Bitcoin is on the Cusp of a Two-Year Milestone
Bitcoin’s price saw modest gains on Tuesday, as calm returned to the crypto ecosystem following a rocky start to the week. The leading digital currency is on the cusp of a three-month winning streak, a monumental feat following the year-long bear market.
The average bitcoin price rose 1% to reach $5,298.48, according to CoinMarketCap. On individual exchanges, bitcoin’s premium swelled to 6% on Bitfinex after New York regulators announced they are pursuing legal action against the platform for allegedly co-mingling client and corporate funds to hide hundreds of millions in losses.
At last check, the BTC/USD price was quoted at $5,521 on Bitfinex. The same pair was quoted at $5,202 on Coinbase. Read more – Bitfinex: The Plot Thickens (and So Does the Bitcoin Price Premium).
At current values, bitcoin has a total market capitalization of $93.6 billion. The market cap peaked near $100 billion last week. Bitcoin’s dominance rate is currently 54.5%. It was as high as 55% on Monday.
Bitcoin is prepared to close out the month of April on a gain of 28%. It rose nearly 7% in March and 12% in February. With the April rally, bitcoin is on track for its first three-month winning streak since the first quarter of 2017.
New Cycle Confirmed
If history is any indication, bitcoin’s current winning streak could continue for another few months before the next major shakeout occurs. As Hacked reported earlier this month, bitcoin’s dominant trends usually last an average of five-to-six months, which means we could see a re-test of the psychologically significant $6,000 level before the current uptrend is exhausted.
These dominant trends occur within a much larger market cycle of about four years. Bitcoin’s last four-year cycle ended in December when prices bottomed near $3,100. In the wake of that cyclical low, bitcoin has entered a new four-year paradigm. We can say this with relative certainty because BTC’s bottom is firmly protected and there’s too much separation in terms of time and price between current levels and the ones we saw five months ago.
This doesn’t mean bitcoin’s path will be linear. Investors can expect several big shakeouts later this year as the market corrects from overbought levels. These shakeouts will impact over-leveraged traders and those who entered the market on a fear of missing out. Read more: Bitcoin’s Dominant Trend Cycle Points to Continued Rally through the Spring.
After spiking in early April, bitcoin’s volatility index has leveled off in recent weeks. The 30-day volatility index, which tracks expected changes in bitcoin’s price over time, is currently 3.75%, according to bitvol.info. The same volatility gauge had a reading of just 1.24% in late March.
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.
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