Cryptos weekly market analysis
We report the traditional weekly crypto market analysis based on the contribution by Aayush Jindal (Cryptonews.com).
After a daily close below $7,800, bitcoin started a strong decline. BTCUSD tumbled, testing 4,000 and 3,950 levels. It then recovered losses above 4,500 and 5,000.
Upside: an initial resistance is near 5,500, above which it may perhaps test 6,200 resistance area.
Downside: if it fails to correct above 5,500 or 6,200, it is likely to resume its decline. An initial support is near the 4,800 level, followed by 4,400.
Ethereum declined more than -50.0%. ETHUSD tumbled below $150 and $120 support levels. It even spiked below 100 before it found support near 90.
Upside: it is currently correcting above 120 and it might soon test the 130 and 142 resistance levels.
Downside: an initial support is near 110, below which it is likely to retest the 100 support level in the near term.
Bitcoin cash dipped below the $250 and $240 support levels. BCHUSD even spiked below 150 and tested 130. It is now recovering and it is trading above 150.
On the upside, the previous supports near 185 and 200 are likely to act as hurdles for the bulls.
Litecoin fell below the $40.0 and $32.0 support levels. LTCUSD found support near 24.0 and 25.0. It is back above 30.0 and it could rise towards the 36.5 and 38.0 resistance levels. The main resistance is seen near 40.0.
XRP price settled below the $0.200 and $0.180 support levels, sparking a nasty decline. It sank below 0.150 and it even spiked below 0.120. It is correcting higher, but 0.155 and 0.162 levels are likely to act as key resistance levels for upside continuation.
In the past three sessions, almost all small-cap altcoins declined more than -50.0% and are currently recovering, including AE, MKR, IOST, BSV, NANO, ONT, MATIC, HOT, ZIL, STEEM, BNB, and QTUM.
Bitcoin or cash?
As investors are looking for safety in cash, can bitcoin become more attractive than cash? How low might bitcoin go and how long will this downturn last? What to watch for before making an investment decision in the nearest future? What can we expect from institutional investors and what are the long term perspectives for bitcoin? These are the questions that Sead Fadilpašić raised on Cryptonews.com. He asked industry players to share their insights on this. These are some answers he collected.
Despite cash is now emotionally more comfortable than bitcoin, it may not be so safe after all, said Guardian Circle CEO/Co-founder Mark Jeffrey. “The U.S. government injected $1.5 trillion into the system, and the stock market recovered slightly before dunking even lower. Think about that: the market shrugged! And the monetary base was inflated significantly, ultimately diluting all dollars everywhere. This will keep happening in larger and larger amounts,” he stressed, adding that once people see inflation hitting “then they will stampede towards gold and bitcoin.” “But bitcoin, being digital, is easier to own and manage, so I expect it will eventually win out over gold,” he said.
Johnson Xu, Chief Analyst at TokenInsight, a token data and rating agency, told that the question is not whether bitcoin is better than cash or not, because these are “two different kinds of assets for drastically different purposes, although some industry players believe bitcoin will replace cash/fiat system, it won’t be an easy task and is impossible to realise in the near term.” Bitcoin being better is also not the reason why institutional investors are investing in bitcoin, “but because they believe bitcoin might deliver a significant return in the future or for diversification purpose.” “Institutional investors have complex needs, thus it is not an easy task to uncover the specific needs of each institutional investor in order to attract them to the industry,” said the analyst.
Gary McFarlane, a cryptocurrency analyst at Interactive Investor, told that the level of institutional interest may have been overstated “given that such investors might be expected to be less flighty than individual private investors,” but that the market turmoil we are seeing suggests it’s still heavily dominated by retail. That said, a crisis can produce opportunities, therefore “the possible launch of a state digital currency in China and Facebook’s Libra would be key validators that may attract renewed institutional interest [in bitcoin].”
Tian Chuan, founder at Bitcoinese, a Chinese media organization focused on mining, derivative trading, and crypto regulation, reminds that bitcoin is still a risk asset: “So, it depends on your preference for risk.”
However, some find that Bitcoin doesn’t really have to prove anything. Dovey Wan, Co-founder of investment company Primitive Ventures, stressed that the recent bitcoin price crash is very different from what the market experienced in 2018. “It’s not triggered by a specific type of an asset, it’s NOT initiated from a market structural flaw, it’s not even about the financial market itself. The fundamental reason for the panic in front of an epidemic comes from the lack of confidence towards economic growth, future prosperity, and losing hope in most governments and distrusting politicians in power,” Wan told.
Other experts seem to agree with the idea that Bitcoin should spend less time proving itself. Crypto will tip and go mainstream once we build a product that people both want and can use, said Lou Kerner, Partner at crypto advisory firm CryptoOracle. He added that this revolution is being led by people and organizations that do not ask permission. It’s not being led by institutions. “Institutions will follow. Build great products. Everything will follow,” he said.
Crypto, still a safe haven in the Middle East
Over the last days, the corona virus outbrake tested the ability of cryptocurrencies of being a safe haven. Leigh Cuen (Coindesk.com) wrote a story about what happened in the Middle East.
“Rami Mohammad Ali, a bitcoin miner and trader based in the Palestinian area of East Jerusalem, said the sell side of the local peer-to-peer market dried up and the buy side exploded in March. So far, he’s sold a cumulative total of 30 bitcoin to 90 customers. That’s a significant increase from September 2019, when he said he sold roughly 20 bitcoin a month to 50 customers. The appeal of holding value in bitcoin, he said, is that people can access “the money any time they need it.”
This appears to be true across the region. One anonymous Syrian trader with family in Lebanon said small Lebanese business owners are struggling to pay their invoices abroad. So, among the few Lebanese with family abroad and the necessary computer skills, some now “buy [bitcoin] locally with cash and liquidate it abroad through friends and family to pay their invoices.”
In fact, some Middle Eastern bitcoin traders reported relative newbies are learning quickly and looking to buy bitcoin this week, as global prices dip.
In Tehran, an anonymous Iranian bitcoiner said people now “tend to keep their assets in gold, dollars and housing, plus a little bitcoin.” Due to the coronavirus outbreak in Iran, the economic situation has gotten progressively worse. This means fewer public bitcoin meetups and quieter trades among a population with even less faith in national institutions. Small-scale bitcoin mining is now commonplace, locals say, despite the challenges faced by industrial operations.
“Bitcoin is a revolutionary product but it needs a few more revolutions,” the Tehran-based bitcoiner said. “In the past, people thought bitcoin was a new type of scam. Now bitcoin is more trusted.”
The analytics firm Gate Trade estimated there are now more than 30 Iranian companies using bitcoin, instead of fiat, for cross-border deals. But a Gate Trade spokesperson declined to specify which companies because the greatest barrier to bitcoin adoption in the Middle East appears to be international sanctions. That challenge isn’t limited to Iran.
Yemeni bitcoin trader Mohammed Alsobhi said roughly five civilians continue to buy a small amount of bitcoin each month. The bitcoin market in Yemen is much smaller and quieter than most in the region due to the widespread censorship of telecommunication networks. But there is interest among locals knowledgeable about computer science.
“If I had the capabilities available in developed countries, I would have made great progress in this field,” Alsobhi said of selling bitcoin in his war-torn nation. “Most companies that deal globally … are excluding Yemen.”
He said he hopes people in Yemen will gain access to crypto markets for trading opportunities. But, he added, war is the biggest barrier to bitcoin adoption in his country because of sanctions. For example, due to compliance concerns, he said people in Yemen cannot download wallets via Google Play.”