Ethereum Leads Broad Recovery as Crypto Market Adds $10 Billion
Major cryptocurrencies were in recovery mode on Thursday, led by Ethereum’s double-digit gain, as investors swept in to buy the market at yearly lows. However, the latest recovery has all the signs of a dead cat bounce, which means the bulls aren’t out of the woods yet.
Digital currency values rebounded sharply on Thursday, with the overall market recovering $10 billion in lost market cap. The combined value of all cryptos in circulation reached $186 billion on Wednesday, a new low for the year, but has since recovered to around $196.4 billion.
In terms of percentage gains, Ethereum, Litecoin and Monero were the stand-out performers. Ether surged 12.2% to $193 after hitting 16-month lows on Wednesday. Litecoin jumped 11.7% to trade just below $54. Monero added 15% to $113.
Altcoins and tokens saw their share of the overall cryptocurrency market rise slightly to 43.4%, according to CoinMarketCap. Bitcoin, meanwhile, rose 3% to $6,463.
The market rose even as trade volumes leveled off somewhat. Total market turnover on exchanges edged down to $11.9 billion from an earlier high of around $13 billion.
The rally was largely driven by oversold conditions across most major assets. As such, the market remains in a firm downtrend.
Ethereum Co-Founders Clash
While there are many factors behind ether’s rapid depreciation – ICO cash-out, scalability concerns and a bearish market outlook – bearish comments from one of its co-founders has also aided in the drop. On Sunday, Vitalik Buterin told Bloomberg News that “the blockchain space is getting to the point where there’s a ceiling in sight,” adding that the days of 1,000% price growth are over.
As one might expect, Buterin’s comments prompted a tidal wave of response (and speculation) from the cryptocurrency community. And it didn’t take long for Joseph Lubin, one of Ethereum’s co-founders, to issue a retort. In an interview with CNN, he said the following:
“Vitalik is brilliant, but I would have to disagree with him on that. This is a technology that’s going to impact how economic, social and political systems are built over the next few decades. So we’re really just at the start of this.”
Buterin later clarified via Twitter that he “never said there is “no room for growth” in the crypto ecosystem,” only that “there is no room for 100x price increases.”
As the debate continues, short bets on Ethereum continue to grow. As Hacked reported five days ago, bearish bets on Ethereum have reached an all-time high on Bitfinex, one of the world’s largest cryptocurrency exchanges. This has since been corroborated by data provider CoinFi, which showed bets against ether have reached record levels.
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.