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As Ether celebrates its eighth consecutive day of scaling a record peak, the rally in Dogecoin raises excitement about the arrival of alt season.
The cryptocurrency market awakened to the sight of the price of Dogecoin (DOGE) soaring to as high as $0.69 in the last two days, prompting many to ask whether the latest success of the world’s most famous meme token is now the leading indicator for the advent of alt season.
Long-time crypto enthusiasts regard May 4th as a remarkable day for the Bitcoin world as a whole since it is the birthday of one of the oldest recognised proponents of the Bitcoin network, Hal Finney, who would have turned 65.
Data from Tradingview shows that while the world’s attention was focused on Dogecoin, Bitcoin (BTC) faced selling pressures, which began the night before and dropped the price of BTC back below the $55,000 support level by mid-day on Tuesday.
Although BTC remains in the $50,000 to $60,000 range, or what some traders refer to as the “twilight zone,” the price of Ether (ETH) has risen to a new all-time peak of $3,519, with institutional investors now holding a whopping $13.9 billion in the top altcoin and smart contract network.
Yellen’s comments about US Fed rates shake the markets
The global financial markets faced headwinds on Tuesday along with a majority of cryptocurrencies following remarks from U.S. Treasury Secretary Janet Yellen who indicated that the Federal Reserve may need to raise interest rates to “prevent overheating.”
According to Ben Lilly, analyst and cofounder of Jarvis Labs, “US Fed Rates tend to be a barometer for global markets,” so BTC’s position as a macro commodity was “certainly impacted” by Yellen’s words, despite the fact that she is not the new Fed Chair.
Looking further into recent Bitcoin network operation, Lilly said that “on-chain transactions have been lacklustre since the major options expiry last week,” which hasn’t helped provide a hedge against bad news such as Yellen’s remarks.
“It wouldn’t surprise us to see a significant pull back before we realize six-figure bitcoin.”
David Lifchitz, chief investment officer at ExoAlpha, reiterated these views, pointing to a breakdown in Bitcoin’s previous trend of higher highs as a warning that BTC would struggle to break out above $60,000 in the absence of a major trigger.
Lifchitz, on the other hand, claimed that “ETH has been in its own bull world,” as illustrated by “new highs every day over the past eight days.”
Although the precise cause of the ETH run is unknown, one possible interpretation, according to Lifchitz, is that “some investors looked at ETH as an underpriced crypto compared to BTC since its recent run and decided that ETH was a cheap alternative to BTC.”
Other catalysts found by Lifchitz include increased ETH use in decentralised finance and a potential “buy the rumour, sell the news” scenario emerging ahead of the upcoming Ethereum Network update EIP 1559 in July.
Lifchitz emphasised the ability of cryptos to make larger movements on value plays than on fundamentals, owing to “investors chasing short-term performance regardless of what the fundamentals are.”
“We could see a bit of pure performance chasing on momentum with ETH. Price increases on pure momentum can go on for longer than one can expect, as long as there’s a greater fool, but the fallback is usually pretty harsh and quick when the game stops.”
Dogecoin steals the show
The performance of Dogecoin, which soared by 54% overnight to a new all-time high of about $0.68 on some exchanges, dominated discussions in the broader cryptocurrency world.
Such noteworthy performances include a 30% rise in the price of iExec RLC (RLC) to a new all-time high of $4.45 and a 50% increase in the price of Ethereum Classic (ETC) to $79.
The total blockchain market cap is currently $2.25 trillion, with Bitcoin dominating at 45.2 percent.