The Most Traded Cryptocurrencies Right Now

At the start of 2023, Bitcoin has experienced somewhat of a resurgence in enthusiasm, propelling itself above the $20,000 threshold for the first time since early November. Although market sentiment for cryptocurrency is unsteady, there are indications of renewed positivity following the hype led retracements of last year.

We see one example of this manifesting in the Far East as China appears to be displaying growing support for the industry. Chinese officials have begun to demonstrate their endorsement of crypto-related businesses in Hong Kong with regular visits to the city’s crypto based gatherings. Local crypto operators believe their presence is dispelling any uncertainty about Beijing's stance toward Hong Kong's aspirations to become a cryptocurrency hub. The subtle support signifies that officials are interested in using the laissez-faire city as a testing ground for digital assets, while maintaining strict control over such activities on the mainland. As rumors of another crypto bull run circulate, this article will examine the most heavily traded cryptocurrencies and what potential they have in the long and short term.?

?

Bitcoin (BTC)?

Starting with the biggest and brightest, Bitcoin is the cryptocurrency that started it all. It was created in 2009 by an unknown person using the pseudonym Satoshi Nakamoto. It is the largest and most popular cryptocurrency, with a market capitalization of over $1 trillion. Bitcoin transactions are recorded on a public ledger called the blockchain, and its supply is limited to 21 million coins. Bitcoin can be used for online purchases, investments, and as a store of value. It is the pioneering asset in the sector and is often used as a benchmark for the rest of the industry with other cryptocurrencies being fondly called ‘alt-coins’; as in an alternative to the standard, bitcoin.

A recent and somewhat unexpected price surge of Bitcoin (BTC) has abruptly stopped at a resistance level that was also difficult to break last year. The top digital currency by market capitalization experienced a strong uptrend at the beginning of this year, achieving nearly a 50% gain, which understandably means that it vastly outperformed major more conventional assets. However, the optimistic trend has ceased since February 16, as the cryptocurrency has had multiple failed attempts to establish a stable position above the $25,000 threshold. This level presented formidable resistance in August, resulting in the coin plunging to lows of around $18,000. The future direction of Bitcoin is uncertain, but with the increasing market sentiment, anything is possible. Some experts predict that the coin could surpass a six-figure value in the next five years although this would certainly be a bit of a moonshot.?

Ethereum (ETH)?

Ethereum is a decentralized, open source blockchain platform that enables developers to create decentralized applications and smart contracts. It is the second largest cryptocurrency and is hailed by its supporters as having a much wider use case than Bitcoin. Ether (ETH) is the native cryptocurrency of the Ethereum network and is used to facilitate transactions and pay for fees on the platform. Unlike Bitcoin, which primarily serves as a digital store of value and means of exchange, Ethereum is designed to be a platform for building decentralized applications and executing complex smart contracts. Additionally, while Bitcoin has a fixed supply, Ethereum has no fixed supply limit, with a supply that is capped only by an annual issuance limit.

Ethereum's price surge of nearly 20% between February 13 and 23 this year has sparked some anticipation of its next bullish phase. As it reached the monthly resistance level at $1,677, consolidation began, and the sideways movement formed a pennant with two higher lows and two lower highs. This bullish pennant formation points towards a 20% upswing, calculated by measuring the initial run-up distance and adding it to the breakout point on the pennant. Some analysts predict that if a breach of the pennant occurs around $1,720, the Ethereum price target could be $2,055, making investors optimistic about the potential for significant gains in the near future.?

?

Ripple (XRP)?

XRP is a digital currency that is used for fast and efficient international payments on the Ripple blockchain network. Unlike Bitcoin, which relies on a decentralized network of miners to verify transactions, XRP uses a consensus algorithm to validate transactions. This means that XRP transactions can be settled within seconds, making it an attractive option for institutions and individuals who need to move large sums of money across borders quickly. Additionally, while Bitcoin is primarily used as a store of value, XRP is designed specifically for use in financial transactions.?

While Ripple continues as a top 10 market cap ‘alt-coin', it has been somewhat marred with controversy as it battles with reputational issues and legal battles with the SEC. Ripple was accused by the SEC of conducting an unregistered securities offering worth $1.3 billion by selling XRP to raise funds for its business. In a detailed reply to the SEC's allegation, Ripple argued that XRP does not fall under the category of securities. Its founder went on record to criticise the SEC saying, “The SEC has lost 4 of its last 5 cases in the Supreme Court”, labelling the lawsuit as illegal and an example of abuse of power. It remains to be seen how ripple will perform in the long term, but if it is able to effectively fight off the SEC in court the market reaction is expected to be substantial.?

Note, trading Cryptocurrency CFDs and spread bets is restricted in the UK for all retail clients. Information here-in is provided for informative purposes only and should not be construed to be investment advice.