Cryptocurrency Market Approaching $400 Billion as Bitcoin Tests $9,000
The cryptocurrency market extended its bullish rally on Sunday, as bitcoin and the major altcoins continued to test multi-month highs. Buy orders accounted for the overwhelming majority of transactions, giving rise to expectations of a more sustained upswing in prices.
Cryptocurrency Rally Continues
The combined value of all cryptocurrencies peaked at $397.2 billion on Sunday, the highest since Mar. 8. At press time, the market was valued just below $394 billion.
Transaction volumes ebbed on Sunday, with daily turnover amounting to $20.8 billion. Volumes were up around $25 billion on Saturday.
In terms of individual currencies, bitcoin crossed the $9,000 mark for the second time in as many days. The digital currency was last seen trading at $8,932, having gained 4.8%. However, its share of the total market decline to around 38%.
All major altcoins contributed positively to the rally, with Ethereum gaining nearly 5% to $632. The value of Ripple XRP rose 2.6% to $0.886. Bitcoin cash also extended its bullish rally, climbing nearly 7% to $1,226.
Since bottoming at $249 billion on Apr. 6, the cryptocurrency market has added nearly $150 billion in value. Since the market crash of early February, coins have crossed the $500 billion mark on only one occasion, and that was roughly two weeks later. The total market has been capped below $400 billion since early March.
Bulls in Firm Control
The dramatic recovery in cryptocurrency prices can be summed up in one vital statistic: nine out of every ten trades have been buy orders. That figure was as high as 92.9% on Thursday, according to TurtleBTC.
Cryptocurrency trading is largely governed by investor sentiment, especially among speculators entering the market for a quick profit. This environment, when combined with thin volumes, often generates sporadic trading conditions that are characterized by extreme volatility.
Sentiment has been overwhelmingly positive over the last two weeks as investors looked to capitalize on extreme oversold conditions. Traders have seemingly shrugged off negative news headlines concerning India’s crackdown on cryptocurrency trading as well as the state of New York’s inquiry into exchanges.
There’s strong reason to believe that South Korean traders are playing a major role in the price recovery. According to the most recent volume rankings, three South Korean exchanges are among the top-five in total trading volumes. They are: OKEx ($1.8 billion in daily volume), Upbit ($965 million) and Bithumb ($751 million).
With the recent spike in volume, cryptocurrencies are once again trading at a large premium in South Korea. This is generally the norm during bull cycles due to high demand and supply constraints. These premiums drew negative attention to exchanges last year as government officials began equating cryptocurrency trading with gambling.
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.