The cryptocurrency market has started to gain some momentum and stability over the past 48 hours, with three consecutive daily buy candles recorded by bitcoin. Tokens such as OmiseGo and DigixDAO have seen notable increase in volume and price, but it is still unclear whether the market can initiate a new rally.
On yesterday’s report, CCN.com noted that if BTC recovers to the $7,700 mark swiftly from $7,300, a short-term drop to the $6,000 region can be prevented. Over the past 24 hours, BTC successfully recovered to $7,700 and stabilized in the $7,700 region, without recording any major movement.
Often, stability in the cryptocurrency sector signifies a potential build up for a bull rally in the short-term, especially if several daily buy candles are recorded consecutively. The Relative Strength Index (RSI) and moving average convergence/divergence (MACD) demonstrate strong conditions for the BTC market, opening the possibility of BTC rebounding to $8,000 in the upcoming days.
But, one issue with BTC and the rest of the cryptocurrency market is the low daily trading volume. As of current, the daily trading volume of BTC remains just below $5 billion, a volume that is merely 30 percent of January’s daily trading volume.
Tether (USDT), the cryptocurrency whose value is hedged to the US dollar, still remains as the second most traded cryptocurrency in the market behind BTC, signifying that many traders are utilizing the US dollar-backed currency to hedge the value of cryptocurrencies.
Considering the strong recovery of BTC from $7,300 to $7,700, it is likely that BTC re-enters the $8,000 region in the upcoming days, testing a major support level at $8,500. While bears still remain in control of the market, the recent trend in the price of BTC shows that the majority of investors are reluctant to sell various digital assets at current rates.
The short-term trend of BTC has become more positive over the past few days but the market is dealing with a bear cycle. In a period like this, large-scale investors often look toward mid-term triggers and possible factors that could contribute to market recovery.
This week, Paul Vigna of the Wall Street Journal reported that SolidX Management and Van Eck Associates Corp have partnered to launch a bitcoin exchange-traded fund (ETF) within 2018, with the approval of the US Securities and Exchange Commission (SEC).
Last year, both companies had their ETF applications rejected by the SEC and failed to introduce a publicly tradable bitcoin instrument to institutional investors. To increase the chances of obtaining the approval from the SEC, the two firms teamed up to create a new bitcoin ETF called the VanEck SolidX Bitcoin Trust.
Previously, the US SEC stated that one of the major concerns regarding bitcoin ETFs is the lack of investor protection policies. The VanEck SolidX Bitcoin Trust will insure investors against theft and loss of access to BTC, eliminating the possibility of investors being impacted by unforeseen technical glitches or errors.
The introduction of a bitcoin ETF will enable institutional investors to enter the cryptocurrency market with full protection against potential security issues.
Last modified: June 10, 2020 4:52 PM UTC