Home / Cryptocurrency / Back over $ 200 billion: 3 reasons why the encrypted prices could go higher

Back over $ 200 billion: 3 reasons why the encrypted prices could go higher

The cryptocurrency market has historically made history for all the wrong reasons, in particular recently overcoming the plunge of the infamous bubble Dot-Com in the early 2000s.

That said The cryptocurrencies tend to make recoveries when all hopes are apparently lost and today's price action on the world's second largest cryptocurrency, ether and many others is no exception.

At the time of printing, many of the top 10 cryptocurrencies for market capitalization report gains of 24 hours above 10 percent, including monero (XMR), litecoin (LTC) and EOS. Ether (ETH) is the leader of the group with a 17% price increase. Moreover, the total market capitalization has risen by over $ 200 billion, after falling lower this week.

Still, it's too early to call any kind of long-term bullish reversal in the market, but there are three encouraging cryptocurrency signs you could see a much needed relief at least in the short term.

1) Recovery of Aether

Up to now, the price of the Ethics / USD had fallen by more than 40% from 5 September and 85% from its historical high to the north of $ 1,400 set last December.

Today, however, tells a different story. Starting at a low of $ 167.32 yesterday, the price has recovered more than 20 percent to a maximum of $ 207.67 at 24, according to data from the Bitfinex Stock Exchange.

ETH / USD Daily Chart

As seen in the chart above, the recent price recovery can be attributed to the search for support on the lower trend line of a falling wedge, a bullish inversion model, in an area of historical support represented by the green box.

In addition, the daily RSI showed bullish divergences, thus giving one more reason for a rescue rally.

In order to provide confirmation of a broader turnaround, the price should close a daily candle, more preferably weekly, above the wedge resistance with a noticeable increase in volume.

A common method for estimating the breakout goal of a fall wedge is to add the base interval to the breaking point. Because the base interval of this wedge is higher than $ 900, a long-term measured price target would be in the $ 1100 area if the price were to burst near $ 230.

Many alternative currencies they are built on the blockchain ethereum, so a strong recovery from the ETH would probably result in a recovery for others too.

2) BTC Short-term strength

The future perspectives for cryptocurrencies generally depend heavily on bitcoin (BTC), the largest cryptocurrency in the world by market capitalization.

Falling 70 percent from the record $ 20,000 level reached in December, BTC could scare the most experienced investor. However, a closer look at the long-term technical chart reveals that cryptocurrency is silently plotting a bullish inversion model.

Weekly Chart

As we can see, the recovery of BTC from the $ 5,559 low in August set the first highest minimum model of the year, the previous minimum was $ 5,755 in June. In addition, the recent sell-off ended at $ 6,119, which means another lower minimum was created.

The trendline linking the highest lows indicates a long-term bearish breakdown. So, there is reason to be optimistic as long as prices remain above the trend line.

What the bulls need now is that BTC sets a higher maximum by passing above the July high of $ 8.507. This would confirm a long-term downtrend shift and could generate a sustained increase of more than $ 10,000.

3) Appetite of risk in global markets

Risk resources around the world have resumed an offer in the last 24 hours on reports that United States and China are returning to the negotiating table.

For example, the AUD / JPY pair, which is widely regarded as a global market risk barometer, has increased by 1 percent at the time of printing. Meanwhile, the dollar index is down 0.24%.

Clearly, investors hope that these talks can give results, however, trade wars would only end if the US officially lowered tariffs. More importantly, past experience suggests that such discourses tend to break down in a few days.

Having said that, the renewed hopes for trade talks between China and the United States could keep the risk assets well offered in the short term.

In addition, Turkey increased rates by 625 basis points today to save its uncertain currency and the move pushed the highest stock markets around the world.

This will probably be a good omen for cryptocurrencies as the investor community still considers bitcoins and other innovations as risk assets.

Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.

Bull-run via Shutterstock; Charts via TradingView

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