Optimistic trends in the crypto marketApr 15, 2019
Absolutely all cryptocurrencies, with a capitalisation of more than $1 billion, completed the previous week in the red zone. But, although the market was bearish, there is no reason for panic. This reduction should be considered as a correction, after a robust growth the day before.
Bitcoin SV (BSV), Stellar (XLM) and Litecoin (LTC) became the outsiders of the week. All of them completed the previous week with a loss of more than 10%, but on Monday, we observe an increase in the prices of these coins. Bitcoin (BTC) and Binance Coin (BNB) ended the week with minimal losses.
Due to the IOTA (MIOTA) collapse by more than 15%, the capitalisation of this coin dropped to $0.875 billion. Thus, now there are 14 cryptocurrencies with a capitalisation of more than $1 billion.
Most traders and experts talk about a change in the global BTC trend, from downward to upward. There are a lot of opinions of various experts, investors and crypto enthusiasts in the network. Binance also prepared a reasonably large report, according to which, Bitcoin and most of the other altcoins reached the “bottom”.
The report focuses on several critical points that indicate a low level of expertise of market participants (traders and investors).
First, it should be noted that there is a so-called “herd mentality”. This was manifested in the late stages of a bullish trend. Since the beginning of this year, Bitcoin has grown by more than 40%, with three-quarters of this growth in April. A similar situation was observed in 2017 when in just one month the price of BTC rose from $5800 to $18200.
The “herd mentality” is also confirmed by the very high correlation between the prices of altcoins and BTC. More than a quarter of the time analysed by experts, the correlation was extremely high - more than 80%.
An increased correlation, more than 0.8, was observed for 513 days or more than a quarter of the entire sampling range from February 13 2014 to March 14, 2019. At the same time, the negative correlation was only 381 days, which is 1.3 times lower than the previous figure. Also, experts noted that at the time of an extremely high level of correlation, global changes in BTC trends occurred.
However, it is essential to bear in mind that the cryptocurrency market is very young, so the operating patterns today may not work in the future.
The report, however, stresses: “Given the short history of the crypto market, it may be premature to say that there is a causal relationship between peaks in correlation and market reversals, or if it’s actually a herding effect during the market reversals themselves.”
Rapid investments in blockchain startup
The blockchain startup Horizen Labs raised $4 million, in which took part VC firms Digital Currency Group (DCG) and Liberty City Ventures, as well as other independent investors.
The American startup was planning to raise $2 million, but the report indicates twice the amount of attracted investments for the first round.
Horizen Labs will build “inexpensive, time-efficient and customizable” blockchain business solutions with investments on the already patented sidechains-as-a-service platform. This platform eliminates the need for organisations to spend their resources on development and allows faster deployment of existing systems using pre-built functional side chains.
“We have seen considerable demand from customers and businesses for custom blockchain solutions that are not expensive and time-consuming to build,” said Horizen Labs CEO Robert Viglione. The Sidechain-as-a-Service platform will provide Horizen customers with the “high-level security of Horizen, a privacy-focused blockchain platform with the largest node network in the industry,” Viglione said.
It is not the first blockchain startup attracting much more investment than planned. This points to the rapid development of blockchain technologies, the cryptocurrency market and interest in general.