Bitcoin Begins December on Firm Footing Following Worst Month Since 2011
Bitcoin’s price rebounded on Saturday, as the bulls looked set to reassert themselves following a rocky end to November. The leading digital currency fell by a whopping 37% last month, marking its worst 30-day performance since 2011.
The bitcoin price reached a high of $4,335 on Bitfinex, having gained more than 7% during the course of the session. At the time of writing, the BTC/USD spot price was trading at $4,316, up 6.8%.
As the 4-hour chart illustrates, the leading digital currency is enjoying a solid bounce in momentum, with the relative strength index (RSI) quickly approaching 60. This pivotal mark is usually a sign that the bulls are controlling price action.
Bitcoin briefly fell below $4,000 on Friday, eroding a large chunk of the gains made during the previous 48 hours. On Tuesday and Wednesday, the coin’s market cap rose by as much as $12 billion. For now, it appears that the $4,000 support level is holding firm. This critical defense is needed to protect against a further re-test of yearly lows.
In terms of market data, bitcoin’s total turnover on Saturday reached $5.5 billion, according to CoinMarketCap. Spot trading surged, with six exchanges processing at least 2% of the daily volume. BitMEX, which has dominated the market since the selloff began last month, saw its share of the total volume fall to 22%. The popular derivatives market allows traders to short bitcoin.
Bitcoin wasn’t the only cryptocurrency to trade in a positive direction Saturday. With the exception of the dollar-backed stablecoins, all coins in the top-30 reported gains.
Litecoin, which has slipped to no. 7 in the market cap rankings, was among the top performers. The LTC price rose 8.4% to $34.64. Tron was also among the top gainers; TRX rose 7.4% to $0.0152. Cardano climbed 6.7% to $0.4129.
Among the top-five, Stellar broadened its lead over bitcoin cash, gaining 5% to $0.1675. The BCH price edge up 1.1% to $175.64.
XRP rose 3.6% to $0.3740, while Ethereum added 4.5% to $118.74 (all figures according to CoinMarketCap).
The combined value of all cryptocurrencies rose by $8 billion to $138.5 billion, based on latest available data. At the height of the rally last week, the market cap peaked above $142 billion.
There was no immediate catalyst for the weekend reversal, just as there was no one overarching theme for the sharp decline on Friday. This means technical trading is largely responsible for the movement. Bitcoin’s solid trading volume also suggests that markets remain relatively engaged in spot trading, which reduces the likelihood of added volatility that usually accompanies low-volume environments.
The bitcoin market is gearing up for an exciting start to 2019. In January, Intercontinental Exchange’s Bakkt trading platform is scheduled to go live, offering investors the opportunity to trade physically-delivered bitcoin futures. It was also confirmed earlier this week that Nasdaq will open a bitcoin futures market in the first quarter of next year, offering a product that VanEck calls “futures 2.0.”
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.