Cryptocurrency markets rallied in April, gaining value as they benefited from several tailwinds including stronger sentiment and declining regulatory concerns.
The broader digital currency market rose 63%, according to the MVIS CryptoCompare Digital Assets 100 Index (MVDA), a key benchmark based on the value of the top 100 largest digital assets.
Several major cryptocurrencies enjoyed sharp price increases during this period, in some cases doubling or even tripling in value. This robust recovery took place after cryptocurrencies suffered a rough March, where they lost more than 40% of their value, according to the MVDA.
This drop in value was part of a broader decline, where the digital currencies represented in the MVDA lost roughly two-thirds of their value between their early January and the end of March.
After experiencing this sustained weakness, optimism has apparently returned to the cryptocurrency markets, several analysts claimed. A handful of these market observers singled out waning concerns surrounding regulatory risk as helping to improve the mindset of investors.
“The bull market is back,” said Jeff Koyen, CEO of 360 Blockchain USA. “Ether and the other token platforms are bouncing back nicely, as fears over regulation are quieting down.”
He added that:
“Unless we get significantly bad news from a major regulatory agency, I think we'll see this momentum continue throughout the summer.”
James Song, founder and CEO of blockchain startup ExsulCoin, offered a similar point of view, stating that, “The sentiment around cryptocurrencies has changed and is generally positive,”
“Most of the downside risk is related to headline risk,” which has decreased substantially as regulators have softened their stance toward crypto, claimed Song. This decline in headline risk has placed upward pressure on digital currency prices, he asserted.
Tim Enneking, managing director of Crypto Asset Management, also spoke to the recent improvement in sentiment, singling out different factors as fuelling this optimism. Enneking pointed to the “enormous correction” that began in January, adding that the Mt. Gox trustee appears to have finished liquidating the exchange’s cryptocurrencies.
Further, he claimed that since Ether prices have been rising, companies that raised notable amounts of this currency by orchestrating ICOs have been holding the cryptoasset in expectation that it will enjoy additional gains.
Ether is one of the major cryptocurrencies that experienced significant appreciation in April, its price surging more than 60% during the month, according to CryptoCompare data.
The cryptocurrency, which has been used in a large number of ICOs in recent years, reached $711.64 in April, a roughly 80% increase from the start of the month.
While Ether rose sharply during the month, several major cryptocurrencies performed far better. TRON, an ERC-20 compatible currency that trades under the ticker symbol TRX, surged more than 206% in April, additional CryptoCompare figures show.
The TRX token climbed to as much as $0.1008 during the month, which represented a 243.6% gain from the start of April. The token experienced sharp appreciation as TRON benefited from positive news, including an announcement that exchange Bittrex planned to support TRON’s upgrade to a new blockchain, which is scheduled to take place June 21.
EOS, a digital currency that powers an innovative platform for decentralized applications, also experienced some robust gains in April, climbing 198% during the month from $5.71 to $16.99. Several factors coincided with these sharp increases.
The altcoin spiked 30% in 24 hours slightly before mid-month, rallying as traders anticipated an April 15 airdrop that provided EOS holders with eosDAC tokens. When this airdrop took place, every wallet that held at least 100 units of EOS obtained an equal number of eosDAC.
Later that month, market experts cited bullish market sentiment and widespread confidence in Dan Larimer, who is leading the development of EOS, as helping fuel the currency’s gains.
Cardano, the native digital currency of a smart contract platform that offers enhanced security through a layered architecture, appreciated close to 120% in April, rising from $0.1495 to $0.3256. During the month, Cardano, which trades under the ticker symbol ADA, rose to as much as $0.3885, representing a roughly 160% gain from April 1.
A promising memorandum of understanding has been signed between Cardano and the Ethiopian Ministry of Science and Technology. Per the agreement, the Cardano platform will be utilized in the Ethiopian Agritech industry.
Bitcoin Cash, another highly visible altcoin, also enjoyed notable upside last month, climbing 84% from $694.54 to $1,278.45. The cryptocurrency has been pushing higher ahead of its May 15 hard fork, which will deliver several upgrades including a 32MB block size.
Bitcoin Cash split off from Bitcoin on August 1, 2017, at the time, the newly created digital currency offered one major benefit - an 8MB block size, larger than the more traditional Bitcoin’s 1MB blocks.
Bitcoin, the world’s largest cryptocurrency by market value, had a relatively modest month, at least compared to many other cryptocurrencies and the market as a whole. Bitcoin prices increased 29% in April, less than half the gain experienced by the broader MVDA.
After starting out the month at $6,942.58, Bitcoin traded within a modest range for about a week and a half, until it began a notable, upward trend on April 11. Between then and April 24, the digital currency rose to $9,695.15, at which point it was up nearly 40% for the month. Bitcoin then eased somewhat, finishing April at $8,958.94.
Going forward, analysts offered a reasonably bullish outlook for cryptocurrencies.
“The market upswing will continue so long as headline risk is minimized,” predicted Song. However, he emphasized that negative news could easily motivate traders to take profits, which would in turn create “substantial downward price pressure.”
While Koyen predicted that digital currencies will experience sustained momentum as long as positive sentiment is unhindered by bad news, he also anticipated significantly volatility in the near future.
Over the coming weeks and months, the big-name cryptos will experience fluctuations, said Koyen, adding that in some cases, these price movements will be dramatic. However, this volatility won’t just be limited to the blue-chip digital currencies, he stated.
“We’ll also see breakouts among the altcoins as once-nervous money returns to crypto and goes bargain shopping,” said Koyen. “Keep an eye on the low and micro-cap coins for huge swings.”