Why cryptocurrencies have risen sharply?

Over the past week, the cost of several of the largest altcoins in terms of capitalization at once has grown by 30% and more. XRP and Stellar are up 106% and 79% respectively. However, it is not too late to invest in coins, experts are sure.

In the second half of November, the share of bitcoin in the digital money market dropped to 62.3%. This is taking place against the backdrop of an active growth in the value of altcoins, many of which have risen in price by tens or even hundreds of percent in a week. From November 18 to 24, the price of BTC climbed 13%, while Ethereum rose 29% and XRP rose 106%. Other largest digital coins by capitalization also surpassed Bitcoin in terms of profitability over the specified period of time. For example, the Bitcoin Cash rate in 7 days grew by 31%, Cardano – by 42%, Stellar – by 79%.

“Altcoin season is already underway”

The simplest explanation for the current price dynamics in the altcoin market is deferred demand, explains Yuri Mazur, head of data analysis at CEX.IO Broker. Bitcoin rose to almost an all-time high, and altcoins from mid-September to mid-November grew very slightly relative to bitcoin, the expert is sure.

“Now investors and traders have decided that it is possible to invest in altcoins, the growth potential of which was very high from the point of view of the graph at the time of the explosive growth. I think it would be quite legitimate to call this time the season of altcoins,” Mazur emphasized.

According to Mazur, it is now advisable for crypto investors to form a portfolio of different altcoins, since many of them are still very far from their historical highs. The specialist also draws attention to the continuing interest in bitcoin, the high demand for which is one of the main drivers of growth in the value of altcoins. The incipient upward trend among altcoins potentially has every chance of being comparable in intensity with the current upward trend in bitcoin, the expert said.

“Altcoins May Approach Highs”

Denis Voskvitsov, the head of the fintech company Exantech, added that retail buyers are now entering the market, for many of whom the price of bitcoin is already too high to enter. At the same time, against the background of BTC, other cryptocurrencies are still cheap, even after leaps by tens and hundreds of percent in the last week.

“In recent years, the news background was mainly associated with bitcoin, now the time has really come for altcoins. Despite the proximity of bitcoin to the highs of December 2017, the mood of the cryptocurrency markets is now at the end of 2016, when the era of altcoins and mass mining. Altcoins have just started their upward movement and before Christmas they can approach their historical highs,” Voskvitsov predicted.

He warned that a correction could start after the rally. Judging by the 3% drop in the bitcoin dominance index per day, an interesting dynamic awaits us around alternative cryptocurrencies, the expert suggested. According to him, coins worth a few cents can show the greatest growth in percentage terms, since psychologically non-professional investors are more comfortable thinking that the theoretical benefit from the growth of such an asset can be significantly higher than from coins worth hundreds of dollars.

“We must buy a scattering of coins”

The head of the Six Nines data center Sergei Troshin named several factors that influenced the growth of altcoins. For example, the change of administration in the White House, from which investors expect more generous monetary anti-crisis stimulus, but at the same time – liberalization of the policy towards the crypto market. Citigroup Bank predicted a 20% devaluation of the dollar next year, which further increases the popularity of cryptocurrencies, the expert is sure.

He added that some altcoins have grown significantly faster than bitcoin due to their high historical volatility and lower capitalization. Those who expect a sharper rise in value are betting on altcoins. Their general trend will be positive as long as the first cryptocurrency grows, Troshin is sure.

“It is difficult to choose the best altcoins to invest in such a hectic moment. It is necessary to buy a scattering of coins from the top ten by capitalization. However, special attention should be paid to Ethereum, which today is the only altcoin officially recognized in the United States as an exchange commodity, and for which there are legal derivatives. Also, the BCH and LTC coins accepted by PayPal (along with BTC and ETH) have a certain advantage. But you shouldn’t limit the basket to them only,” the expert recommended.

Now the capitalization of the cryptocurrency market is $ 568 billion, excluding bitcoin – $ 214 billion. In January 2018, the market value of all altcoins that were issued at that time was over $ 550 billion.