Bitcoin Price Approaching $4,100 Following Explosive Rally
Bitcoin notched fresh two-week highs on Tuesday, building off a solid start to the week for the cryptocurrency market. Although momentum has slowed over the last 24 hours, BTC has maintained a firm bottom at $4,000 and is now encroaching on a key technical level.
Monday reading: Bitcoin Crosses $4,000 Following Sharp and Sudden Rally.
Bitcoin notched a session high of $4,118.39, its strongest in over two weeks, according to CCN’s price tracker. Aggregate data courtesy of CoinMarketCap show an average BTC price of $4,085, which represents a gain of 1.2% on the day.
On individual exchanges, bitcoin’s price fluctuated between $4,34 (HitBTC) and $4,164 (Bitfinex).
The leading digital currency took a big step forward on Monday, where it gained 6% in less than 30 minutes. Although such oversized moves aren’t uncommon, the upward shift pushed bitcoin north of $4,000. A clean break above $4,100 will likely set up a re-test of the Dec. 24 swing high near $4,300.
Read more about bitcoin and the broader cryptocurrency market: Full Strength.
Trading volumes remained well above levels needed to sustain a healthy recovery. At the time of writing, bitcoin’s virtual currency markets processed nearly $5.2 billion worth of trades. Spot markets accounted for roughly 85% of the total volume.
The broader cryptocurrency market moved slightly higher on Tuesday, as altcoins and tokens joined bitcoin in positive territory. The combined value of cryptocurrencies climbed above $138 billion, based on latest available data.
After a highly volatile six-week stretch, bitcoin’s price swings have moderated since Christmas, a reassuring sign for long-term holders of the digital asset. Prior to the price collapse, which began on the eve of the bitcoin cash hard fork in mid-November, bitcoin was enjoying unprecedented stability.
Between June and November, bitcoin traded above $6,000 with few exceptions. Extreme swings were also limited, except for two major rally attempts in July and September (each of which failed to push prices higher in a sustained fashion).
Underlying volatility in the bitcoin market has declined gradually in recent weeks and currently sits at the lowest level since late-November. According to bitvol.info, bitcoin’s 30-day volatility index fell to 4.31% on Monday. It peaked closer to 7% on Dec. 18.
Basically, these numbers convey how much the price of bitcoin varies over time. A higher number represents a greater magnitude of change in the underlying price.
Some investors are hopeful that the launch of new bitcoin futures markets will lessen the impact of volatility. Intercontinental Exchange (ICE) is scheduled to launch a market dedicated to physical bitcoin futures as early as this month. Nasdaq is also planning its own futures product later this year.
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.