Bitcoin continued to gain on Tuesday
Bitcoin remained strong on Tuesday, increasing its market capitalization by more than 60% for the past month. In particular, Bitcoin’s market share jumped to its highest level since September 2017. But earlier today, the crypto market has calmed down after strong growth in the previous days. Bitcoin and most of the top Altcoins consolidate profits in newly opened ranges.
The total capitalization of all digital assets in circulation reached $ 243 billion, compared with $ 232 billion yesterday. And the average daily volume of trade reached 107 billion dollars.
Interest in Bitcoin is on the rise
The question, however, is what is behind this recent rally and whether it is sustainable? Let’s take a quick look at recent possible triggers.
The BTC rally in 2019 is quite different from the rise in prices in December 2017. Over the past year, many exchanges have started and continued to increase their activity and trading volumes. The boost from increasing trading volumes, arbitrage opportunities and higher liquidity creates conditions to make the BTC market more predictable.
In addition, an ecosystem of Stablecoins*, with Tether (USDT) as its leader, facilitated international trade. In addition, Bakkt (Bitcoin full-service exchange, wallet, trading platform and clearing house) has announced that BTC futures will be put into test mode in July.
There is some speculation that the escalating trade dispute between China and the U.S. is playing a role in attracting investors to BTC. Risk-off attitudes because of this global headwind may have added momentum to Bitcoin.
In the past, institutional investors have stayed away from crypto currencies because of several problems, including custody, insurance and regulations. However, the recent developments of major names like Coinbase, Fidelity, Intercontinental Exchange (Bakkt) and TD Ameritrade seem very positive, and the crypto space is definitely more prepared to meet institutional investments than in 2017.
Also FOMO (fear of missed opportunities) has returned to the market and retail investors have become the real driving force behind this dynamic. Bitcoin’s current jump in prices also follows the pattern of growing dominance, while Altcoins temporarily lose their attractiveness.
Bitcoin has been consolidating the recent gains. What’s next?
The price of Bitcoin against the dollar traded at a 10-month high, reaching $ 8,324 yesterday. On daily chart, it is clearly seen that exceeding significant levels such as $ 7,000 and $ 8,000 triggered profit taking, but it quickly ended with a subsequent new wave of purchases. At the time of my writing, the main digital currency is moving around $ 8,000.
BTC/USD is traded comfortably over SMA 200, SMA 50 and SMA 20 on daily chart. So, while that does not change, bulls keep control. Their next short-term target of Bitcoin should be $ 8,500, with a breakthrough over $ 8,200 would provide additional support for the broader market.
Keep in mind, though, that even Bitcoin is headed for $ 10,000, there will be corrections on the way. So, it’s not surprising that the price has retreated a little bit to $ 8,000, and we can see some consolidation around this level.
On the downside, the area around $ 6,000 before was quite strong resistance. However, the BTC finally broke it and it broke out once in early May. So, I think it’s safe to assume that the correction will keep Bitcoin over $ 6,000 for now. In addition, the SMA 20 is located around $ 6,140 on daily chart.
* Stablecoins are cryptocurrencies designed to minimize the volatility of the price of the stablecoin, relative to some “stable” asset or basket of assets.
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.