The market psychology is the prevailing sentiment of the participants that regulates the buy and sell orders. Until January the cryptocurrency traders were waiting for a bottom to set it in. In comparison with the 2014-2015 bear cycle, a couple of bottoms were predicted for Bitcoin; bottom at $2700 and $2100 level being the most famous calls. However, contrary to popular belief the price of Altcoins especially Ether and Litecoin have gained 100% since December.
Did the Cryptocurrency Market Bottom in December?
The Altcoins including Ether (ETH), Litecoin (LTC) and XRP too were expected to follow Bitcoin’s bearish momentum. The bottom was supposed to form after the same duration of time as it did in 2014. However, the market enthusiasm and broader acceptance rate this time around might have kicked the bottom in December only.
Litecoin Price on December 15 was $23. Similarly, Ether (ETH) Price on December 15 was $82.8. The total market capitalization of the cryptocurrency markets had reached $100 billion before the trend reversal began. While XRP and XLM still trade in the lower range of $0.295-$0.315 and $0.080-0.085 range, Ether and Litecoin prices have doubled since then. Bitcoin is still trading in the $3000-$4000. Nevertheless, a break out above the $4700 and $6000 would firmly confirm the revival of bullish momentum.
Litecoin And Ethereum Gain on Fundamental Developments
Litecoin is currently trading at $55, the bullish momentum in Litecoin can be attributed to the Litecoin Foundations conviction to add fungibility to its protocol. On the hourly chart, the 100-Day SMA crossed the 200-Day SMA line which is termed as a ‘golden cross‘ by the traders.
The last instance of this cross was observed during the beginning of the year 2017 on the LTC/BTC chart. The Price of Litecoin soon rose exponentially before the correction began. If the current ‘golden cross’ materializes an upside to $100 can be achieved on LTC/USD soon.
Ethereum is currently trading at $137, after recovering from the rise till $164 last week in anticipation of the Constantinople update. Ethereum’s plans to scale its Blockchain to accommodate a large number of tokens on its platform had been due since 2018. The new ‘Ethereum 2.0‘ update would implement POS and Plasma making Ethereum the number one platform for Dapp (Decentralized Applications) development.
Moreover, the total market capitalization of the cryptocurrency markets has increased by 30% during the same time frame. Stochastically, on comparison with the 2014-2015 bear market and market sentiments, it seems about right that bottom had set it on most cryptocurrencies during the second week of December and we are looking at consolidation now.
Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com