In the past 24 hours, despite the negative predictions of many traders, bitcoin price has remained above the crucial $7,000 resistance level, allowing the crypto market to add $8 billion to its valuation.
Dash, Verge, Monero, and EOS are the best performing cryptocurrencies of September 1, recording strong gains in the range of 7 to 12 percent.
Tokens with large daily trading volumes like Ontology, ICON, VeChain, Binance Coin, Tron, 0x, and Zilliqa have not demonstrated massive gains against Bitcoin. Throughout August, these tokens frequently recorded big movements depending on the performance of Bitcoin.
Up until August 31, the vast majority of technical analysts and traders in the cryptocurrency community expected Bitcoin and the rest of the market to fall to previous support levels.
Peter Brandt, a highly experienced trader in the FX and cryptocurrency market, said that in his 43 years of trading, he has not seen any asset or commodity rebound following a 80 percent correction after two weeks of stability.
Many traders echoed a similar sentiment as Brandt, stating that for Bitcoin to reverse its trend to initiate a mid-term rally, a longer period of stability is necessary. Brandt said:
“In 43 years of trading, I have never seen an 82% decline end and be reversed with a 2-week bottom. I do not believe this will be the first time, but with cryptos anything is possible (though not probable).”
If Bitcoin had continued to fall on August 30 after dropping below the $6,900 mark, it could have tested the mid-$6,000 region once again, possibly dropping below $6,500. But, crucially, Bitcoin rebounded relatively quickly to $7,000 and in the past 24 hours, BTC has eyed a break out of the $7,100 mark.
The quick recovery of BTC has allowed tokens, which were on a strong downward trend until August 31, to demonstrate a trend reversal and initiate short-term movements on the upside. While tokens have not performed relatively well against Bitcoin throughout the past few days, tokens have started to find newly established momentum.
If BTC can close its daily candle with decent momentum and volume by recording two consecutive daily buy candles, then it will be possible for BTC to eye a move towards the mid-$7,000 region.
Throughout August, Bitcoin has shown record low volatility rates. Researchers at Diar found that BTC demonstrated a 14-month low rate of volatility in August.
In consideration of the poor performance of tokens against Bitcoin over the past three days and the strong movement of major cryptocurrencies like Bitcoin, Ether, EOS, Ripple, and Dash, tokens are likely to record large gains in the next 12 to 24 hours.
The volume of tokens on Binance, the world’s largest cryptocurrency exchange, remains high especially for major tokens like Ontology, ICON, and VeChain. In the past few hours, ONT, ICX, and BNB have made decent 2 to 4 percent gains.
Featured image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 6:02 PM UTC