The Bulls are Back: Crypto Markets Approach Yearly Highs after Profit-Taking

Crypto markets climbed toward yearly highs Wednesday, as bitcoin (BTC) and its altcoin peers rebounded sharply from a profit-taking-inspired dip earlier in the week.

Crypto Markets Surge

The top-50 cryptocurrencies all reported gains, as bitcoin’s dominance rate fell to 50.4%. The leading digital currency rose 2.9% to $4,069.50, its highest in nearly a week, according to CoinMarketCap. With the gain, bitcoin is once again testing a key psychological resistance ($4,000) that could pave the way for a more critical test down the road. To confirm the bearish-to-bullish trend reversal, the bitcoin price must return above $4,200.

Percentage-wise, the bulk of the rally on Wednesday was concentrated in altcoins and tokens. EOS (EOS) was the top performer, rallying 12.1% to $4.10. The Enterprise Operating System hasn’t traded above $4.00 in over a month. The gain gives EOS a market cap of $3.7 billion, which is just shy of its ICO level.

Ethereum (ETH), the second-largest cryptocurrency by market cap, climbed 4% to $139.73. The developer’s cryptocurrency is back to trading at levels seen before the pullback seen on Monday.

The XRP (XRP) price regained the 30-cent handle after experiencing a brisk selloff earlier in the week. XRP gained 3% to $0.3098.

Litecoin (LTC) was back above $61.00 after gaining 4.4% during the session. LTC has doubled in price since the year began and is one of the major cryptocurrencies to have escaped bitcoin’s gravitational pull.

Bitcoin cash (BCH) was among the top performers Monday, climbing 7.8% to $169.81. That’s the highest level since January.

Binance Coin (BNB) was last seen trading at $16.77, having gained 5%. Among the majors, BNB is this year’s top performer, reflecting tremendous progress for the Binance exchange.

Stellar Lumens (XLM) put up a strong performance Wednesday, gaining 7.3% to $0.1067.

Double-digit gains were reported for Cardano (ADA), which climbed 10.2% to reach $0.0669.

The total market capitalization of all cryptocurrencies improved to $142.7 billion, having gained more than $6 billion from the weekly low. The crypto market peaked just above $144 billion in February.

Sentiment Shifts

For all the talk of fake volumes permeating the crypto arena, trading activity from all corners appears to be improving. This trend may have begun as early as last summer when long-dormant bitcoin whales began transferring some of their coins to virtual exchanges. This trend seemingly intensified in the final month of 2018, when long-term bitcoin wallets flooded the market. According to data from Flipside Crypto, these accounts represented 60% of the circulating supply in December.

Higher turnover in private institutional circles may also explain bitcoin’s struggle to overcome $4,200, a barrier that has held up fairly well since December. As Bloomberg reports, some notable derivatives traders are shorting bitcoin at that price. Bloomberg also reports that these derivatives, i.e. “private bilateral contracts,” turnover anywhere from $125 million to $500 million each month. Also read Bitcoin and Derivatives: Why $4,200 Is So Crucial.

New Institutional Markets

An industry-wide push to establish new blockchain markets is well underway in Europe after Borse Stuttgart, Germany’s second largest stock exchange, announced that it is partnering with Axel Springer and a subsidiary to jointly launch a new trading venue. The new venue, which will be available for German customers beginning this summer, combines traditional investment services with a blockchain-based trading platform.

Borse first entered the crypto arms race last summer by announcing the development of a new cryptocurrency trading platform. At the time, the stock exchange said it was developing “end-to-end infrastructure for digital assets.” In terms of forthcoming products, Borse has announced it will launch a zero-fee trading app for cryptocurrencies as early as May.

In North America, Intercontinental Exchange is planning to launch its Bakkt trading platform sometime this year. Bakkt has raised a whopping $740 million in Series A funding despite having no clients. This means investors are betting big on Bakkt’s ability to generate significant volume for its forthcoming bitcoin futures product.

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