Bitcoin Rally a Strong Indicator for Cryptocurrency’s Return to Bull Market
Cryptocurrencies are making a strong comeback, hitting over $330 billion on Sunday, the highest on record in three weeks.
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For the first time since March 25, Bitcoin prices reached $8,400 on Sunday, extending its rally to five days. At 5:00 AM UTC Monday, the dominant digital currency was trading at $8,142 for a 14.57% gains over the past seven days, with a total market capitalization of $138.2 billion, data from CoinMarketCap showed.
Since April 1, Bitcoin has rebounded nearly 17% when the digital currency opened the month at $7,003. Bitcoin’s steady climb is a major catalyst for the broader digital currency market after recovering 26% since April 1 at $259 billion.
Almost all the other top 10 cryptocurrencies also gained on Monday. Ethereum extended its rally to above $513.62 (+0.13%). Ripple jumped 2.68% to $0.67, Bitcoin Cash gained 2.15% to $771.12, Cardano was up 2.98% to $0.215, Stellar posted the biggest gains at 7.98% to $0.288, IOTA jumped 1.34% to $1.58, and NEO rose 1.70% to $67.40. Meanwhile, Litecoin was up 0.31% to $128.40, EOS fell -0.52% to $8.13
There are currently 24 digital assets with more than one billion in market capitalization, CoinMarketCap data showed, with another 12 with more than $500 million in value.
Steady rise attracts optimism
The steady rise of Bitcoin and cryptocurrency prices is fueling optimism amongst industry players that the growth will be sustained for the rest of the year.
Digital currency-focused hedge fund Pantera Capital, which returned 25,000% last year from its Digital Asset Fund, said that the bearish market in the cryptocurrency space has bottomed out and is looking at steady recovery in the coming days. Digital Asset Fund lost some 45.7% of its [G4] cryptocurrency portfolios.
Pantera Capital co-chief investment officer Joey Krug reportedly said:
“This was a really rough month for the Digital Asset Fund and the space in general. We're in a market with around 100 percent annualized volatility and this month was the worst month in our model's 27-month history.”
An analyst at Barclays Plc likened the sudden jump in Bitcoin prices in 2017 to the spread of an infectious disease but is now beginning to wear off.
The analyst said:
“As more of the population become asset holders, the share of the population available to become new buyers -- the potential ‘host’ population -- falls, while the share of the population that are potential sellers (‘recoveries’) increases. Eventually, this leads to a plateauing of prices, and progressively, as random shocks to the larger supply population push up the ratio of sellers to buyers, prices begin to fall. That induces speculative selling pressure as price declines are projected forward exponentially.”
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