The rollercoaster ride that is bitcoin’s latest rally has some wondering if we are nearing a market top, but our analysts aren’t yet convinced.
Kraken Intelligence, our team of in-house research experts, has released its February 2021 Market Recap & Outlook Report, which dives into data that suggests market participant enthusiasm endures and that institutional adoption remains on an upward trend.
Readers will get a robust look at essential market developments and the fundamental drivers behind various crypto asset’s price action, including BTC, ETH, ADA, DOT, LINK & LTC.
For example, our analysts find that bitcoin has shown a remarkably strong correlation to risk-on assets and risk-off assets as of late. We examine the potential implications, as well as what kind of return and volatility one might expect in the month of March.
Elsewhere, we explore why Cardano (ADA), Polkadot (DOT) and non-fungible tokens (NFTs) all posted outsized gains in February, with the latter category attracting notable investors such as Mark Cuban, Gary Vaynerchuk and Chamath Palihapitiya to token auctions.
By downloading our report, you’ll gain new insights into fundamental adoption, industry growth and bitcoin’s strong first quarter performance.
- BTC Logarithmic Regression Retracement – Historic price action shows that bitcoin bull market corrections typically retrace between 70-90%. When examining long-term trends, our analysts conclude we are still far away from a major market cycle top.
- ETH Trailing BTC – Ethereum proved to be the poorest performing asset in a hot February crypto market, returning only modest gains. One reason may be that transaction fees are increasingly cost prohibitive to all but the largest transactions. However, to remedy this, developers are proposing a change to its code that could adjust fee calculations.
- Historic Volatility – Bitcoin’s price returns and volatility both remained strong in the month of February. Despite recording its second-most volatile February on record, Bitcoin’s price appreciated for the fifth consecutive month. If the trend continues, returns should outpace the historical Q1 average.
- Positive & Negative Correlations – Euphoria took over the risk-on markets and bitcoin was certainly a part of that narrative that included stocks like GameStop and Tesla. That euphoria waned near the end of the month as fears of inflation caused a market sell off and a rise in long-term U.S. bond yields.
P.S. For all future Kraken Intelligence content, sign up here.