All of the top 10 cryptocurrencies by market cap have risen over 20% in the last 24 hours, signalling that the market is beginning its recovery.
The high-correlation between the bitcoin (btc) price and the fortunes of the entire market has continued, with all top 100 cryptocurrencies on the rise.
This is obviously an encouraging sign that that market has found a support level, however the market-cap of the market is still down a staggering amount since early January. The total market cap sits at around $390billion USD, down from an all time high of $800billion earlier in January.
Many believe the recovery has been driven by a more optimistic than expected US Senate hearing into cryptocurrencies. The mood of the hearing suggested that the US was moving in a direction of improving regulatory guidelines as opposed to outlawing the digital currencies.
“We owe it to this new generation to respect their enthusiasm for virtual currencies, with a thoughtful and balanced response, and not a dismissive one,” said Christopher Giancarlo, the chairman of the Securities and Exchange Commission (SEC).
This is an attitude that is shared by most in the cryptoworld, as regulation and government cooperation obviously leads to more certainty in the market.
Giancarlo’s comments have been welcomed by the bitcoin community, given concerns about comments from Indian Finance Minister Arun Jaitley last week. During his budget speech Jaitley said, “The government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system.”
Some perceived this to be a direct threat to digital currencies in India and around the world, but the attitudes of Korea, America an India seem to be similar in nature. That is, that regulations are required – but banning is not only difficult, but to no-ones advantage.
Again, given the volatility it is difficult to accurately pinpoint what is creating such fluctuation. Undoubtedly the introduction of futures markets has significantly affected the price of bitcoin. However a simpler answer could lie in the fact that the market is just naturally finding equilibrium after a massive correction. Between the hodler’s and the “buy the dip” internet financial advisors, so long as a market still has buyers, the commodity will eventually find its level. For the sake of the bitcoin community let us hope this bounce is not a false-dawn.