Flush of Green: Crypto Markets on the Rise as Bitcoin Approaches Oversold Territory
Crypto markets saw renewed upside on Wednesday, as bitcoin emerged from oversold levels and bitcoin cash jumped to weekly highs. The moves, which appear technical in nature, set the stage for a bigger short-term rally.
Markets Eye Recovery
The total value of cryptocurrencies rose by more than $1 billion on Wednesday, reaching a high of $121.2 billion, according to CoinMarketCap. Gains have been harder to come by this week, with total crypto values hovering below $120 billion since Monday. The newfound stability followed a weekend pump-and-dump with a peak-to-trough of $125 billion-$118 billion.
Slight to moderate gains were reported across the board through the early part of Wednesday. In terms of percentage gains, bitcoin cash was the best-performing major, jumping 6.5% to $131.13. BCH is running at its second consecutive session in the green, as the bulls continue to push above a long-running descending trend line. More BCH technical analysis can be found here.
EOS was another top performer, rising 2.7% to $2.46. The fifth-largest cryptocurrency by market capitalization could become one of the first cryptocurrencies to break from the bearish trend should developers continue flocking the protocol.
Relevant reading: Can EOS Overcome the Bear Market?
Litecoin rose 2.5% to $32.21. Tron’s TRX token climbed 2.9% to $0.0271. XRP and Etheruem each traded slightly higher, though gains were capped below 1%.
Bitcoin: Technical Breakthrough?
Bitcoin’s trading range has narrowed in the last three sessions, offering signs of newfound stability for the leading cryptocurrency. The bitcoin price rose 0.8% on Wednesday to $3619.26, according to CoinMarketCap.
Technical analysis presented by Bloomberg suggests bitcoin could be eyeing an imminent breakout in the near future. The GTI Global Strength Technical Indicator recently fell to a low near 35, putting it within range of oversold levels. The last time the GTI gauge fell to 35 was in December prior to the bull run. Bitcoin bottomed near $3,100 in early December before rocketing toward $4,300 on Christmas Eve.
Additionally, bitcoin on Tuesday fell below the lower VERA band limit before rebounding above that threshold during the same session. As Bloomberg notes, the GRI Vera Trend Signals indicator is used to identify short-term trends in asset prices. Based on bitcoin’s recent behavior, a short-term rally is likely.
These views shouldn’t be confused with bitcoin’s long-term trajectory, as that is based on broader market developments, regulation and business adoption. Bitcoin is still viewed as a premiere store of value but its role as a unit of transaction is subject to debate. A panel of industry leaders recently discussed bitcoin’s long-term trajectory in Davos, Switzerland. More on that story can be found here.
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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