Over the last 24 hours, the crypto market demonstrated one of the strongest single-day rallies since November, as Bitcoin (BTC) rebounded by more than 11 percent from $3,181 to $3,541.
EOS, which was the sixth most valuable cryptocurrency last week ranked behind Tether (USDT) and Stellar (XLM) overtook Stellar with a staggering 35 percent price surge from $1.94 to $2.62.
Since achieving its daily peak at $2.62, the EOS price has fallen from $2.62 to $2.42, closing the day’s gain at around 25 percent.
As the Bitcoin price surged by 11 percent, most major cryptocurrencies and ERC20 tokens experienced large gains in the range of 10 to 40 percent.
Some analysts have speculated that the squeeze of short contracts on margin trading platforms led most cryptocurrencies including Bitcoin that demonstrated extremely oversold conditions to endure a corrective rally.
The 11 percent price surge of Bitcoin reversed the short-term trend of the market, breaking out of the trend of free falling without significant sell pressure and volume.
While Bitcoin could potentially rebound to $4,000 to $5,000 in the weeks to come, a cryptocurrency trader with an online alias “The Crypto Dog” emphasized that the macro trend still remains bearish.
The trader added that the current trend reversal will likely not lead to an all-time high and that most rallies could fail in the short-term. The trader said:
“If this turns mega bullish and we start to reach $5,000 to $6,000: do not forget that we are in a macro bear market. It’s not going to just go up and break out and go on to new ATHs. Rallies will fail, prepare for it.”
Still, for the short-term trend of the market, the corrective rally of Bitcoin was highly beneficial. With the momentum set by the dominant cryptocurrency, Ripple (XRP), Cardano (ADA), and many other smaller cryptocurrencies have shown large gains against the U.S. dollar.
Many cryptocurrencies have recovered in the last 24 hours but on a monthly or a quarterly basis, most digital assets are down quite substantially against both Bitcoin and the U.S. dollar.
To confirm a proper mid-term trend reversal and a rally, the cryptocurrency market will still have to maintain its momentum for several months. From August to October, for nearly three months, the cryptocurrency market demonstrated its highest level of stability but one sell-off reversed the trend, initiating a big bear market.
The timing of the corrective rally, however, during a period in which reports have started to claim the cryptocurrency market is dead and will reach zero, was superb.
Last modified: June 14, 2020 9:35 AM UTC