The crypto markets have continued to climb higher after seeing two days of large and widespread gains across nearly all major cryptocurrencies. Today’s price climb has led many investors and analysts to believe that the markets have already established a long-term bottom.
Despite there being a bullish sentiment that is currently spreading through most cryptocurrency communities, analysts are now pointing to the importance of transaction volumes as an indicator of where the markets are heading next.
Bitcoin and XRP See Sustained Rise in Transaction Volume
Although there may not be a fundamental reason behind the recent crypto market surge, one factor that may be contributing is an increasing amount of transaction volume that may have an impact on various cryptocurrencies prices.
Naeem Aslam, the chief market analyst at Think Markets U.K., recently told MarketWatch that he believes that Bitcoin will see increased fundamental strength in the coming months, which could help contribute to positive price action.
“The cryptocurrency king is on track to secure its first positive month since July 2018… With the wind of change blowing, the fundamentals are likely to improve in the coming months for the cryptocurrency space. The hopes are pinned on the improvement of the transaction volume for on-chain transactions. This will attract growth because of a larger number of industries becoming part of this infrastructure,” he said.
Mati Greenspan, the senior market analyst at eToro, shared a similar sentiment to Aslam, and also noted that Bitcoin’s recent price ascent occurred at the same time its transaction volume began to increase.
Greenspan also noted that XRP has seen an influx of transactions in late-January after XRP’s transactions dropped off a cliff on December 11th, which is about the time that XRP fell back towards its 2018 lows in the mid-$0.20 region.
“Transactions in XRP went quiet from December 11th but came back with a vengeance on January 26th,” he said.
Crypto Markets May Not be Out of the Woods Yet
Although the recent market surge that has sent many cryptocurrencies up 10% or more is certainly positive for investors and traders alike, Greenspan warns that a tight correlation between major cryptos and Bitcoin could signal that bear market is not yet over.
“Despite recent optimism, crypto correlations remain strong… Major coins still bearing a positive correlation to $BTC of about 0.8, which is very high… Yet another sign the [bear] market might not be over just yet,” he warned.
At the time of writing virtually all major cryptocurrencies are trading up, with Ethereum, XRP, EOS, trading up 1.2%, 3.2%, and 5.1%, respectively.
Copyright © 2023 iCryptome.com
- SEC Charges ICO Research and Rating Provider With Failing to Disclose It Was Paid to Tout Digital Assets
- GoldGram to Deploy a Native GGC Token on R3’s Blockchain Platform Corda
- Tokensoft Facilitates Launch of First Blockchain IPO With INX Limited
- These are common declutter mistakes you might be making
- Revolutionary Metaverse play-to-earn project driven by blockchain technology
