Latest Bitcoin Price Rally is Welcomed, Yet Meager, as the Crypto Market Adds $7 Billion
Within a few minutes on January 6, BTC prices spiked from $3,830 to $4,030. The sudden spike led to a sudden spike in the price of other major crypto coins. The BCH, Ripple, LTC, Stellar, and EOS, all saw their prices spike in a range of 3 to 12 percent on the same day. Since then, they have shown solid momentum for the last 24 hours.
The Trend Is Still Not Clear
Following the spike, the crypto market saw a spike in the value of $7 billion, which is quite decent for the short term. However, as “The Crypto Dog”, a crypto trader, pointed out that the valuation of crypto would have to grow into the $160 to $180 billion range for there to be a convincing trend.
He pointed out that this was just another lackluster performance and he wanted to see $180 billion levels. In his opinion, until that happened, there is not much to be excited about. For three months, the market has been moving between $100 and $140 billion. Thus, short-term movements do not represent any proper accumulation period.
Many traders expect that the market cap will rise to $180 billion as being a catalyst for a midterm rally. Even if the market recovered to the $200 to $500 billion range, it might still leave the crypto market vulnerable to future drops in value.
Various other catalysts exist such as the expected launch of Bakkt, a US Securities, and Exchange Commission decision on the VanEck BTC exchange-trade fund filing, and development of BTC futures by Nasdaq. These catalysts might lead to a rally in the crypto world during Q1 2019.
Despite this, the chance that these three events will materialize in Q1 2019 is quite slim. For instance, Bakkt has already delayed the launch of their futures market. Hester Peirce, a commission in support of crypto, recently said investors should not wait on the ETF approval. This is because the whole process might end up taking months or even years.
The market will have to do more than just one short-term rebound if it is to start a rally. While this is positive, it does not indicate that this will become a trend anytime soon. For there to be a realistic rally, crypto needs to reach the November elves. This was back when the crypto market was valued at around $230 billion. During that time, BTC was trading at about $6,000. Until then, it is a challenge to think about a trend reversal from the bear market that began in 2018 and has not slowed down.
For the coming future, several crypto coins, which include ETH, will undergo huge protocol changes and may continue to see their value grow. There is also a coming Constantinople hard fork on the way for ETH. As has been shown in the past, this always leads to a rise in value for a coin. For instance, since the hard fork started to crystallize, the price of ETH has risen by about 80 percent.