Market news and analysis: Which cryptos won and lost in Q1?
Will bitcoin soon have a spring in its step?
Bitcoin put in a dismal performance in the first quarter, particularly in March, and left even die-hard fans disappointed. After all, the cryptocurrency was created to help preserve value in times of crisis. Instead, it proved to be a poor safe haven and declined along with equities as the coronavirus outbreak hit.
However, a ray of sunshine may be on the way for investors, as the often-bullish second quarter is upon us.
Historical data shows that cryptocurrency has put in a positive performance in the April to June period in five out of the last six years. Notably, the 161 percent rise seen in Q2 2019 is the third-biggest quarterly gain of the last five years.
History could well repeat itself this spring as many analysts believe the massive money-printing efforts from global governments and monetary authorities amid the Covid-19 pandemic will boost bitcoin's allure as an inflation hedge.
In theory, by reducing the amount new bitcoins released into circulation every 10 minutes or so, the halving should juice the price, assuming demand stays constant. But unusual turbulence calls that assumption into question.“It’s still a tiny space with low liquidity all over crypto. I honestly have my eyes on hashrate and think a lot about how the halving effect will look this time,” said Henrik Kugelberg, a Sweden-based over-the-counter trader.
As Crypto Prices Reeled in Q1, These Coins Stood Out
A few cryptocurrencies, including the privacy coin dash and link, the native token of decentralized oracle network Chainlink, managed to put in a positive performancein Q1. The most terrible performers, NEO and VET, show thin volumes compared to traditional assets like stocks and bonds. Because of this, ascribing market movements to fundamentals remains a tricky exercise in this young, speculative market.
Online Black Markets’ Bitcoin Revenues Take a Hit
Darknet markets are websites that facilitate the sale of illegal goods, usually drugs, counterfeit currencies and weapons. "Historically, darknet markets’ revenue (value of bitcoins sent to dark markets) has had a weak inverse correlation with bitcoin’s price," according to Chainalysis. That relationship, however, has reversed over the last two months, as seen in the chart above. That's surprising, as one might think dark markets would see a jump given increased stress currently.
LISTEN: Months in the Red
Hosts Adam B. Levine and John Biggs talk about the performance of various markets including bitcoin, the probability of $10,000 for 1 BTC and food for thought on the upcoming May halving.
Trend: Bitcoin jumped 3 percent to $6,750 overnight as equity markets across the globe continued to suffer losses on fears that the coronavirus pandemic would push the global economy into a hard recession.
While the top cryptocurrency has decoupled from traditional markets, it remains trapped in a contracting triangle. The bulls attempted to penetrate the top end of the pennant, currently at $6,753, early Thursday, but failed. As a result, the immediate bias remains neutral.
A UTC close above $6,753 would confirm a pennant breakout and open the doors for a rally to $8,000. Prices falling out of the pennant would shift risk in favor of a drop to $5,000.
Pennants, however, are continuation patterns and usually extend the preceding bullish move. Hence, a breakout looks the more likely way forward.
Bitcoin Stuck In Bearish Trend As The New Month Begins (Forbes) Bitcoin is down more than 40% from mid-February which is still following a downward trend, and could suffer additional losses, according to several analysts.
– Sebastian Sinclair, Journalist
Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
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