This week may well be remembered for a reverse of the crypto market to some optimism. Bitcoin has managed to get support at $3,300. Purchases are gradually gaining momentum, that allowed the price to exceed the $4,000 threshold. Needless to say that the BTC rebounds after an excessive oversold earlier.
In addition, a very positive sign can be considered that along with the increase in prices, trading volumes are steadily increasing too. Within three days from December 17, they grew twice to $7.5 billion.
The same is true for Bitcoin Cash. Over the past few days, the cryptocurrency has shown impressive growth of more than 77% from its lows of $90, and at the moment it reached about $160. The total market capitalization of the crypto for the week increased by $22 billion. Cautious investors should not rule out that to a large extent this flow is the money of short-term speculators who can quickly leave the market as well.
Inside of the crypto community reigns not so rosy expectations: many market participants consider the current growth as purely speculative and are confident that it will be followed by a pullback below $3,000. The youngest millionaire in the world, Erik Finman, who bought Bitcoins for $12 in his childhood, believes that Bitcoin (BTC) and Litecoin (BTC) are doomed to death in the long run after several phases of rallies and corrections. He relies on tech-friendly Ethereum (ETH) and Zcash (ZEC).
The positive impulse for a pretty battered crypto market was the news that the longest short on Bitcoin had finally closed. Famous bear Mark Dow opened it a year ago near highs. Together with an increase of almost 30% from recent lows, the symbolic boundaries of the bearish phase of the market have been passed. In the short term, this may boost the market with a signal to buy for some investors.
However, over the past year, cryptocurrencies from a hot investment still can’t turn into a significant market sector and make the scene in at least some areas. This means a turbulent future for the prices and the preservation of the market status as an ideal sector for speculation.
Alexander Kuptsikevich, the FxPro analyst