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Bitcoin Price Crosses $7,100 as Recovery Becomes More Persuasive

Bitcoin’s recovery continued to gather steam on Wednesday, as prices crossed $7,100 for the second time in as many days. This has sparked cautious optimism in the cryptocurrency market, as evidenced by another strong showing for altcoins and tokens.

BTC/USD Price Update

The bitcoin price notched a fresh three-week high on Bitfinex Wednesday, touching $7,139.40 in overnight trading. At press time, BTC/USD was trading hands at $7,081.70. The leading digital currency has gained 1.6% compared with 24 hours ago.

Traders can expect a slight pullback now that BTC has entered overbought territory on the Relative Strength Index (RSI). However, this is expected to be short-lived as momentum continues to build.

BTC trading volumes totaled $4.4 billion on Wednesday, according to CoinMarketCap.

Bitcoin’s steady grind has rubbed off on other digital currencies, which are collectively trading at multi-week highs. According to CoinMarketCap, the total value of all crypto assets in circulation crossed $232 billion on Wednesday for the first time in over three weeks. As a result, bitcoin’s share of the overall market slipped to 52.7% from a high near 54% during the weekend.

Cautious Optimism Builds

Cautious optimism is slowly returning to the crypto arena following the worst bear market in recent memory. Since bottoming near $189 billion, the cryptocurrency market cap has recovered more than $40 billion in lost value.

A sharp decline in bitcoin’s volatility has underpinned the latest recovery, a sign that the BTC market was gradually maturing after years of massive price fluctuations. Bitcoin’s daily trading range has narrowed significantly over the past two weeks, possibly setting the stage for a more sustained recovery in the near term.

Action in the futures market seems to have contributed to bitcoin’s newfound stability. As Hacked reported Monday, bearish calls on bitcoin futures declined last week to the lowest level on record. According to COT data issued by the U.S. Commodity Futures Trading Commission (CFTC), the net position on CME bitcoin futures totaled -1,266 in the week ended Aug. 21. Short positions declined by 210 contracts compared with the previous week.

While there is no immediate catalyst for the sudden shift in sentiment, investors appear to be accepting the SEC’s cautious approach to approving the first bitcoin exchange-traded fund. Last week, the agency issued a wholesale rejection of nine bitcoin ETF applications. Following a brief dip, market prices quickly rebounded.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

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