Weekly market analysis of cryptocurrencies
We report the traditional weekly crypto market analysis based on the contribution by Aayush Jindal (Cryptonews.com). The analysis was made on Friday, April 10.
After a minor downside correction, bitcoin price found support above the $7,120 level. BTCUSD is rising and trading above 7,250.
On the upside: If BTCUSD extends its rise, it could make another attempt to clear the 7,400 resistance area. The main hurdle for buyers is still near 7,550, above which the price could rally.
On the downside: an initial support is near 7,120, below which the price may perhaps struggle to stay above the 7,000 support area in the near term.
Ethereum price remained well bid above the $162 support level and it recently recovered higher. ETHUSD is trading above 170 and it is facing a major resistance near 175.
On the upside: a successful break above 175 might lead the price towards 180 and 188.
On the downside: 162 level is likely to provide a strong support. Any further losses is likely to push the price lower towards 155.
Bitcoin cash price surged above the $265 resistance level. However, BCHUSD struggled to gain momentum above the 280 resistance and it is currently correcting lower. The previous resistance near 265 is acting as a support. Any further losses might call for a test of the 250 support level in the near term.
Litecoin is consolidating gains above the $45.0 support area. LTCUSD is still facing a major hurdle near 48.0, above which there are real chances of a sharp rise towards 52.0 and 55.0. Conversely, the price might decline to 41.2 if it breaks the 45.0 support.
XRP price is well bid above the $0.195 and $0.192 levels. On the upside, the bulls need to gain strength above the $0.202 resistance area for a solid bullish continuation in the near term. The next key resistances are near 0.205 and 0.212.
In the past three sessions, many small-capitalization altcoins gained more than +5.0%, including BTG, LINK, SEELE, BCN, ALGO, QNT, CKB, BCD, XTZ, QTUM, ZEC, REN, and BAT. Out of these, BTG rallied more than +18.0% and LINK is up close to +17.0%.
Number of Bitcoin whales hits 2-year high
Fredrik Vold (Cryptonews.com) reports that the number of Bitcoin whales, those investors who hold at least 1,000 BTC ($6.9 million) in their wallets, has reached its highest level in more than 2 years (almost 1,850), according to a new research.
Furthermore, “the number of whales active in the market during an accumulation phase has not been this high since the end of 2015, crypto market researcher Glassnode said in its weekly report. In fact, according to them, the number of these large players actually increased ahead of the market crash in mid-March, and “accelerated during and after the crash.”
In addition, the report also noted that the rise in the number of whales becomes particularly interesting when compared to the last Bitcoin mining reward halving event in July 2016, which was pretty much the exact point where the number of whales again started to decrease.
In other words, according to the report, the largest BTC holders have previously accumulated coins ahead of a halving, and sold coins after the halving has taken place.
Based on the current growth in the number of whales, Glassnode’s report concluded that “whales remain confident that now is a good time to be accumulating BTC,” and that they believe we still have “further room for growth” ahead.”
Ethereum’s big investors are doing the same, as whales are also active in the second most valuable cryptoasset. According to crypto research firm Santiment, “the 100 largest ethereum holders are once again accumulating more ETH tokens relative to the total ETH supply, suggesting that the asset is “undervalued” and “a great mid to long-term hold play.”
Cryptocurrencies: an alternative to Governments’ increase of fiat money
Leigh Cuen (Coindesk.com) writes that Governments are ready to boost their deficit spending through a new wave of fiat money this year. With positive consequences for cryptocurrencies.
“The U.S. Federal Reserve announced another $2.3 trillion in lending programs to stabilize America’s coronavirus-stricken economy. The Bank of England announced it would likely extend billions of pounds to directly finance the government’s crisis response.
All this inspires inflation concerns around the globe, which appear to be driving demand for bitcoin in some corners.
“The non-stop quantitative easing process will finally impact the mid-term and long-term market,” said Danny Deng, a leading member of both the China Blockchain Application Center and the National Internet Finance Association of China. “Bitcoin is designed for this kind of situation. So I’m optimistic about bitcoin’s future.”
China is also expected to announce a stimulus package of its own. Deng said he expects the People’s Bank of China to use a digital currency to distribute a stimulus package, which he sees as a complementary catalyst to the bitcoin mining industry.
While central banks continue printing money, there will only ever be 21 million bitcoin. The halving of bitcoin miners’ block rewards is scheduled for May in what some are calling an act of quantitative tightening.
Broadly speaking, dozens of nations are reevaluating which currencies and industries they depend on. Bitcoin fits into this broader spectrum as some nations with strong central governments, like China, shore up hard assets and digital infrastructure. Meanwhile, there has been a surge in retail crypto investors from nations with unstable currencies, such as Argentina and Russia.
“We see that interest in cryptocurrencies has grown significantly in Russia … due to the economic situation in the country,” said Gleb Kostarev, Binance’s head of operations in Russia. “The ruble has tumbled a lot in 2020. In addition, authorities are introducing a new tax on income from bank deposits from next year, which encourages people to withdraw funds from banks.”
Bitcoin is hardly the most important asset in the broader economic turndown. However, recent bitcoin trends highlight the local impact of global developments. In places where distrust of banks historically runs high, many households now consider bitcoin among the assets they trust more than the local fiat currency”, the author concludes.