Bitcoin Barrels Toward $4,300, Sparking Huge Crypto Rally
Bitcoin’s price barreled past $4,200 ;ate Saturday, sparking an equally large rally for alternative cryptocurrencies and fueling optimism that the end of ‘crypto winter’ was finally near.
Crypto Coins Surge
With the exception of stablecoins, the top 30 cryptocurrencies all reported gains through the latter stages of trading Saturday. Bitcoin peaked at $4,282.40 on Bitfinex, the highest since Dec. 24. It was last seen trading hands at $4,266, having gained 1.4% during the session.
A look at the aggregate data feed from CoinMarketCap shows an average price of $4,194.25. That represents a 24-hour gain of 5% and also marks the highest level in roughly two months.
Alternative coins saw even bigger gains, as their combined value approached 49% of the total market capitalization (bitcoin being the other 51+%). Ethereum surged 11.3% to $164.99, exceeding the rally from early January and reaching the highest since Nov. 18. Ether’s gains are being fueled in part by a highly anticipated network upgrade scheduled to go live next week. The Constantinople hard fork will implement five different Ethereum Improvement Proposals (EIPs) for enhanced functionality.
EOS, another top performer as of late, climbed 11.9% to $4.32. In doing so, the Enterprise Operating System has come within $80 million of its ICO capitalization.
With respect to the other top coins, XRP rose 6% to $0.3395. Litecoin climbed past $53.00 for the first time since November, gaining 7.4%. Bitcoin cash advanced 9.2% to $157.31.
Stellar, Cardano and bitcoin SV each rose by at least 6%.
The combined value of all coins in circulation improved to $143.5 billion, which was the highest in over three months. The market cap has swelled by more than $30 billion since the month began.
End of ‘Crypto Winter’?
Saturday marked the second consecutive weekend that cryptocurrencies have increased in value. The rally that began last weekend engineered a $16 billion pump on Monday and Tuesday, which marked the first real sign of a bearish-to-bullish trend change for the market as a whole.
Volume is the key to understanding the tidal-force shift in cryptocurrencies. In the last 24 hours alone, exchange-based volumes increased more than a third to $31 billion. That’s more than double the average seen during the latter stages of the bear market. Daily turnover exceeded $36 billion last Tuesday, the highest in about ten months.
At first glance, the surge in volume appears sudden and unprovoked, but a closer look suggests there is more going on behind the scenes. The current market conditions may trace their origins back to last summer when bitcoin whales began transferring their coins out of dormant wallets. Trading activity has been up all year long despite no appreciable increase in value. That began to change earlier this month, beginning first on Feb. 8 and then again last weekend.
Cryptoassets still have a long way to go before they emerge from the bear market. But there’s certainly some evidence to suggest that the worst of the downtrend has passed. This is likely the case for coins like Ethereum and Litecoin, which have reasserted their dominance in recent weeks.
The end of crypto winter likely begins with bitcoin. The largest cryptocurrency is currently testing the upper range of the December rally. A clean break above this level would put the bulls on a path toward $5,000 – if not initially, then gradually at least. It’s not until bitcoin reaches $6,000 – a level consistent with mining costs – that we can definitively say that the winter season has ended.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.