This Coin Is Leading The Cryptocurrency Market Higher

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Is Ethereum the One Actually Leading the Market Instead of Bitcoin?

In This Article

Ethereum BUY NOW is the No. 2 ranked cryptocurrency based on its market capitalization. Therefore, the general consensus is that it leads the altcoin market. Once Ethereum Blockchain is a digital ledger that’s used for storing data on several servers across the world in a decentralized, trustless. More goes up, altcoins usually follow suit.

In addition, it has often been assumed that when the market cap is going up, Bitcoin BUY NOW increases at a faster rate than altcoins, while when the market cap goes down, altcoins decrease at a faster rate. This would make Bitcoin the leader of the market.

However, well-known trader @CryptoCapo presented another idea. He stated that the Ethereum price and the total cryptocurrency market capitalization are correlated positively. This means that as one moves upward the other will follow, and the same stands true for downward movement. This is an interesting claim, since as we stated above, the consensus is that the BTC price is the one that leads the market, rather than Ethereum.

$ETH and #crypto total market cap have now a positive correlation.

This means that $ETH ”lead” the market now. When prices goes up, it’s better to long ETH. When prices does down, it’s better to short ETH (compared with $BTC) pic.twitter.com/X07QayZvDk

Below, we will compare the Ethereum price movement alongside the total cryptocurrency market cap in order to determine if it is the one actually leading the market.

Ethereum vs. Crypto Market Cap

The comparison is done using the Ethereum/BTC pair. Therefore, when we say Ethereum is increasing, it means that Ethereum is increasing at a faster rate than Bitcoin. The same remains true when we say that Ethereum is decreasing.

In the image below, the periods in which ETH and the crypto market cap have a positive correlation are shown in green, while when the opposite is true the color is red.

Ethereum Chart By Trading View

  • Jan. 1, 2020 – June 26 = Market cap up, ETH down
  • June 26 – Sept. 5 = Market cap down, ETH down
  • Sept. 5, – Nov. 5 = Market cap down, ETH up
  • Nov. 5, 2020 – Feb. 16, 2020 = Market cap up, ETH up
  • Feb. 16, – Now = Market cap down, ETH down.

Therefore, since the beginning of 2020, the current time period is the longest in which the two have been positively correlated. This occurrence began on Nov. 5, 2020 and has been going on for the past 131 days.

This does not mean that holding Ethereum is more profitable than holding BTC. As we can see in the image above, when the market cap has gone down, the Ethereum price has decreased at a slower rate than Bitcoin. However, it would be more profitable to long Ethereum when the market cap is going up than to long BTC, which has been the consensus until now. It is yet to be determined whether this correlation will continue in the future.

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To conclude, if the current correlation between the total crypto market cap and Ethereum continues to hold, the price of Ethereum would be the one that dictates the direction of the market’s trend, rather than that of Bitcoin.

Top cryptocurrencies to invest in spring 2020: keep your eyes wide open on these coins

Cryptocurrencies are the future of money. We all say it, and we all believe it. However, that does not make it easier for most people to start using or investing in them. The fact that there are over 2,000 cryptocurrencies currently available to traders and investors makes it even harder to know the best ones to bet your money on.

Investors and traders, especially new market entrants, find it hard to choose the top crypto coins to invest in. This is because the market changes, and different cryptocurrencies peak for various reasons.

In this article, we discuss the best cryptocurrency to invest in spring 2020 and possibly beyond. These digital coins have strong fundamentals, which could propel them to perform well before this year comes to an end.

General crypto market overview

2020 has been an exciting one so far for the cryptocurrency space and the financial markets in general. The coronavirus (COVID-19) outbreak has been the primary topic of discussion so far this year, and it has affected several economies around the world.

In the cryptocurrency industry, most people believe the bear market is over as BTC price has been hovering around the $10,000 mark for the past few weeks. The Bitcoin mining reward halving in May is another highly anticipated event. In terms of adoption, cryptocurrencies have been gaining momentum globally.

Recently, the Indian Supreme Court overturned the ban on cryptocurrencies put in place by the Reserve Bank of India (RBI) in 2020. This means cryptocurrencies can now be available to millions of people in India.

Also, the central bank-issued digital currencies (CBDCs) have been highly discussed in the mainstream media. The US Federal Reserve is already researching the use of blockchain technology and is being advised to explore the possibility of developing a digital dollar. Other countries looking to develop their CBDCs include Japan, Russia, England, China, Sweden, Ukraine, the Marshall Islands, and others.

Facebook’s Libra project has also witnessed several changes in recent months, with companies such as Visa, MasterCard, Vodafone, and a few others leaving the project. However, it is still unclear if the cryptocurrency would be launched in the second half of the year.

Top cryptocurrencies to invest this spring

With so many things currently affecting the cryptocurrency landscape, it gets harder to choose the best digital currencies to buy now.

So, here is our list of the top cryptocurrencies to invest in spring 2020.

Bitcoin (BTC)

When you ask the question, “what’s the best cryptocurrency to invest this spring?” the answer Bitcoin comes to mind. BTC is the first cryptocurrency to be developed and remains the largest by market cap. It remains the first crypto people look at when venturing into the crypto space.

These are the main factors to consider before investing in the cryptocurrency market

Investing has never been easier now that on-chain metrics enable market participants to determine who is on the other side of the trade. While this is only possible in the cryptocurrency market, IntoTheBlock maintains that this data can empower investors worldwide.

The power of on-chain metrics

Contrary to popular belief, one of the biggest advantages of the cryptocurrency market is transparency. Through on-chain analytics anyone can determine how many investors are in a given asset, when they bought, and what their cost basis is. These key datasets are essential to determine which digital asset to invest in.

IntoTheBlock uses machine learning and statistical modeling to provide a view of a crypto asset’s profitability and “capital stack.” Bitcoin, for instance, is a great example of decentralization, which makes it ideal to consider as an investment vehicle, according to the firm.

The flagship cryptocurrency only has one “ whale ” that holds 1.4 percent of its circulating supply. This address has approximately 255,100 BTC and belongs to Singapore-based cryptocurrency exchange Huobi. The other 98.6 percent of the total Bitcoin in circulation is distributed among investors and retail investors. The former holds 10.1 percent while the latter keeps 88.5 percent.

Bitcoin’s Concentration by IntoTheBlock

Not only Bitcoin is decentralized, but the amount of holders in the network is at all-time highs, according to IntoTheBlock.

The “Ownership by Time Held” model estimates that nearly 30 millon addresses have a balance in Bitcoin. Currently, almost 63 percent of those addresses are holding 10.8 million BTC for more than a year. This represents a 23.7 percent growth since last year.

“To give you more accurate information about this… we can see that the number of Bitcoin’s that hasn’t been moved in over 5 years is up from 3.6m BTC on April of 2020 to 3.95m BTC on April of this year.”

Other assets such as Maker do not provide the same levels of decentralization as Bitcoin and most of its investors will be in the red if they were to sell their tokens today.

In fact, IntoTheBlock’s “Global In/Out of the Money” model shows that 89 percent of the addresses holding MKR are losing money while only 3 percent of addresses are “in the money.”

Maker’s Global In/Out of the Money by IntoTheBlock

On-chain metrics also reveal that of the 57,520 addresses holding Maker, just 13 of them control almost 65 percent of the circulating supply. And, there is one address that holds nearly 25 percent of the circulating supply.

IntoTheBlock maintains that this could suggest that if anyone were to buy MKR, there is one major address would probably be the one dumping their tokens at a profit.

Maker’s Whales vs. Investors by IntoTheBlock

The ability to determine how centralized an asset is, how large holders can manipulate its price, or how confident investors are is only possible with this new asset class. Although this is not enough data to consider whether or not a given cryptocurrency provides a good investment opportunity, counter-party analysis makes this decision easier.

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