Trend’s change or correction?Dec 24, 2018
For the first time in a long time, the prices of all TOP-20 cryptocurrencies by capitalization demonstrate a steady positive trend. A substantial increase in prices has led to the growth in market capitalization to $145 billion. Bitcoin Cash (BCH) was a leader of the growth, adding more than 150% in price over the week. Tether (USDT) was the outsider of the past week but still showed a positive result, having added a little over 1%. Therefore, on December 24, 12 cryptocurrencies had more than $1 billion capitalizations. TRON (TRX), Cardano (ADA) and IOTA (MIOTA) hold last positions among the “billionaires” by capitalization.
Despite the steady growth of the main cryptocurrencies, it is extremely difficult to distinguish the primary driver of the market.
There were many reasons, from rumors to real changes, including changes in the balance of power between buyers and sellers. It is a known fact that the United States continue to tighten the rules of issuing and trading digital currencies. This fact is most often associated with the slump of the cryptocurrency market observed over the last few weeks. Now there are rumors about the SEC progress concerning approval of the cryptocurrency exchange fund (ETF). Some of them make sense because earlier the SEC referred to the lack of infrastructure and proper regulation of this market. Solving these problems increases the possibility of Bitcoin-ETF approval. Given the sharp decline in the BTC price and its approach to the psychological level of $3000, optimistic news could provide support to buyers.
Information about closing the legendary short position became the fundamental factor which supported BTC. One year ago Mark Dow opened a short position while BTC was reaching its peak and finally closed it last week. Having an interview with Bloomberg, Dow announced that he twice had taken a profit from his short position, and now he had closed it. Market participants could interpret the fact that this position was closed as a signal of the trend change from bearish to bullish. On December 24, 2017, Dow predicted the trend change from ascending to descending, that’s why many traders could trust him this time.
The willingness of Western Union to work with cryptocurrencies serves as another fundamental factor, contributing to the growth of the cryptocurrency market. Running the tests indicates the seriousness of its intentions.
Ripple (XRP), the second cryptocurrency by capitalization, also received a strong fundamental factor for growth. Ripple has found a new primary partner – the Israeli company GMT. It is an international company with 250 branches, which cooperates with significant services, e.g., American Express.
Summing up, we highlight several key points that contribute to the growth of the cryptocurrency market:
- A recent slump and BTC approach to the psychological level of $ 3000
- Rumors about the progress in approval of exchange-traded fund (ETF)
- The closing of the legendary short position by the former economist of the International Monetary Fund – Mark Dow
- Western Union is ready to work with cryptocurrencies
- The Israeli company GMT became a partner of Ripple
Despite these changes, the risk of a further decline in the cryptocurrency market remains elevated, as the global trend is still descending.