Pre-Christmas rally: five reasons why bitcoin (BTC) is gaining momentum

Over the course of several days, BTC prices moved from a lower range around 3200 USD to more than 3800 USD, which creates hope for a higher range.

Bitcoin (BTC) has had an impressive start to the week – at least based on recent experience, with prices under significant downward pressure. BTC prices quickly climbed to the $3500 level and continued to rise, with volumes rising to $6,5 billion. After several weeks of selloffs, Bitcoin is seeing the factors that have led to the current rise and are raising hopes of reaching a higher range.

Increasing dominance: Bitcoin is considered a better bet after a bear market causes much more damage to altcoins. The dominance of BTC in terms of market capitalization has reached a recent maximum above 57%, and now it significantly exceeds 54%. BTC prices remain relatively less volatile compared to altcoins, and higher liquidity ensures that the coin does not actually drop to zero.

Mining development: at least temporarily Mining bitcoin has a short-term awakening. Difficulty dropped by 23% last month, which means higher potential for block rewards as well as lower transaction fees... This brought many miners back, increasing the hashrate to over 43 EH / s. Fears that Bitcoin would fall into a slow mining death spiral have not materialized, and mining at these levels is still much more active than in previous years. Active mining can improve sentiment and at least halt the ongoing decline in prices.

The bear market went on as usual: BTC is more than 80% below the peak that has traditionally been seen as a bottom, forcing traders to come back in anticipation of a rally. According to CryptoCompare, the share of trade Coinbase is over 17%, while investments in US dollars remain at about 20%. Paradoxically, when selling BTC, most of the funds go to Tether (USDT). But when the price rises, USDT pairs are relatively inactive. At the moment, more than 53% of BTC transactions take place in the BTC / USDT pair. However, during sales, over 71% of trades are against USDT. While some are still reluctant to call a bottom in anticipation of increased sales, BTC managed to hold above $ 3000, which created expectations at least at the end of the year.

Profit on the stock market decreases: There is still no clear relationship between BTC prices and stock market indicators. But for those at risk, there may be a potential reward for leading cryptocurrencies, while traditional stock markets seem set to decline. In addition, fears of a slowdown in the US economy, coupled with a rise in the Fed’s prices may create greater demand for alternative investments in the 2019 year.

Belated rally: It is possible that the current rally is just a pump as traders are still careful to force a more sustained rise in the price. BTC always has the opportunity for a short-term rally, and winning a few hundred dollars within a few hours can be tempting. There are no targets for the current rally as BTC is slowly regaining ground and selling could resume soon. But the week starting on a positive note, instead of destroying more price, is starting to look like a tidal shift.

Neither the author nor the publication shall be liable for any investments, profits or losses resulting from the use of this information. Cryptocurrency trading and investing are risky offers, and market participants are advised to always conduct thorough research.

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