Binance Report Shows That Bitcoin Overcame Bottom Price
Bitcoin and most of altcoins have already undergone a deep correction, so the so-called “bottom” of their price is probably behind, according to a new Binance's report.
Since the beginning of 2019, the bitcoin rate has grown by more than 40%, and the most intense growth of the first cryptocurrency was observed in April as bitcoin unexpectedly went up on April 2, when, within an hour, it overcame the $5000 mark. Back in February, the cryptocurrency rate was at an extremely low level of $3500, which some experts had already dubbed the bottom.
Binance researchers note that long before the bitcoin surge, the altcoin market demonstrated its positive dynamics. It even gave birth to a new term among the traders — “altseason”.
One of the main factors the Binance experts studied was the degree of correlation between the prices of various digital assets. The correlation between the bitcoin and altcoin prices was more intense in late 2018 and early 2019, when the global cryptocurrency market was on the wane. Authors of the study believe that the reason for this phenomenon lies in the irrational behavior of retail investors.
Interestingly, the high interdependence of altcoin prices was also observed during the bitcoin uptrend. This means that during periods of the highest internal correlation (between 0.8 and 1), the cost of bitcoin started to go up, dubbed the “herding effect” in the report.
The bitcoin's April surge was also preceded by the rise in the altcoin market. However, Binance researchers are reluctant to explain this event by the proposed herding effect.
Previously, crypto analyst Tone Vays suggested that the bitcoin rise could be caused by price fraud.