The rally of alternative L1s and the return above the market cap range are the most positive events in the market this week
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- Here’s What a $1 Trillion Return Is
- Hashrate migration causes altcoin rallies
The cryptocurrency industry has finally regained part of its market capitalization and stepped above the $1 trillion threshold, bringing back some hope for investors who were left with an eight-month downtrend and bitcoin’s 2017 all-time high. Had to fall
Here’s What a $1 Trillion Return Is
The two main reasons behind the rapid recovery of the cryptocurrency market are the “rate hike” relief that appeared due to high levels of fear among investors who were unsure of the key rate hike and hashrate migration from the US financial regulator. How will the market react after that? Alternative PoW cryptocurrencies that caused a short-term rally on coins such as Ethereum Classic and Ravencoin.
We have already described the relief rally that is going on in the market right now. In short, the rally on Bitcoin and even Ethereum could be nothing but a bull trap given the lack of basic bullish signals such as increased trading volume or increased inflows.
The rapid price rise also makes little sense in the context of macro-analysis, considering the tightening of monetary policy, which is detrimental to any risk-averse asset, including cryptocurrencies and any crypto-related stocks.
Hashrate migration causes altcoin rallies
With Ethereum shutting down PoW for good in September, cryptocurrency miners are looking for alternatives rather than just shutting down their engines. One of the most notable projects that could become the new “Ethereum 1.0” could be Ethereum Classic.
The hash rate of ETC has already seen a massive 50% increase, indicating that a large number of miners are adding their rigs to the network. The profitability of mining ETC per 1 MH has already become equal to that of Ethereum.
Additionally, several funds and DAOs expressed their disagreement with Ethereum’s complete exclusion of the PoW consensus mechanism from the network’s ecosystem and offered the creation of an “Ethereum 1.0” cryptocurrency, similar to what Ethereum Classic is trying out. There should be another thorn. To get.
But ETC is not the only beneficiary of the merge as other PoW coins like Ravencoin are also seeing huge increases in hash rate and price. RVN has increased its value by almost 50% over the past two days as more investors seek exposure to the alternative L1 network.
The crypto market showed us that it is not ready to go down without a fight as bulls still keep Bitcoin above the $20,000 price, which is an important threshold for the market as a whole and is reflective of investor sentiment.
At press time, Bitcoin is changing hands at $23,520, while Ethereum Classic is attempting to remain in a bullish uptrend and is currently consolidating at the $40 resistance level, reversing over 13% over the past 24 hours. Used to be.