Crypto Market Experiences Green Week For Once
Finally, after a multi-month downtrend, the crypto market at large breathed a sigh of relief over the past days. In one week, Bitcoin (BTC) has found legs to run on, moving from a year-to-date low at ~$3,150 to a multi-week high of ~$4,225 on the back of an unexpected influx of buying pressure. This move, which has been dubbed both a “Santa Claus rally” and/or “relief rally/dead cat bounce” by analysts, pushed altcoins even higher than BTC.
Case in point, within the past week, the BTC market dominance figure has fallen to 52.83%, a far cry from the 55% posted just prior to the crypto market’s most recent surge. This move has also seen volume return to the cryptocurrency market en-masse, with exchanges reporting $14 billion on Friday morning, according to data compiled by Live Coin Watch.
All this has led to an environment where the aggregate value of all cryptocurrencies has pushed above $131.9 billion, 30% higher than the figure’s year-to-date low at $102 billion established just last week.
Bitcoin Retests $4,000, Posts Slight Gain
After breaching $4,000 on Thursday in approximately two hours’ time, BTC has since slowed down, reaching a weekly high at $4,200 before falling to $3,850. However, in the past two hours, the crypto market has seen an uptick yet again, with pressure quickly pushing BTC to test $4,000 for the second time in a week.
At the time of writing, BTC on Coinbase has found itself at $3,970, failing to establish a proper foothold above the psychological and somewhat technical level of resistance/support at $4,000 flat.
Analysts Aren’t Convinced That Bullish Breakout Is Imminent
Although the fact that Bitcoin retested $4,000 could be seen as a bullish indicator, not all analysts are convinced that Saturday’s price action is all too special. The Crypto Dog, drawing attention to CryptoCap (Crypto’s market capitalization), noted that crypto’s uptick could “just be a bearish re-test,” adding that prices could fall “HARD.”
Others echoed this sentiment. Alex Kruger, a leading crypto-friendly markets researcher and analyst, recently claimed that technicals remain the strongest impetus behind price action in this nascent market. The past week’s rally, in his eyes, was catalyzed by essentially a single indicator, this being the Relative Strength Index (RSI). More specifically, after crypto fell to year-to-date lows last week, RSI fell into well-oversold levels, making the recent surge only a correction off oversold levels, rather than a fundamental bullish shift in this industry.
While some aren’t convinced that Bitcoin’s latest rally has legs, data gathered by one Crypto Quantamental has shown that the recent surge isn’t as innocuous as it may seem. As reported by Ethereum World News previously, Quantumental recently stated that BTC is showing “the classic signs of a ‘V’ bottom.” Case in point, Quantamental noted that the “record-breaking” volumes (in BTC count, not $) indicate that a long-term bottom may have formed.
Per the investor, Dec. 20 was Bitcoin’s highest volume day in its ten-year history, with exchanges en bloc reportedly trading 2,226,735 BTC at an average price of $3,938. This sum, for some much-needed perspective, is a tad more than 10% of all Bitcoin that will ever go into circulation.
Commenting on this move, Quantamental wrote:
“Remember capitulation requires a large drop on massive volume, and the recovery of the “V” requires a large bounce on large volume. We have both here.”
Yet, in the end, Quantamental, just like his/her fellow analysts, noted that it may be premature to call a bottom, as markets, especially crypto, can be unpredictable at times.
Title Image Courtesy of Andre Francois Via Unsplash