Bitcoin is facing minor resistance near $50,000 but if this psychological barrier is crossed, a major breakout could occur in select altcoins.
Demand and supply metrics determine the price of an asset and data from Glassnode, an on-chain data firm, shows that Bitcoin’s (BTC) liquid supply has been decreasing since June 2020. This signals that traders owning Bitcoin are not selling their holdings.
While the supply is shrinking, demand has been going up in the past few months as an increasing number of institutional investors have been buying Bitcoin.
Bloomberg recently reported that Morgan Stanley Investment Management’s subsidiary Cointerpoint Global “is exploring whether the cryptocurrency would be a suitable option for its investors.”
According to Morgan Stanley’s website, Counterpoint Global chooses to invest in assets “whose market value can increase significantly for underlying fundamental reasons.” This suggests that the bank believes Bitcoin may be undervalued compared to its fundamentals.
JPMorgan Chase also hinted that it might eventually introduce Bitcoin services. JPMorgan’s co-president Daniel Pinto believes that if investors and asset managers start using Bitcoin, the bank “will have to be involved.” Pinto however said that the current demand was not strong enough, but conceded it may grow in the future.
Even though Bitcoin has risen sharply in the past few months, its dominance has fallen from about 69.71% on Jan. 4 to 60.9% currently. This shows that altcoins have outperformed Bitcoin in the past few weeks. With an eye on altcoins, let’s study the charts of the top-5 cryptocurrencies that may trend in the next few days.