It was last weekend that the price of bitcoin surpassed $12,000 for the first time in a year, only to come crashing back down to $10,500 minutes after. A week after that and we haven’t achieved that level yet.
Sure, bitcoin futures contracts on CME hit $12,000 briefly this week, but on the spot market, we remain elusive of the level that is expected to take BTC back to June 2019 high $13,900.
For now, $12k might take some time as analyst Mati Greenspan said, “Personally, I think it would be nice if the bitcoin price would cool down a bit into a more sustainable rally, for example experiencing a bit of a retracement before blasting through $12,000 sometime next week.”
A similar opinion was voiced by Matt Maley, chief market strategist at Miller Tabak & Co, who says the best thing to happen right now for bitcoin is to go back down a bit and then “successfully test that support level and bounce off that. You get that kind of move, and it’s going to be very bullish.”
However, the 29% uptrend by bitcoin in the past 20 days has the mainstream media talking about bitcoin mania being back almost in full bloom.
According to investors, a collapse in real yield, return once inflation is taken into account, on government bonds is what is driving “everything rally.” Not to mention “QE addiction,” in which the Fed will need even greater stimulus to prevent the market from falling.
It’s DeFi Time!
While bitcoin action has been a bit subdued, altcoins took this opportunity to record some gains. Ether continues to make its way to $400 while Tezos is up 7% which trader Jonny Moe says “after nearly 6 months of consolidation (…) finally looks ready for more,”
Even Litecoin might get to see some movement as analyst Rekt Capital notes, “Litecoin is once again peaking past its multi-year downtrend. BTC and ETH have already confirmed new bull markets. A Weekly Close above the multi-year diagonal confirms a new bull market for LTC.”
However, the top performers of the market are none other than the same old DeFi tokens that have been rallying hard throughout 2020.
No surprise there, given that the DeFi space continues to be a hot sector as seen in the record $4.5 billion total value locked in it, as per DeFi Pulse.
Also, yield turning negative in the real world is not only driving the assets higher but also these DeFi projects, which offer interest ranging from 7% to 35%.
“So you can imagine in a ZIRP [zero interest-rate-policy] environment, people are pretty excited,” said Meltem Demirors of CoinShares. What the giant decentralized risk market, “seeing is people chasing liquidity,” she said.
Additionally, it might just be the perfect environment for the decentralized space to thrive.
Could not be a more timely start for Web3 and DeFi to take off. https://t.co/qNXBjYmckB
— Z (@SplitCapital) August 7, 2020
Who’s the Winner?
It’s a no brainer either that the hottest coin of 2020 is back onto making new highs. LINK didn’t waste any time to fly just as bitcoin took a breather.
The 8th largest cryptocurrency by market cap of over $4 billion is up 22%, trading at a new high of $11.82. This ATH came after six green candles in a row on the 4-hour chart with sight at yet new high at over $12.
“Bubbles are mathematically impossible in this new paradigm. So are corrections and all else,” said trader Hsaka about the unstoppable rally of LINK.
This has been despite Zeus Capital trying its hardest to prove LINK a scam and crash it.
Wait, did Zeus/Nexo actually put their money where their mouth is and short $LINK heavy? It wasn’t a psyop to engineer an infinite bid? Holy shit
— Hsaka (@HsakaTrades) August 8, 2020
Other DeFi winners include Akropolis (31.79%), Melon Protocol (27.18%), Balancer (23.46%), Kava (23.40%), ThorChain (18.11%), and Aave (11.21%).