It appears that China is waking up to blockchain, and this did to the market what Bakkt’s futures failed to. President Xi Jinping urged further adoption of blockchain-based technology, and his statement might have been one of the reasons for Bitcoin’s 40% surge over the past few days.
Indeed, Bitcoin had its best week since May. It’s not the first time that statements from China have rocked the markets, although this move left most technical analysts surprised. It also saw a lot of short positions liquidated, especially for those traders who were counting on a correction to $6,000. Now the market is pulling back, and investors are trying to figure out whether the trend is strong enough to sustain itself or if it’s just a bull trap.
The timing of the news from China came as the market entered fairly bearish conditions after the price broke beneath support around $8,000. However, we pointed out last week that market sentiment usually changes in an instant. Indeed, just before the end of the year, the Bitcoin market has re-calibrated and marked a successful 2019. However, Bitcoin’s regulatory framework is still not good enough, as the existing infrastructure fails to enable Bitcoin’s integration into the traditional economy.
The war between Bitcoin and banks is just beginning, and it will definitely take some time to see sufficient liquidity. Banks are still having difficulties, and regulators don’t allow new companies to operate in the field due to a lack of clarity regarding the rules. Despite previous predictions that 2019 would be the year of regulation, it seems to have been just the opening shot in terms of financial regulation of cryptocurrencies.
Altcoins are also rising up and have maintained their value with respect to Bitcoin. Some of them have had very impressive performances. Chinese altcoins such as NEO and TRX were especially prominent over the past few days. Despite this, Bitcoin’s dominance rate wasn’t affected, and it even increased after the sharp price increase.
In conclusion, as we approach the middle of the last quarter of 2019, Bitcoin is as volatile and unexpected as always. We may certainly see another leap and an attempt to break existing records, or the price could plummet within days. This is definitive proof that there’s never a boring day in the cryptocurrency markets.
Market Cap: $251.4B
24-Hour Volume: $95.1M
BTC Dominance: 67.5%
BTC Shorts (BFX): 6.3K BTC
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This week we’ve analyzed the Bitcoin, Ethereum, XRP, BitTorrent, and NEO markets – click here for the full price analysis.
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