Supported by the 2 percent increase in the price of Bitcoin, major cryptocurrencies including Ethereum have demonstrated renewed short-term momentum.
Ethereum (ETH), Bitcoin Cash (BCH), and many other small market cap cryptocurrencies recorded gains in the range of 4 to 12 percent, with BCH recording a solid 10 percent surge in value.
The volume of the cryptocurrency market, which as CCN reported on November 6 remained at around $3 billion, has increased to $16 billion from less than $10 billion last week, showing a 60 percent increase in volume within a seven-day period.
Where are Bitcoin and Ethereum Headed?
Squeeze, a cryptocurrency trader, stated that given the three-month consolidation period of Bitcoin in the mid-$6,000 region, the probability of BTC initiating a significant surge in the short-term remains relatively low.
The launch of the Bakkt Bitcoin futures market on December 12 could be a major catalyst to impact the short-term price movement of BTC. Until then, the price of BTC is likely to remain in the $6,400 to $7,000 range.
BTC has been consolidating at this range for months. Was expecting the Descending Triangle to breakdown but didn’t happen. Fundamentally looking more likely towards a rally upwards till Bakkt launch (12 Dec),” he said.
Currently, BTC is eyeing a breakout of the $6,600 resistance level with the potential to surpass the $6,800. The dominant cryptocurrency has only been able to breakout of the $6,600 mark once in mid-September and since then, it has failed to test the level.
Given the increase in the daily trading volume from $4.2 billion to $5 billion over the last 24 hours, a minor short-term price movement to $6,600 remains a possibility.
“Resistance levels I’m looking at are horizontal red lines. $6,600 / $6,650 next. Levels should be fairly obvious and have previously acted as resistance, the more, the more meaningful. No point in being too precise, small increments represent noise,” said technical analyst Alex Kruger.
Tokens are Rising, But SEC May Have an Impact
At the D.C. Fintech Week conference, US Securities and Exchange Commission (SEC) director William Hinman stated that any token that can be recognized as an instrument that allows an individual or a company to place an expectation of return will be considered a security.
“If someone’s offering an instrument for money or other consideration to a third party, and that third party expects the offerer to generate a return or so something that will increase the value of the coin or token or whatever they want to call it, and there’s that expectation of return, we’re generally going to see that as a securities offering.”
Based on the statement provided by Hinman, a large group of tokens can be considered as securities under existing US laws and initial coin offering (ICO) projects that have initiated token sales with the participation of US investors could lead to the crackdown by the SEC.
While many tokens have recorded gains in the range of 5 to 20 percent over the last week, regulatory uncertainty around tokens and their regulatory nature could lead to a decline in the value of tokens in the weeks to come, as the SEC releases its new guideline.
Featured image from Shutterstock.
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