NEW YORK (BLOOMBERG) – Smaller, lesser-known digital tokens commonly referred to as altcoins led a push higher in cryptocurrencies that saw Bitcoin head toward US$23,000.
Ether, the second-largest digital currency, jumped as much as 10.7 per cent on Tuesday (July 19) in Asia. Solana added 13 per cent and Polkadot about 7 per cent. Bitcoin at one point rose 6.8 per cent and was trading at US$22,880 as of 9.15am in Tokyo.
Ether is extending a rally that began last week after developers of the Ethereum blockchain gave a target for the long-anticipated software update that is projected to lower the network’s energy usage.
Traders are paying close attention to any indication that Bitcoin is breaking out of its recent pattern of swinging between US$19,000 and US$22,000.
The token hasn’t traded consistently above that range since mid-June, when news that crypto lender Celsius Network had frozen withdrawals sparked renewed panic selling. Virtual coins were hammered in May in the wake of the collapse of the TerraUSD stablecoin.
“Bitcoin has recaptured the US$22,000 level as some short-sellers need to call it quits,” Edward Moya, senior market analyst at Oanda Corp. wrote in a note. Cryptos are starting to look attractive now expectations for Fed tightening have eased, he added.
Altcoins often outperform Bitcoin during rallies and underperform when prices are falling, in part because they’re a favourite of more speculative traders and tend to be less liquid.