Buyers Control the Cryptocurrency Market More Than Any Time Since March 2017

The percentage of cryptocurrency traders ‘in the buy’ has reached the highest level in over a year, a strong sign that the market’s two-week recovery has more room to grow.

Cryptocurrency Buy Markets Surge

Cryptocurrency buy orders now comprise nearly 93% of total market activity, according to data from TurtleBC. That’s the highest percentage since March 2017, when more than 96% of the market was in buy mode. At this time last month, only about 5% of the market was long cryptocurrency.

Interestingly, every major surge in buy orders in the last two years has come after a sharp decline in long positions. As TurtleBC indicates, when the buy market is less than 10%, it likely means that conditions have bottomed and traders are getting ready to purchase again.

The upsurge in buy orders coincides with a more than $130 billion recovery in cryptocurrency prices since Apr. 6, when the market bottomed near $249 billion. The recovery puts cryptocurrencies in bull market territory, based on the traditional definition of the term. Crypto assets were valued as high as $395.1 billion on Friday, according to CoinMarketCap. The total market cap has since fallen to around $382.2 billion.

The recent uptrend in prices has also been accompanied by a surge in trading volumes, with total market turnover more than doubling from earlier in the month. By Saturday, nearly $25 billion in cryptocurrency exchanged hands. The top-five exchanges – Binance, OKEx, Upbit, Huobi and Bitfinex – accounted for more than one-third of the daily turnover.

Markets Oversold

Gauging the intrinsic value of cryptocurrencies is a contentious subject that usually divides people along political, economic and philosophical lines. However, for most technical strategists, the market was extremely oversold following the first-quarter downturn. For example, bitcoin bottomed below $6,000 after hitting a record high near $20,000 just a few months earlier. A similar trend was observed across most major digital assets.

Advocates of fundamental analysis have been commenting for months that the underlying conditions in the market hadn’t changed very much from the peak of early January. If anything, fundamentals have improved with Lightning Network, new ICO protocols and more governments coming on board to support the blockchain industry.

Most knowledgeable observers of the cryptocurrency market, including Thomas Lee and Dan Morehead, believe now is a good time to buy.

In a recent interview with CNBC, Morehead explained that bitcoin had grown at a rate of 165% annually over the past five years. Gains of this magnitude mean that bitcoin rarely gets below its 200-day moving average. When it does, as was the case recently, now is a good time to buy.

Morehead believes bitcoin will reach $25,000 by year’s end. It currently accounts for roughly 38% of the total market, a figure that usually declines with the bull market.

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.

Chief Editor to and Contributor to, 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