The cost of the first cryptocurrency has grown by more than $ 2000 since the beginning of the year. So, are we really seeing the first signs of a recovery in the trend? The question is actually interesting, but it’s worth starting with the details, and so, a very dull downward move lasted for about 190 days, which cut the Bitcoin rate by half. The base point was designated in the range level of $ 6550, where a peculiar flat 6900/7750 was formed above it, and the clock component changed only on January 6 of this year, reflecting to us a series of pulsed rising candles and fixing above $ 8000.
What is the reason for the change of interest? There are quite a lot of theories here, one of the most interesting ones says that the stage of fear that has taken place since the beginning of autumn 2019 has waned. This theory has the basis of law, where the period of the end of 2018 is taken as a basis, having in some way a similar model for the development of prices.
In terms of fundamental data, they are inclined to believe that 2020 has good growth prospects. Therefore, many believe that Bitcoin halving can significantly increase the demand for the first cryptocurrency due to a conditional deficit that will be caused by an adjustment in the complexity of the development of BTC. Let me remind you that in the history of halving with the first cryptocurrency, it happened twice already, where the BTC rate increased 200 times for the first time, and in the second process of the development complication, the growth was 700%, which, of course, says a lot.
However, I don’t think we should expect a similar repetition, because the times are not the same, and a kind of excitement is gone. In any case, this event [halving], which is scheduled for May 2020, will attract special attention and, possibly, new market participants, due to which local growth will occur.
Current development and prospects
This week, a quite significant event for the crypto industry, the launch of Bitcoin options on the Chicago Mercantile Exchange [CME Group]. Trading volumes left 55 contracts at the start, or 275 BTC [$ 2 million (call option)], which is many times more than at the start of Bakkt. Moreover, volume data delighted many experts, dubbing what was happening as an important event for market development and a signal for investors
[1 option contract of the European type corresponds to 5 BTC. The minimum price step is 5 index points corresponding to $ 25]
The reaction of the market was positive, in particular, to Bitcoin. The upward pace was set, and the BTC rate has gained more than $ 500 in weight since the beginning of the week.
It is likely to assume that the current stumbling block is the psychological level of $ 10,000, which still needs to be reached, but also to break through. But, it is extremely early to talk about growth until this moment comes, as well as about changing the clock component.
It is worth considering such a moment that a kind of fear of further weakening of bitcoin is still preserved in the minds of traders and this may inhibit possible growth. Thus, you need a kind of engine and at least a clear fixation of prices higher than $ 10,000.
The general background of the cryptocurrency market
Analyzing the total market capitalization, we see a gradual recovery, where volume indicators have already reached the values of November last year, and currently amount to $ 240 billion
If we consider the volume chart in general terms, then the current ceilings are 254 —> 272 —> 281 —> 320 —> 356 —> 385 billion $.
The index of emotions, aka “fear and euphoria” of the cryptocurrency market, is surprisingly at a very comfortable level for this season at 54p. For example, the index was 24p on a similar date last year, which was an extremely low rate.
Analyzing a different sector of timeframes (TF), we see that indicators relative to all the main time intervals are literally unanimously inclined towards a further ascent, which confirms the current market sentiment.