‘All signs pointing to a Santa Claus rally in the crypto market’
The cryptocurrency world is stirring.
A technical indicator for an index tracking some of the largest digital currencies suggests the crypto industry could be poised to break out of its recent malaise and rally at year end.
The MACD, or moving average convergence divergence, gauge for the Bloomberg Galaxy Crypto Index entered its first positive divergence in a month. The move corresponds with an upward trend in Bitcoin, which makes up around 30 per cent of the fund. Bitcoin is up for the seventh-straight day and is at its highest level in two weeks, hovering around US$6,500.
Long-term trend lines in Bitcoin’s Directional Movement Index (DMI) also showed the digital token entering a new bullish phase this week.
“The technicals look great and the fundamentals are fantastic,” said Mati Greenspan, senior market analyst at eToro, in an email. “All signs are pointing to a Santa Claus rally in the crypto market.”
XRP, the cryptocurrency also known as Ripple and the index’s third-largest member, also moved higher this week.
But Bitcoin and other cryptocurrencies have been volatile all year and the recent moves don’t excite everyone. Bitcoin should be worth half its recent value, based on volume trends and historical pricing, wrote Bloomberg Intelligence analyst Mike McGlone in a note. “Wish them luck, but most of our indicators remain negative,” he said.