The cryptocurrency market has rebounded over the past 24 hours, as the bitcoin price rose by around 3 percent and other major cryptocurrencies such as Ethereum and Bitcoin Cash recorded gains in the 3 to 8 percent range.
Bitcoin and Ethereum
Since bitcoin’s failed test of the $10,000 support level and the scheduled SEC hearing on Ethereum on May 7 did not occur, both bitcoin and Ethereum have struggled to record gains against the US dollar. Most tokens such as Ziliqa (ZIL) and 0x (ZRX) outperformed both cryptocurrencies, demonstrating gains of over 20 percent.
Earlier this week, the Federal Reserve released a report which noted that the launch of bitcoin futures has had a negative impact on the bitcoin price, and that bitcoin has not been able to sustain its momentum since CME and CBOE introduced bitcoin futures to the US market.
“The peak bitcoin price coincided with with the day bitcoin futures started trading on the CME… we argue these price dynamics are consistent with the rise and collapse of the home financing market in the 2000s,” said the Federal Reserve of San Francisco.
Analysts have argued that bitcoin futures have allowed institutional investors and retail traders to manipulate the bitcoin market by shorting the cryptocurrency and selling massive amounts of bitcoin contracts to cash out their short contracts.
As such, the cryptocurrency community did not necessarily react well to the entrance of the New York Stock Exchange (NYSE) to the cryptocurrency market, until reports revealed that the parent company of NYSE has been preparing a proper bitcoin exchange, not a futures market.
Over the past three days, the bitcoin price has recovered from $9,000 to $9,300, and is continuing to increase in value. The Relative Strength Index (RSI) of bitcoin is 55, which signifies that the dominant cryptocurrency is in a neutral zone and is neither overbought or oversold. But, both exponential and simple moving averages show a negative short-term trend for bitcoin, which may allow the bitcoin price to remain in the $9,300 region.
Still, analysts including Wall Street’s Fundstrat founder Tom Lee expressed his optimism towards bitcoin in the short-term given that many institutional investors and retail traders will be motivated to invest in the cryptocurrency market after the biggest cryptocurrency conference launches.
“Already one of the largest crypto conferences in the world, attendance this year is up dramatically and coming at a time when Bitcoin/Crypto is down YTD. Hence, we expect the Consensus rally to be even larger than past years,” said Lee.
Ziliqa has seen a 25-fold increase in its value since its initial coin offering (ICO) in December and its recent 20 percent increase in price led the market valuation of ZIL to reach $1.4 billion. Other tokens such as VeChain (VEN) and ZRX have also recorded large gains against bitcoin and the US dollar, making up for their losses throughout the first quarter of 2018, a period during which tokens fell significantly more than major cryptocurrencies.