After a punishing year, cryptocurrency enthusiasts looking for a fresh start in 2019 are being greeted by some positive technical signals.
The GTI Vera Convergence Divergence indicator is suggesting Bitcoin is in its longest buying streak in six months. Should buying pressure persist as it has over the past 13 days, Bitcoin could continue to see a rise in prices following last year’s 74 percent decline, the measure predicts.
“Usually the best thing to do is to buy low and sell high. So if we are going by technical analysis we can very easily see on the chart that we are much closer to the bottom than we are to the top,” said Mati Greenspan, senior market analyst at eToro in Tel Aviv.
“I’m seeing an industry that is growing at a very rapid pace right now where we see companies that are involved in Bitcoin and blockchain hiring at a rapid rate,” Greenspan said. “We see new projects coming online. We see all kind of indication that people are getting more and more involved in the market.”
The end of selling related to the booking of taxable losses could be contributing to Wednesday’s bounce, said Mike McGlone, an analyst with Bloomberg Intelligence. “The reduction of that selling is a good reason for the bounce,” he said. “Now is about the duration of the bounce before resuming what is likely a longer-term bear market.”
Christmas has come early to beleaguered investors in cryptocurrencies such as Ether, which rallied as much as 46 percent as digital assets continue their December rebound.
“The market was just being very oversold and due for a bounce,” said Mike McGlone, a Bloomberg Intelligence analyst. “The entire crypto market is benefiting from the macro situation from the weaker U.S. dollar and issues with the administration.”
Ether, the third-largest digital currency after Bitcoin and XRP, jumped 37 percent to $148 at 11:11 a.m. in New York. The token had traded about $1,240 in January, just before the market collapsed followed last year’s speculative bubble.
“While crypto prices were falling, Ether was one of the hardest hit, so it stands to reason now that it is among the top gainers now that prices are moving up again,” said Mati Greenspan, senior market analyst at eToro, in an email.
The Bloomberg Galaxy Crypto Index is up for the fifth time in six days. Bitcoin gained as much as 5.9 percent and XRP jumped 18 percent. The index is still down 78 percent this year.