Bitcoin and other cryptocurrencies rallied Monday, but some traders still see the largest crypto as vulnerable to more declines, particularly as bitcoin continues laboring below the important $4,000 level. Even with Monday’s upside, bitcoin was barely residing above $3,700.
That after the major crypto shed about 80% of its value in 2018. Among the issues plaguing bitcoin last year were the ongoing unwillingness of U.S. regulators to approve bitcoin-related exchange traded funds as well as data indicating that mainstream acceptance and adoption of the digital currency are declining.
“The weakness in the short-term price trend of BTC led the market to demonstrate volatility on the downside. More than $5 billion was wiped out of the crypto market and major assets like Ethereum recorded a six percent drop,” reports CCN.
Improvements to the blockchain and other crypto infrastructure as well as increased adoption of the asset class by high-level investors could bolster digital assets.
What’s Next for Cryptocurrencies
Heading into 2019, the outlook for bitcoin and rival cryptocurrencies remains murky due in large part to increased regulatory efforts and lack of mainstream adoption.
“Generally, both analysts and traders expect Bitcoin to fall to the low $3,000 region in the days to come. Some have suggested that a strong buy wall below the $3,000 mark may allow the dominant cryptocurrency to recover, implying that a 10 percent fall remains a possibility,” according to CCN.
While bitcoin and the broader cryptocurrency space tumbled last year, cryptocurrency as an asset class did attract new investments. In fact, venture capital funding in the crypto space was robust last year even as digital currencies tumbled.
Increasing volume could support more upside in the major cryptos or it could be a sign more traders are poised to flee the asset class.
“n the last 12 hours, the daily volume of the cryptocurrency market has recovered from around $13 billion to $16 billion, by 23 percent,” reports CCN. “The volume of Bitcoin has increased from $4 billion to $5.1 billion, demonstrating a fairly large jump in trading activity in a short period of time. The resistance in the $3,400 to $3,500 range may prevent an abrupt fall by a large margin in the upcoming days.”
For more information on the cryptocurrency market, visit the Bitcoin category.