At the time of writing this article, the king of cryptocurrencies has surpassed $29,800 and crossed the critical level of $29,700. Now, a period of greater volatility awaits. We have witnessed several periods of boring and shallow volatility in the cryptocurrency markets. Investors have gained experience based on the time they have spent in this market and most of them are aware of what will happen in the next phase.
Why Did Altcoins Rise?
Gordon Grant, the Director of Trading and Sales at Genesis Trading, highlights the rise of Livepeer (LPT) and Yield Guild Games (YGG). He says that it is significant for investors to speculate on these less popular altcoins when major cryptocurrencies lack volatility.
The price of Livepeer, the native token of a decentralized video streaming platform, increased by 33.9% last week, but it dropped by 3% to $5.35 recently. According to CoinGecko, Yield Guild Games (YGG) saw an increase of over 94% last week, but it experienced a 75% sell-off and is currently priced at $0.35. Blockchain detectives noted that DWF Labs transferred a large amount of YGG tokens to exchanges, indicating that they may have sold some tokens.
While significant price movements were observed in neglected altcoins, Bitcoin experienced the opposite. The price of Bitcoin remained stuck at $29,000 for a long time.
Why is Bitcoin Price Increasing?
As Gordon Grant expressed, unsustainable shallow volatility led to fluctuations in neglected altcoins. However, whenever Bitcoin’s price volatility reached historic lows, we witnessed significant movements afterwards. The same is happening now. Despite developments in the macro perspective and crypto news flow, Bitcoin’s price is rising as it escapes shallow volatility. If this surge fails to turn $29,500 into strong support, it may trigger a drop to $27,500 and $26,000. However, for now, the direction seems to be upward.
According to CCData, centralized crypto exchanges experienced a 12% decrease in spot and derivative trading volume in July, reaching the lowest level of the year at $2.36 trillion.
“The decrease in trading volumes can be attributed to the limited fluctuations in the price movements of major crypto assets throughout July, with Bitcoin and Ethereum trading in a narrow range.”
According to the Bitfinex Alpha report, Bitcoin is on the verge of an impending supply shortage.
“Recent data shows that an astonishing 69.2% of the total Bitcoin supply has remained untouched for over a year. The significant portion of idle Bitcoin supply leads to a decrease in the current supply in the market.”
Bitfinex analysts claim that this natural scarcity, combined with increasing demand, has the potential to drive prices higher.
