Bitcoin’s Slow Grind Higher Continues as Price Crosses $4,000 on All Major Exchanges
Bitcoin’s price resumed its gradual uptrend Thursday, raising the prospect of a bearish-to-bullish trend change in the near future.
The bitcoin price reached $4,086.96 on Thursday, having gained 1.1% over the previous session, according to CoinMarketCap. The leading digital currency has gained 4.4% over the past week, reflecting a gradual uptrend for the cryptocurrency market as a whole.
At current values, bitcoin has a total market capitalization of $71.9 billion, based on latest available data. Its share of the overall market remains steady at 50.8%.
Although bitcoin has been trading above $4,000 for the past week, that level only reflected the aggregate price and not was was seen on most major exchanges. That began to change on Thursday as BTC/USD crossed above $4,000 on Coinbase, Bitstamp, Bittrex and Gemini, among several others.
Bitcoin printed a high of $4,141.10 on Bitfinex, an exchange known for offering BTC at a significant premium.
Trade volumes returned above $10 billion on Thursday but have since moderated around $9.9 billion. Volumes have been on the rise all year long, reflecting a sharp increase in circulation. As Hacked previously speculated, this is largely a result of smart money and so-called bitcoin whales re-entering the market.
As far as exchanges go, BitMEX was the single largest platform for bitcoin trades. The derivatives market processed more than 8% of the total daily volume, which is equivalent to around $985 million.
Bitcoin’s slow grind higher is notable given the gradual drop in volatility observed in recent weeks. For crypto markets, volatility is a double-edged sword: it magnifies downturns but also plays a significant role in bullish price rallies.
Bitcoin’s volatility has been trending lower for much of the first quarter. After spiking in late February as a result of a broad market rally, volatility has resumed its downtrend in recent weeks. As of Wednesday, the 30-day bitcoin volatility index had fallen to 2.32%, according to bitvol.info. That’s the lowest level in nearly a month.
How bitcoin has responded to extended periods of lateral movement is also a strong indicator that market sentiment has improved. During the depths of the bear market last year, periods of stability were usually followed by significant price dumps. Now, the opposite seems to be true in that prolonged periods of sideways trading are being followed by significant price rallies.
It’s still too early to say with certainty that bitcoin’s bottom has already materialized. That being said, an upsurge in trading volume, increased adoption at the investor and business levels and improved market sentiment make a strong case that the worst of the downtrend has passed.
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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