The crypto market has been like a rollercoaster the past couple of days. Yesterday, Bitcoin (BTC) plunged from $3,620 to $3,500 in less than 30 minutes, and today, Bitcoin rallied from $3,530 to $3,670 in about an hour.
Afterward, the price of Bitcoin slowly increased to $3,700 but has now dropped a bit and is near $3,660 as of this writing. This represents a four percent gain for Bitcoin (BTC) in the past day. Other major cryptocurrencies have done even better.
Ripple (XRP) is up five percent; Ethereum (ETH) is up 10 percent; Bitcoin Cash (BCH) is up six percent; Bitcoin SV (BSV) is up five percent; EOS is up nine percent; Stellar (XLM) is up five percent; Dash is up five percent; Dogecoin (DOGE) is up four percent; and Litecoin (LTC) is up six percent. IOTA, which is the number one directed acyclic graph (DAG) cryptocurrency is up five percent. The privacy coins Monero (XMR) and Zcash (ZEC) are both up six percent.
The biggest success story of the day is Tron (TRX) with a 15 percent rally. Tron (TRX) has truly been on a rollercoaster this past month with a 170 percent price increase followed by a 36 percent price drop, and now today’s rally. Today’s price action could possibly be a double peak, which is common when speculative bubbles pop. Yesterday it was speculated that the current Tron (TRX) market may turn into a pump and dump.
The rallies of all major cryptocurrencies have caused an increase in the total cryptocurrency market cap from $117 billion to $123.5 billion (5.5 percent). Currently, the cryptocurrency market cap is almost exactly the same as it was before yesterday’s crash. Therefore, today’s price action has simply recovered yesterday’s losses.
Ethereum (ETH) is perhaps back to rally mode because of speculation that the Constantinople hard fork coming in less than a few days will be a good thing for Ethereum (ETH) since it slashes the inflation rate and lowers transaction fees. Ethereum (ETH) has gained ground on Ripple’s (XRP) market cap and is only $300 million away from re-taking the number two spot, whereas yesterday Ethereum (ETH) was $900 million behind Ripple (XRP).
Miners are the ones losing out from the slashing of the Ethereum (ETH) inflation rate, i.e. the block reward, from three Ether to two, and tension between miners and developers may cause price turbulence for Ethereum (ETH) and ERC-20 tokens in the coming weeks. Numerous cryptocurrencies in the top 100 on CoinMarketCap are ERC-20 tokens.
Perhaps an event that could influence the crypto market in coming days is the Bitcoin futures expiration on the Chicago Board Options Exchange (CBoE) on Jan. 16. January appears to be a month dominated by short sellers, so perhaps short sellers on CBoE will bang the close and cause Bitcoin’s (BTC) price to decline right before expiration to increase their short-selling profits.
$3,900 continues to be the level to watch since that is likely where Bitcoin futures traders on CME took out their monthly short positions. Bitcoin (BTC) has some freedom to go upwards before encountering strong resistance at that level. As the Jan. 25 CME Bitcoin futures expiration approaches, the chance of a Bitcoin (BTC) price drop becomes more likely.