In
the last 24 hours, the crypto market slightly recovered from $111 billion to
$113 billion as Bitcoin rebounded to $3,400.
Other major crypto
assets in the likes of Ripple (XRP) and Ethereum (ETH) recorded gains in the
range of three to seven percent against the U.S. dollar.
Following the
partnership with R3 and SWIFT, rumors around a potential SWIFT and Ripple
partnership emerged and analysts attributed the sudden
increase in the price of XRP to the rumors.
Longest Bear Market,
What Can Investors Expect?
According
to a cryptocurrency technical analyst Jonny Moe, the cryptocurrency market has
officially entered into its longest-ever bear market.
In
2013, the crypto sector engaged in a 410-day bear market during which the Bitcoin
price dropped from around $1,000 to nearly $100.
Since late December, for more than 410 days, the
cryptocurrency sector has been in a steep sell-off, unable to demonstrate
momentum or break out of key resistance levels.
Moe said:
“Thursday marks the
same length of time as the 2013-2015 bear market. We’re 2% off from the same
depth. I’m expecting these cycles to become longer and less extreme as we go.
Meaning, the upside move should take longer (it did), and the downtrend should
be longer (TBD). Next uptrend should be less extreme than ’16-’17 and longer.”
The analysis of Moe
disregards several months of consolidation following the 2013-2015 bear market,
which traders often describe as the accumulation phase.
Typically, especially
in the cryptocurrency market, major crypto assets tend to go through a
long-lasting correction and a few months of stability thereafter.
Throughout the past
three months, Bitcoin has endured a continuous sell-off. Although it has demonstrated
some stability in the $3,500 to $4,000 range in January, the range is at risk
of being broken as Bitcoin falls to the low $3,000 region.
As Hsaka, a
cryptocurrency trader suggested, it is possible that Bitcoin recovers to
mid-$3,500 and avoid testing the $3,000 support level. But, the lack of
momentum in the crypto market may prevent the dominant cryptocurrency from
recovering in the short-term.
Previously, analysts
including DonAlt stated that a quick move to the $2,000 to $3,000 range for
Bitcoin is highly likely if the asset does not rebound with strength in the low
$3,000 region.
“Sitting in the last
buy zone before new lows. Cut some of my buys due to the breach of the top of
the zone. Looking to re-add them if it is reclaimed. If green fails I expect a
quick move into the $2,000s. If it holds $4,000 is on the cards,” the analyst said.
In
the short-term, at least until the end of the first week of February, it will
remain uncertain whether Bitcoin can hold onto the tight range it has
maintained since early January or fall to a new support level.
Expect Extended Bear Market
Generally,
both analysts and traders expect the current bear market to extend throughout
the first half of 2019 before a proper bottom is established and the market
begins to recover.
One
positive factor in the mid-term growth trend of the cryptocurrency sector is
that startups believe the crypto winter has not been as bad as previous corrections
even though it is the worst on paper in terms of length.
Boost
VC co-founder Brayton Williams told Coindesk:
“The
investment money is returning back to the norm of difficult to obtain. I think
the ‘winter’ is greatly exaggerated. We are just back to normal behaviors.”
As
seen in the deals of Nasdaq and Fidelity’s venture capital arms, established
companies within the cryptocurrency sector are not finding it challenging to
receive funding, which is optimistic for the health of the industry.
Last
month, CCN reported that Nasdaq and Fidelity invested
$28.5 million in regulated crypto futures market operator ErisX in a highly
anticipated deal.
Click
here for the original article.