The cryptocurrency market is experiencing a “renaissance of interest”. On May 16, the daily cryptocurrency trading volume reached its historic high of $120 billion. BTC attracts buyers every time after short declines. All this indicates that there are not so many pessimists on the market right now. The growth of Bitcoin by 50% over the past month has caused a new surge in FOMO and simply left the bears on the sideways.
Technical analysis suggests that the market is “settling down” after an impressive rally. Important signals for the bulls can be dynamic above the $8,300 mark, which was resistance level since last July and during the previous week. Alternatively, a decline below $7,000 could be a signal that the current growth impulse could not pass $8,000, which could trigger a stronger correction.
Since the beginning of 2018, the infrastructure of the crypto market has grown substantially, which allows the market to operate at peak levels. According to Diar, the number of transactions on the Bitcoin network reached record levels in April, however, their execution speed was 84% faster than in December 2017. However, along with the rush, the pool of unconfirmed transactions showed significant growth. At some point, the number of unconfirmed transactions reached 70K, decreasing to 13K lately. As the mempool was filled, the average transaction fee exceeded $2. Revenues from mining in April rose by 30% against March values. The transaction fee for the same period increased by almost 200%. Although the problems with commissions and scaling will remain, they are still softer now, which supports the prices in the background.
Market participants are increasingly recalling the halving coming next year (lowering the reward for the mined block). Past halving episodes caused asset growth. If we consider this event from the point of view of a decrease in supply against the background of an increase in demand, then an increase in price may be quite likely.
In addition, the prospect of the imminent appearance of Bitcoin and the main altcoins on the mass market supports the prices. While the crypto market participants are waiting for the launch of the cryptocurrencies from Facebook (NASDAQ:FB) or Telegram, the Lite.IM bot is already running on WhatsApp, which allows the messenger users to send each other BTC, ETH, LTC, as well as the token of the ZTX project.
Thus, the solutions are already there, the future is in marketing. It is likely that such decisions will become a kind of “test” of the demand for the product before the versions from IT giants. No matter how, the user base with coverage of billions of people, weak economies with unstable national currencies – this is really a serious foundation for a significant increase in demand for cryptocurrencies.
The FxPro Analyst Team