockchain network created with EOSIO software, designed to bring speed and scalability to smart contracts for decentralized finance (DeFi), nonfungible tokens (NFTs), gaming and social media, saw its trading volume increase by 288% as its market capitalization hit a quarter billion.
Among the top 20, we are seeing notable rallies in Crypto.com’s CRO token and the Avalanche blockchain’s native token AVAX. They have both rallied 24% and 23% respectively, in the last 7 days.
We are also seeing significant rally in P2E and metaverse related tokens over the past week. Decentraland’s MANA token, Sandbox’s SAND token, Axie Infinity’s AXS token all rallied 43%, 46% and 14% respectively over the last 7 days.
Although the macro-economic outlook for the cryptocurrency market seems grim due to the current hawkish stance of the United States’ federal reserve, coupled with news that the White House will issue an executive order in relation to cryptocurrencies in the coming days and the IRS stating that cryptocurrencies and NFTs as “ripe for fraud, including money laundering, market manipulation and tax evasion, “there seems to be light at the end of the tunnel as we are seeing whales mopping up Bitcoin supply on centralized exchanges. According to On-chain analytics expert, William Clemente, he revealed there is still a lot of interest in Bitcoin as an asset class. He stated, “Despite the price decline, 76% of Bitcoin’s supply is currently held by strong hands. A multi-year high.”