This morning, traders are looking at two important trends around financial activity centered on Bitcoin, ‘the most popular cryptocurrency in the world.’
In coverage over the past 24 hour cycle, writer Ana Berman at Cointelegraph is noting that while Bitcoin has been hanging up above $3600, other major cryptocurrencies are significantly down, including Ripple (XRP).
“While Bitcoin…is managing to stay above the $3,600 price point for the third day in a row, other major (coins) are mostly in the red as the markets gradually roll back after short recovery,” Berman wrote last night. “BTC has been trading sideways during the last 24 hours, but the coin is still above over its psychological threshold of $3,600 at press time. … the top currency gained over $200 in value on Friday, Feb. 8, hitting $3,691 at some point during that day.”
That’s an interesting trend in itself, but analysts are also looking at some underlying indicators that might explain why Bitcoin is now, as of press time, hovering at $3700.
As far as chart activity, there was an evident hard reset on Friday where Bitcoin jumped up to above $3700 after languishing down around $3400 for about a week and a half.
The chart activity on its own is unusual – but there’s also an understanding that high trading volume has been indicating that better things are ahead for Bitcoin.
“The daily Bitcoin (BTC) transaction volume has been recently increasing to the levels not seen since January 2018, after BTC hit the $20,000 price mark, …” Ana Alexandre wrote Feb. 8. “Some industry players believe that it is a sign of the evolution of the cryptocurrency’s ecosystem and fundamentals.” (bolding added)
Alexandre quotes Jameson Lopp, chief technology officer at Casa, talking about good outlooks for Bitcoin including lower transaction demand, better fee estimation algorithms, adoption of segregated witness protocol and good transaction batching, which the expert points out can optimize block space and improve supply and demand.
Hearing that Bitcoin fundamentals are strong is good news for traders, and that’s also being served up in combination with strong signaling from some U.S. Securities and Exchange Commission members that they may be amenable to cryptocurrency projects in the future after fully evaluating things like security and fraud potential.
Both Hester Peirce and Robert L. Jackson have both suggested that SEC action on cryptocurrencies could be forthcoming this year. That’s just part of what’s leading some traders to call blockchain “the new Internet” and imagine a world where Bitcoin and other coins suddenly become the new normal.
Watch Bitcoin as it’s likely to crawl sideways in its new $3700 value, but will eventually break either way.