April has been good for bitcoin. However, yesterday it experienced a bit of a price correction to drop by 2.16% according to CoinMarketCap figures, and the valuation of the crypto market fell from $181 billion to $176 billion, that is more than $5 billion on a single day.
Other leading cryptocurrencies also experienced some sideways action in the range of 2 to 6 percent, but if bitcoin can maintain its position and break through the $6,000 resistance level then some traders expect a so-called “altcoin season” to start, says Joseph Young at CCN.
Young writes, “Normally, in the crypto market, the altcoin market makes large moves when bitcoin is engaging in sideways price action or is stable in a tight price range.” He explains that this doesn’t mean more capital is flowing into the altcoin market, but that existing investors “are becoming more comfortable with riskier bets on the market.”
One thing to watch out for as May approaches is the halving of bitcoin. This is expected to add momentum to bitcoin price action and if it shows stability above its current resistance levels, then we can expect to see a boost in capital inflow and confidence from investors in the altcoin market.
Hsaka Trades, a technical analyst has remarked that altcoins have already broken resistance levels on major exchanges: “All BitMEX altcoins have blown past their respective resistance level prior to their April breakouts, except for BCH. I expect it to follow suit soon,” the analyst said on Twitter.
Analysts are not concerned with the volume of the crypto market, because they believe much of it is “faked or inflated.” But, given the clear increase in the real volume of bitcoin would appear to indicate a noticeable increase in interest in the asset class since the beginning of April.