Bitcoin Price Edges Higher After Mild Weekend Rollover
Bitcoin’s price notched modest gains on Monday, as markets maintained their support of a key technical threshold, which has kept the bears at bay for the time being.
The bitcoin price notched intraday highs of $6,481 on Bitfinex, setting the stage for a bigger breakout in the short term. At the time of writing, BTC was valued at $6,452, where it was up only slightly on the day.
The leading digital currency briefly fell below $6,300 on Sunday, which threatened further downside exposure. Prices would quickly return above $6,300 before making a more sustained rally on Monday. The rebound puts the bulls on high alert for a possible re-test of the $6,500 threshold. Above that level, the market is likely to run into strong resistance near $6,600, which represents the upper portion of last week’s rally.
Looking at the 4-hour chart, momentum is gradually returning to the BTC trade, with the relative strength index (RSI) back above 50. However, the MACD clearly shows that the sellers are still in control.
Bitcoin’s daily trade volume is one of the more promising signs that a potential recovery is afoot. Turnover has risen more than 13% over the last 24 hours to reach $4.3 billion, according to CoinMarketCap. As Hacked previously noted, daily trade volumes of $4 billion or more are needed to support a sustained rally.
At current values, BTC has a total value of $111.3 billion for a 52.2% share of the total cryptocurrency market.
Actual Volumes Higher?
It’s important to keep in mind that data on trade volumes only capture the amount of money being traded on digital currency exchanges. The actual turnover when factoring over-the-counter markets could be twice as high as what’s reported by CoinMarketCap, according to Binance CEO Changpeng Zhao. If the OTC market is roughly the same size as the virtual exchange market, then we can assume that daily trade volume has averaged well over $20 billion this month.
“What I’ve heard is the OTC market is at least as large as the live recorded volumes,” Zhao said, as quoted by CCN. “So that is at least 50 percent of volumes that is not being reported on CoinMarketCap. But we’re not heading to that business, so we don’t know the real volumes.”
Trading activity is expected to increase manifold once institutional investors begin accessing cryptocurrencies on a larger scale. The launch of bitcoin futures last December has had a stabilizing effect on the market and it is believed that a crypto-backed exchange-traded fund (ETF) could open the door to much wider demand. The U.S. Securities and Exchange Commission (SEC) has so far rejected all bitcoin ETF applications but is said to be closely evaluating a joint proposal by VanEck and SolidX to list a physically-backed BTC fund.
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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