The cryptocurrency market’s dramatic recovery softened on Saturday, as speculators turned to profit-taking on some of the world’s biggest digital assets. However, signs of an enduring rally materialized as bitcoin continues to hold near $8,000.
Cryptocurrency Price Levels
The combined value of digital assets touched a low of $312.2 billion on Saturday, according to CoinMarketCap. The market had peaked near $330 billion the day before.
At the time of writing, the total market was valued at $315.3 billion, having declined more than 3% over a 24-hour period. Trading volumes over the last day have also declined to around $16.4 billion after surging past $20 billion on Friday.
In terms of individual assets, Ripple XRP was the biggest decliner in the top-10. The digital currency fell 7.3% to $0.63 for a total market cap of around $24.6 billion. XRP received a boost on Thursday after Spain’s Santander bank announced the launch of a blockchain international payment system backed by Ripple’s technology.
Digital currency EOS was also down more than 7% to trade at $8.38 a coin. EOS surged past $9.00 a coin earlier this week in anticipation of the Apr. 15 airdrop event. With the decline, EOS moved back into sixth place in terms of market cap with a total value of $6.6 billion.
Meanwhile, bitcoin was only off by $250 from its Friday high of $8,230. The digital currency was last seen trading around $7,979 for a total market cap of $135.4 billion. Bitcoin prices initially spiked above $7,000 on Bitfinex about three days ago, which may have triggered the broad market rally.
End of the Downtrend?
The question of sustainability has dogged the cryptocurrency market since the dramatic downturn of early February. Since then, the total market has exceeded $500 billion on only one occasion. However, there are some signs that the prolonged downtrend may be coming to an end.
For starters, bitcoin’s share of the total market has declined modestly over the past week, from a high above 45% to the current level of around 43%. Bitcoin’s staying power near its most recent high suggests that speculative money has re-entered a market previously dominated by “hodlers,” those of us who are largely unperturbed by BTC’s recent volatility.
It’s also worth acknowledging that sharp corrections in bitcoin and the broader market are nothing new. The only difference with the latest reversal was how much money was at stake. But as history has repeatedly shown, crypto-market downtrends are always followed by a more dramatic surge in prices. That’s the general view held by Netcoins founder Michael Vogel:
“For the most part, I don’t think this most recent correction is any different than corrections in previous years,” Vogel said, according to CCN. “These corrections are in fact how bitcoin will truly establish itself as a sustainable asset class.”
It can also be argued that the first-quarter selloff was a symptom of adverse news, something the crypto market has dealt with for years but not to the same degree as between January and March. Negative headlines have slowly dissipated in recent weeks, allowing investors to concentrate on all the positive developments underway in the blockchain industry.
That said, there’s no guarantee that prices will continue higher in the short term, unless further points of critical resistance are overtaken. However, for the first time in a long time, the price charts are showing signs of real progress.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.