Crypto markets extended small gains on Thursday with prices of bitcoin and ether rising by 3% in the past 24 hours. Major cryptocurrencies saw little movement as XRP increased 3.3%, while Shiba Inu’s SHIB gained 6%.
The moves showcased a recovery in the markets, which started last weekend, after a plunge last month. Total market capitalization crossed $2.12 trillion, adding 2.1% in the past 24 hours. Altcoins outpaced the growth of major cryptos, which led to a decrease in the bitcoin dominance index by 0.4 of a percentage point to 39.6%.
Leading the gains in altcoins was FLOW, the token of gaming network Flow. The token surged 11% on Thursday after the mobile gaming app using the network was officially licensed by the International Olympic Committee (IOC) to develop a game based on the Winter Games in Beijing, as reported.
Bitcoin continues to see institutional demand
Some analysts said bitcoin saw institutional demand as prices recovered from under $35,000 to over $45,000 in the past week.
“The benchmark cryptocurrency continues to be in demand after strengthening above the 50-day moving average,” FxPro analyst Alex Kuptsikevich wrote in an email to CoinDesk. “This confirms the breaking of the downtrend of the previous three months.
“For the third week in a row, institutional participants have been investing in crypto funds, according to CoinShares. On the intraday chart, you can see purchases at the close of the American session, which clearly demonstrate the interest of the institutionalists in this region,” Kuptsikevich noted.
Moving averages (MA) are price chart indicators that use past prices to calculate and identify the trend direction of an asset. Bitcoin crossed its 50-day MA earlier this week at the $42,500 price level and has stayed above it since. Continuation of this price movement would imply strength and set bitcoin for a move toward $49,000.
The RSI (relative strength index) values for bitcoin hovered at favorable levels. “The RSI indicator on the daily charts is now at 61, still far from the overbought zone, confirming that the market is still far from overheating,” Kuptsikevich said.
The price chart tool calculates the magnitude of price changes, with readings above 70 being considered “overbought” and below 30 considered “oversold,” which may precede a change in trend.
In financial news, the Bank of England’s quantitative easing program – which helped prop asset prices after the impact of the coronavirus – was on course to book a $4.1 billion loss, according to reports. Meanwhile in India, Shaktikanta Das, the head of the country's central bank, compared cryptocurrencies to the Dutch tulip bulb market bubble of the 17th century.
“Investors in cryptocurrency should keep in mind that they are investing at their own risk. They should also keep in mind that the cryptocurrency has no underlying, not even a tulip,” Das said on Thursday. India had earlier this month proposed to levy a 30% tax on crypto transfers in the country.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.