Sat. Aug 13th, 2022

With bitcoin’s dominance hovering at nearly 66%, the leading cryptocurrency is usually the one to steer the broader cryptocurrency market. Lately, however, altcoins have been trading to their own beat while the BTC price can’t seem to get out of its own way. Bitcoin is barely holding onto the $8,500 level as bulls and bears continue to wrestle for control. Lately it’s been the bears who have been in control as sentiment has turned to fear just a couple of days after bitcoin failed to break through the key $9,000 threshold, instead falling back to current levels. It’s been a tough weekend for the bitcoin bulls, no doubt.

For a clear shift to occur, the BTC price should climb to around $8,800. Otherwise the other shoe could drop.

“If not, this slow bleed could accelerate to $8,200 as the next level. Sentiment; fear. Obviously,” according to Michaël van de Poppe cited in Cointelegraph.

While the largest altcoins are not staging a rally of any kind, the technical signals are more bullish for them at the moment. Most of the top-20 cryptocurrencies based on market cap are currently boasting green candlesticks, led by Maker (MKR) with nearly 5% gains in the last 24 hours.

Maker, the issuer of the Dai stablecoin, was featured in an article by Reuters today in which the mainstream financial publication distinguishes DAI from other stablecoins. Reuters explains how while most leading stablecoins are backed by fiat money such as the U.S. dollar, DAI is backed by Ethereum and remains transparent via smart contracts on the blockchain.

Source: Twitter

Z-Classic, which is one of the smaller cryptocurrencies with a market cap of about $3 million, saw its value balloon by a double-digit percentage over the weekend. Currently up about 15%, the Zcash fork was buoyed after its creator, Rhett Creighton, revealed he was giving away coins, saying he wanted to “put more ZCL in the hands of people who understand crypto.”

ERC-20 Tokens

While some altcoins are going their own way, the Ethereum price remains highly correlated to its larger peer, bitcoin. And while ERC-20 coins were seemingly left for dead after the ICO meltdown and bursting of the 2017 crypto market bubble, some of them are making a comeback.

Crypto research firm CoinMetrics points out that “ERC-20 token market cap has been steadily gaining on ETH market cap since mid-2018,” as evidenced by the below chart.

Source: CoinMetrics

The firm compares Ethereum’s “network value to token value (NVTV)” and uses a calculation comprised of “dividing ETH’s market cap by the aggregate market cap of a selection of the biggest ERC-20s.”

Their formula illustrates a decline in Ethereum’s NVTV since last year. On the flipside, the valuations of ERC-20 tokens have been gaining seemingly at Ethereum’s expense. CoinMetrics breaks down ERC-20 tokens into a trio of categories –utility tokens, exchange tokens, and stablecoins. Stablecoins have been the biggest beneficiaries of this valuation trend, chief among which has been Tether (USDT).

Binance’s decision to hop off of the Ethereum blockchain and onto its own network caused a decline in the ERC-20 exchange valuations. As of November:

  • ERC-20 utility tokens = $5.19 billion market cap
  • ERC-20 exchange tokens = $2.55 billion market cap
  • ERC-20 stablecoins = $3 billion market cap (this compares to a valuation of just $109 million in July 2018.)

CoinMetrics published a detailed report that observes the evolution of ERC-20 tokens.

By Dov Herman

Dov is a Blockchain and Forex trading enthusiast, who spends most of his time trading and examining software who are related to cryptocurrencies and forex trading. You can follow on Dov’s reviews and articles here on TrustedBrokerz and across the web.