Digital Gold? Bitcoin Price Notches New December High
Bitcoin’s price rallied further on Monday, reaching new highs for the month of December in a sign that the market bears were slowly relinquishing control. The leading digital currency is enjoying strong momentum and a resurgence of trading volume that could generate sustained rallies before year’s end.
The bitcoin price is back above $4,200 on most virtual currency exchanges, having gained 5% for the day. BTC is valued as high as $4,337 on Bitfinex after reaching an earlier peak of $4,384.
Aggregate data courtesy of CoinMarketCap show an average price of $4,226 at the time of writing. That represents a five-day return of more than 17%. Over that period, the market has generated significant momentum, as expressed by the relative strength index (RSI).
The surge in trading volume is also desirable from the perspective of bullish sentiment. As of Monday, more than $7 billion worth of bitcoin was traded on virtual currency exchanges all over the world. Activity in over-the-counter markets likely reflects similar trading levels.
Despite having a market cap of $73.4 billion, bitcoin’s share of the overall crypto universe has dwindled to just over half. During the height of the selloff earlier this month, bitcoin’s dominance index exceeded 55%. The sharp drop reflects an upsurge in token prices as well as in small-cap altcoins. Read more: Crypto Market Up 40% Over Week; Small Cap Altcoins See Huge Price Moves.
The recent price rally for bitcoin and the broader market has led to some notable predictions from within the blockchain community. Ethereum co-founder Joseph Lubin recently called the “cryptobottom of 2018” following an “epic amount of fear, uncertainty, and doubt” in the market. In his view, the market will likely extend higher for the foreseeable future.
2019 looks to be a pivotal year for cryptocurrencies as mainstream investors contend with the afterglow of the longest bull market in history. As Hacked recently reported, the Nasdaq Composite Index officially entered a bear market on Friday, while the Dow Jones Industrial Average capped off its worst week in a decade. This environment has led many investors to diversify back into gold, a notable hedge against uncertainty. As a result, bullion notched fresh six-month highs last week.
It remains to be seen whether downward pressure on stocks and the flight to haven assets will generate sustained support for bitcoin and other perceived crypto havens. The hypothesis that bitcoin represents “digital gold” could be put to the test in relatively short order.
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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