Bitcoin Poised to Snap Six-Month Losing Streak

Bitcoin’s price was little changed on Thursday, though periodic gains over the past three weeks have put the digital currency on track to snap a brutal six-month losing streak.

BTC/USD Update

The bitcoin price hovered within a narrow range on Thursday and was last spotted at $3,818.50 on Bitstamp for a slight gain of 0.2%. Underlying momentum seems to have picked up slightly, based on the hourly relative strength index (RSI). Still, there’s little indication of an imminent breakout attempt.

Aggregate price data from CoinMarketCap show an average bitcoin price of $3,874.05, virtually unchanged compared to the previous day. Trade volumes have gathered pace over the past 24 hours, reaching $8.4 billion on virtual exchanges.

Bitcoin appears to have stabilized following a sudden drop on Wednesday. The leading digital currency dropped to the mid-$3,600 range before quickly regaining its footing.

More importantly, bitcoin is on track to snap a six-month losing streak – a brutal stretch that resulted in a 60% loss in market cap. At the time of writing, BTC is headed for a monthly gain of 12.6%.

Much of that growth occurred last week when bitcoin finally crossed $4,000. The bulls eventually ran out of stamina near the December high area ($4,200), which resulted in profit-taking. The rally pushed bitcoin’s market cap north of $73.7 billion. It has since moderated back down to $68.1 billion, according to CoinMarketCap. That represents 52.1% of the entire cryptocurrency market at today’s values.

Fundamental Outlook Remains Strong

While there were no immediate catalysts for bitcoin’s reversal this month, the steady accumulation of coins on virtual exchanges and the resulting volume spike from those seems to be the biggest factor. Bitcoin’s daily trading volume peaked north of $11 billion earlier this month, with over-the-counter markets likely processing an equal or greater number. An emerging market for “private bilateral contracts” among institutional traders has also proliferated.

On a fundamental level, bitcoin is as strong as it has ever been – that is, if you subscribe to the idea that institutional adoption will lead to mass acceptance and higher prices. Fidelity Investments, Intercontinental Exchange and Nasdaq are all on the verge of launching bitcoin-centric products and services. Activity among institutional investors also suggests that ‘bitcoin maximalism’ has returned.

Grayscale, a well known crypto asset manager, recently announced that its bitcoin fund attracted an average inflow of $2 million per week during the fourth quarter. This haul occurred during what many analysts have called ‘crypto nuclear winter.’ What’s more, 66% of the funds invested into Grayscale products in 2018 came from institutional investors. Read more: Return of the Bitcoin Maximalist? Crypto Winter Luring Even More Institutional Capital than Before.

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.

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Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi