Bitcoin and Ethereum traded positively after collapsing to new annual bottoms and recovered even above last week’s highs. The bullish movement, however, remains limited due to the news of regulatory measures in Hong Kong. Yesterday, it was reported that the regulator would soon require local investment funds to get a license if more than 10% of the assets they manage are made up of cryptocurrencies.
The regulator has been forced to act because the fears of fraud and money laundering continue to rise, with regulation expected to be implemented in stages. On Tuesday, the prices of the crypto market were steady, recovering from the recent lows.
Perhaps because we are ready for Christmas and New Year vacations, the market is constantly gaining momentum. There was an incredible bulish rally on Monday, with profits also visible in terms of market capitalization. Market capitalization not only rebounded over $ 100 billion, but closed yesterday at $ 112 billion. During my writing, the market corrected even higher to the current $ 113 billion.
The upward momentum marks the return of the bulls as shown in the charts. And investors hope with a smile that the reversal can take Bitcoin’s price to testing $ 4,000 and preferably up to $ 5,000 before the end of the year.
After Monday’s price bounce, Bitcoin is trying to keep up around weekly highs and is traded + 4.12% around $ 3 567 area. The trend remains bulish in a short time, but if Bitcoin broke below $ 3 500, obviously the strength of the bulls was not enough. It is not only a clear break, but a convincing move with a daily closing over the range between $ 3,500 and $ 3,100 to confirm a further rally to 3,678 (December 9 high). A clear break above this level will open the doors to 3,700 and possibly 3,800 in the near future.
Failure to break above 3 550 may cause a downside pressure to test $ 3 500, which break will indicate a possible reversal. And that can unlock profit taking and to direct the bears to their nearest target of $ 3,400.
A year ago, Bitcoin’s price peaked just under $ 20,000, ending 2017 phenomenally. But since then, Bitcoin has dropped almost 83 percent from the high of all time. And concerns about regulation and institutional investment limit the flow of funds from recovery to these levels. So, during the holidays trade will be mostly dependent on high-impact news, the surge or fall in prices on other financial markets, the flow of funds from big investors or huge organizations, the SEC’s approval of Bitcoin futures, and so on. We’re going to see if we’ll have the Santa Claus Rally ….
Author: Silviya Velcheva
* The views expressed in this material do not constitute a recommendation or advice for the purchase or sale of cryptocurrencies in the digital assets market or other financial instruments. The predicted forecasts meet the expectations of the author of the material and may not materialize. Trading in currencies, contracts for differences on margin or cryptocurrencies poses a high risk and may not be suitable for all investors. Past results are not a guarantee of future success.