Bitcoin is having a mini Santa Rally as it closes in on $4,000.
The leading crypto asset has risen 15% to $3,885 from lows at the beginning of the week at around $3,250. The strength of the bounce may be helped by short sellers having to cover their positions.
“For those wondering what’s causing cryptos’ impressive push from the floor this morning, look no further than short covering. People are looking to reduce their exposure and closing out high risk sell positions before the holidays and this is creating upward pressure on market prices, which is ultimately resulting in a rally,” says Mati Greenspan, senior market analyst at eToro, the global, multi-asset, investment platform.
As far as technical price analysis goes, Bitcoin is now above the 50-day exponential moving average and has crashed through the Ichimoko cloud resistance on the 1-day chart, as seen below:
Crypto market cap has added $20 billion so far this week. Volume has also picked up markedly, which could add wind to the sails of this rally. Daily bitcoin volumes has has broken through to $6 billion to stand at $6.6 billion.
With institutional investors in the shape of Bakkt looking to enter the market in the new year, perhaps market participants feel there is now a floor in place.
The view from eToro
Earlier in the week Greenspan noted: “The rise in cryptoasset value in the last 24 hours has many questioning if the market is experiencing a Santa Rally. The truth is crypto as a concept is still relatively new and we don’t have enough data yet to show if this is a typical December trend.
“What we do know is that the price increase is a strong push off the floor for the market. This type of movement is encouraging and may just end up creating a bottom for this battered market and possibly even a bullish trend into 2019.”
You could reasonably say that he would say that wouldn’t he, given that eToro has made a big bet on crypto. In fact it has been advertising its crypto markets.
Weiss Ratings buy note last week – ok it was a tweet – may have been right on the money.
#BTC is getting to such low levels that it’s becoming one of the best buying opportunities of the year. As a store of value, #Bitcoin is here to stay. We truly think it’s the least speculative investment a person can make in #crypto right now.
— Weiss Ratings (@WeissRatings) December 11, 2018
BSV losing to BCH
Elsewhere in the market, Bitcoin Cash has leapt 38% to $123, leaving BSV behind at $87. Could be that BSV’s day in the sun when it briefly overtook BCH may be just that – a one-day flash in the pan.
Ripple’s XRP is up 15% at $0.378, as it closes in on $0.40 and EOS continuing its progress, now trading at $2.72, adding a further 15% in the past 24 hours.
Gary has been writing about cryptocurrencies since 2013 and currently works as the cryptocurrency analyst at interactive investor, the UK’s second-largest online investment platform. Gary contributes for Coin Intelligence News in a personal capacity and none of his commentary should be considered investment advice. Gary is the winner of the ADVFN International Financial Awards 2018 Cryptocurrency Writer of the Year. Contact Gary on twitter at: @gary_mcfarlane