Crypto Market Added $45 Billion in 10 Days, is Bitcoin Close to a Bottom?
Since December 15, within a ten-day span, the cryptocurrency market added $45 billion to its valuation as Bitcoin surpassed $4,200.
Many analysts are generally positive on the short-term price trend of Bitcoin heading towards the year’s end, confident that the dominant cryptocurrency has established a bottom.
Prospect of Bitcoin
Currently, Bitcoin and the vast majority of cryptocurrencies are undoubtedly in a bear market. From its all-time high, the Bitcoin price is still down 79 percent and other major crypto assets such as Ethereum (ETH) and Ripple (XRP) are down around 89 percent from their all-time highs.
7 days ago ETH was down 94% from all time highs. Now, after a 52% increase in 7 days, ETH is only down 91% from all time highs.
For investors to reasonably believe that cryptocurrencies are no longer in a bear market, digital assets would have to increase by over 20 to 30 percent against the USD.
Bitcoin, for instance, is currently valued at around $4,200 on fiat-to-cryptocurrency exchanges. While the asset has broken out of several resistance levels above $4,000, a breakout of $5,000 is important to confirm a proper bullish price movement, as analyst Willy Woo explained earlier this month.
“Be aware the above scenario is contingent on a bounce upwards to test low $5,000s. Currently, the short term price action is consolidating into a wedge with hidden accumulation (according to the OBV indicator), this suggest there is more probability of an up move from here,” Woo explained when the price of Bitcoin hovered at around $3,500.
$3,120, the lowest point Bitcoin reached in 2018, could have been its bottom, capped at an 84 percent decline from its all-time high. However, to confirm a full trend reversal, the asset would have to show strength throughout the first quarter of 2019, demonstrating several months of consolidation and accumulation.
It could be said that the crypto market has achieved a bottom, as Ethereum co-creator Joseph Lubin emphasized, but it is too early to conclude that the bear market of cryptocurrencies has come to an end.
Still, the strong corrective rally of major digital assets has relieved significant pressure from the cryptocurrency market, increasing the probability of a potential trend reversal and positive price movements over the Christmas season.
45 Percent Up
Since mid-December, the cryptocurrency market has recorded an increase in valuation from $100 billion to $145 billion, by 45 percent.
However, in a grand scheme of things, the cryptocurrency market has not even reached November levels, when the valuation of the market was hovering at $220 billion. The market would need to rebound by 51 percent to recover to $220 billion.
With several positive industry-related developments including the launch of the Bakkt Bitcoin futures market in January, investors in the market are anticipating a solid price movement throughout the first two months of 2019.
Featured image from Shutterstock.
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