After several days of turbulence in the cryptocurrency markets, Bitcoin has now climbed above the $3,500 level, leading the altcoin markets to rise slightly. Today’s upwards move may have validated yesterday’s support levels as short-term bottoms, although this will only be confirmed if the markets are able to continue climbing upwards.
At the time of writing Bitcoin (BTC) is trading up nearly 2% at its current price of $3,500. Yesterday, Bitcoin respected $3,400 as a level of support, and bounced marginally each time this price was touched. Today’s upwards move validated this price level as a short-term bottom, although only time will tell as to whether or not $3,400 is able to hold as a strong support level long-term.
Cryptocurrency Bubble Not Unique or Special
Although there is no denying that the cryptocurrency bubble popped in 2018, its massive decline is not unprecedented and similar declines have been seen before in multiple other markets that ultimately grew to far surpass their previously established all-time-highs.
Russ Mould, the investment director at AJ Bell, recently spoke about the fact that the cryptocurrency market’s post-bubble price action is fairly standard, saying:
“This brutal bear market looks like so many that we have seen before across a wide range of asset classes. A succession of rallies have tempted true believers and speculators alike to hold on, or even dive in again, only for those surges to become vicious bear traps, leaving holders of the cryptocurrency facing deeper and deeper losses.”
He further added that the Nasdaq Composite crashed 75% after the dot com bubble popped, and that it attempted multiple rallies “with at least eight of them failing and dragged investors deeper into the mire before the benchmark bottomed in March 2003 after a top-to-bottom loss of 75%.”
Mould concluded with a warning to cryptocurrency investors, noting that it could be a while before the markets return to, or surpass, their all-time-highs.
“Even if bitcoin is over the worst, it may be a long road for those who piled in near the top,” he said.
Altcoins Trade Up Slightly
Bitcoin’s climb to $3,500 has led most major altcoins to trade up, albeit slightly, with the market’s best performing cryptocurrencies being EOS and Litecoin.
At the time of writing, EOS is trading up nearly 7% at its current price of $1.99. Although EOS has posted decent gains so far today, it has been unable to hold above the $2.00 mark, which may mean that further losses are right around the corner.
Litecoin (LTC) is currently trading up nearly 4% at its current price of $24.83. LTC appears to have established the $23 region as a level of support and has bounced at this price on multiple occasions over the past week.
XRP is following Bitcoin’s trading pattern and is currently trading up nearly 2% at its current price of $0.31. XRP has found support around the $0.30 region, and only briefly broke below this price before bouncing yesterday.