Bitcoin rally brings new vigor to cryptocurrency market

Proving the skeptics in the investment world wrong, crypto giant Bitcoin bounced back from the recent lows and crossed the $5,000-mark on Tuesday. It has reached the highest level in four months, gaining more than 60% since hitting a one-year low in December last year.

Given the strong uptrend, it is expected that the momentum will gather pace in the coming days. The virtual currency has gained 24% since the beginning of the year. According to reports, Bitcoin traded slightly above $5,000 in the Asian and European markets after trading started, surprising investors who struggled to ascertain the reason for the rally.

The current rally is reminiscent of the sharp gains seen more than a year ago when Bitcoin reached a record high of around $19,000. There is no doubt the latest growth will infuse fresh confidence among investors, for it comes after a long gap and there has been a consistent uptick since the beginning of the year. The trend indicates that the market is likely to witness strong buying activity in the coming weeks, in stark contrast to the final months of 2018 when the movement was southward.

The current rally is reminiscent of the sharp gains seen more than a year ago when Bitcoin reached a record high of around $19,000

The positive sentiment was visible in the performance of the other major digital currencies also, with Ethereum and Litecoin rising 8% and 13% respectively since the previous closing. It shows that the crypto market is probably getting back on track after a long lull.

Meanwhile, it is also speculated that the recovery could be short-lived as it can be attributed to the ongoing acceptance of cryptocurrencies by mainstream investors, especially after some of the leading stock exchanges initiated crypto trading on their platforms. Also, unlike in the past, the latest upswing comes after a big crash in which Bitcoin lost about three-fourths of its value, which makes some market watchers believe that sharp intraday gains are natural after sharp slumps.

Also see: Investor caution mounts as crypto market braces for a long lull

While the market remains divided on the reliability of cryptocurrencies as a serious investment option, the current momentum will definitely give a much-needed boost to Bitcoin and its investors. Earlier, experts had suggested that a near-term rebound is imperative for the virtual currency to maintain its status as a bankable investment asset.

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