SFOX, an institution that is has become a prime cryptocurrency dealer, has released a report claiming the cryptocurrency trading market is “mildly bullish” entering the month of April. The report, published on April 4th, collected a wide swath of data on the major players in the industry. Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Bitcoin SV and Ethereum classic were the currencies included in the SFOX Multi-Factor Market Index. The report looked at the price, volume and volatility of the coins across eight major exchanges to establish a pattern of performance for the coins.
The report shows the market as currently being “mildly bullish,” with a few of the coins reaching volatility levels that did not correlate with Bitcoin. This is a shot in the arm for the industry as it shows that the market is moving away from being Bitcoin-centric. The market being able to grow outside of Bitcoin is an important step in the viability of blockchain as a global tool, as opposed to being tied to one cryptocurrency and being ignored by the mainstream consciousness.
Litecoin, Bitcoin Cash and Ethereum all had amazingly independent volatility movements. The research team is sure that the market at large is starting outside of Bitcoin at a faster rate than what was previously expected.
Bitcoin’s price correlations to coins outside the top 3 were more muted. Ethereum Classic had a correlation score of 0.685 (where a 1 is a complete correlation). As a comparison, the correlation score between Litecoin and Bitcoin was 0.453. However, Ethereum Classic did at one point manage a correlation score of 0.21 – which shows a willingness on the part of the market to focus directly on altcoins rather than how they fit into the current hierarchy.
The recent bullish market has seen Bitcoin break the $5000 threshold. It quickly pulled back, but market analysts are expecting a push toward $6000 in the near future. Brian Kelly, CEO, and founder of BKCM LLC has said that cryptocurrency markets will be able to find their bottom when this push to $6000 finally happens.
Talking on CNBC’s “Futures Now” show, he further stated that this is happening among improving fundamentals and greatly increased institutional sentiment. The institutional sentiment is a key aspect of currency trading, as it means that regulatory pressures are being dealt with and are accurately priced into the market.
This is in contrast to earlier prices rises that happened while the regulatory landscape was more unstable. Institutions now know what to expect and with many regulatory frameworks being finalized, there is a measure of long term stability in the offing for the cryptocurrency.
He went on to state that the current rise in cryptocurrency is mainly due to traditional investment institutions taking cryptocurrency more seriously. The regulatory backing that has been offered via new frameworks has helped calm fears from these parties. These parties are now making moves into a market that was previously dominated by small, individual brokers with a vested personal interest in cryptocurrency.
While some corners of the cryptocurrency market are happy with this news, not all share the same sentiment. Social media chatter has indicated that some feel as if these large institutions are moving in on the personal territory. These early adopters are wary of traditional financial behemoths wading into their area.
However, the vast majority are happy that cryptocurrencies are seen as a legitimate avenue for investment. Arthur Mex, a notorious cryptocurrency bull, sees the market being able to claw back to $10 000 in 2019. The Bitmex CEO also thinks that $20 000 is a distinct possibility once the psychological barrier of $10 000 is broken. He cites the rapid increase from $10 000 to $17 000 in under a month. He warns that an overcorrection could also take place, as soon after Bitcoin hit $17000 it came down to $10 000 again. This started a sell-off where the lows stood at around $3000.
Recent reports from a wide variety of sources all seem to point to an extended bull market and whatever happens, 2019 promises to be an interesting time for cryptocurrency trading. Particularly since large institutions are stepping in and they have far more experience with trading than the people who had previously been a mainstay of the industry.