Digital currencies soar after China’s bullish blockchain comments
The cryptocurrency market continued to build on the weekend’s strong trading gains on Tuesday, following Chinese President Xi Jinping’s bullish comments towards blockchain technology. The impressive rebound in the digital currency market appears to be sustainable, as the number cryptocurrency by market capitalization, Bitcoin, holds firm above the psychological $9,000 level.
Chinese linked cryptocurrencies have enjoyed the strongest gains, although positive news regarding growing Bitcoin trading volumes has secured gains of close to thirty percent for the BTC/USD pair. News that the Bakkt futures platform had experienced new all-time high trading volumes helped reaffirm positive sentiment towards cryptocurrencies.
Many analysts are speculating that the recent announcement of increasing blockchain adoption from the Chinese government could be a game-changer for the cryptocurrency market and Bitcoin. Chinese state media has in fact gone as far as showing television programs on how Bitcoin works.
Digital currencies rebounded in value due to the notion that Chinese institutional and retail investors will start to purchase cryptocurrencies. With Bitcoin offering only a limited supply of coins, this has helped secure the bid-tone back in the BTC/USD pair.
The broader cryptocurrency market had seen a heavy bearish reversal from the best levels of the summer, with popular coins such as Litecoin and Ethereum suffering large double-digital losses alongside Bitcoin. The recent recovery could mark a meaningful price floor in the digital currency and possibly a return to its 2019 price peaks.
ETH/USD Daily Candlestick Chart | Source: ActivTrader
Ethereum had been severely overstretched to the downside, although price-action had shown few signs of bid-tone returning to the ETH/USD pair. Going forward, the ETH/USD pair will need to trade above the $198.00 to forge a stronger recovery towards the $269.00 level.
Written by Nathan Batchelor, External Analyst, ActivTrades
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