We report the traditional weekly crypto market analysis based on the contribution by Aayush Jindal (Cryptonews.com). The analysis was made on April 17.
After a sharp rise, bitcoin price faced a strong selling interest near the $7,200 resistance. BTCUSD corrected lower below 7,100 and it is now consolidating gains above 7,000.
On the downside: the bulls are likely to protect the 6,850 support area (the recent breakout zone).
On the upside: the main resistance for further upsides is near 7,200. A successful close above 7,200 could lead the price towards 7,550 and 7,650.
Ethereum price surged above the $165 and $170 resistance levels. ETHUSD tested the main 175 weekly resistance and it is currently correcting lower.
On the downside: It is testing the 170 support, below which the price might correct lower towards 165. The main support is now near 162.
On the upside: the bulls must surpass the 175 resistance area for upside continuation. The next key resistance above 175 is near 180 and 182.
Bitcoin cash price broke the $230 level and tested the $240 resistance, where the bears took a stand. BCHUSD is correcting lower and trading near 230. If the price continues to move down, it might test the 220 support region. Conversely, it could revisit the 240 resistance area.
Litecoin traded close to the $44.0 level and it is consolidating gains above the $42.0 level. The first support is near 41.2, below which LTCUSD could retest the 40.5 support. On the upside, there are many resistances, starting with 42.5 and up to 45.5.
XRP price made another attempt to settle above the $0.190 and $0.192 resistance levels, but it failed. As a result, the price is correcting lower and it is trading near 0.188 pivot level. If there are more downsides, the price might test 0.182 in the coming sessions.
In the past few hours, many small-capitalization altcoins gained more than +5.0%, including DGB, CHZ, KMD, HYN, XVG, LUNA, DBTX, HEDG, XTZ, NRG, REN and LINK. Out of these, DGB rallied more than 22% and CHZ is up close to +20.0%.
Bearish bets on Bitcoin rise, as May halving nears
Fredrik Vold (Cryptonews.com) writes that more and more traders are placing bearish bets on the Bitcoin price, ahead of the long-awaited halving, signaling some doubts as to how enthusiastically the event will really be received by the market.
“The bets, known in trader circles as put options, have risen steadily relative to the opposite bet, call options, since March 23, data from the crypto derivatives analytics provider Skew shows”, Vold reports.
“Options are financial derivatives that provide the holder with the right but not the obligation to buy or sell an asset at a specific price on a predetermined date. As such, options enable speculators to bet on a price rise or decline of an underlying asset using leverage. A call option gives the investors the right to buy an asset and a put option gives the right to sell it.
Also, the data shows that trading volumes in the options market have been on the rise, a sign that is usually considered to add support to existing price trends in the market.
Looking at total open interest for bitcoin options, however, it seems that the higher interest in put options is not reflected in a generally higher interest in options trading. On the contrary, the trend in total open interest is pointing lower after seeing a peak on March 26.
Also, as we have gotten used to seeing in the bitcoin options market, the overwhelming majority of the interest stems from retail-focused exchanges, with the more institutionally oriented marketplaces CME and Bakkt only accounting for a tiny share of total open interest.
With a current bitcoin price of about $6,840, it’s also interesting to note that t he options market does not appear overly optimistic about bitcoin’s prospects following the halving. Again according to Skew’s data, bets placed in the options market currently show a probability of 34% that bitcoin will reach a price of $7,000 or higher by December this year. In fact, the bets suggest that there is a 50% chance that bitcoin will drop to $5,000 or below by year-end.
Although the general sentiment in crypto community has been largely bullish towards the upcoming halving in the bitcoin mining rewards, the data shows that traders cannot take anything for granted in the bitcoin market”, he concludes.
U.S. dollar-backed blockchain tokens get more and more popular
Nikhilesh De (Coindesk.com) writes that “four months after Circle pivoted to stablecoins, the startup’s new business model has received an unexpected boost from the global coronavirus crisis, said co-founder and CEO Jeremy Allaire.
U.S. dollar-backed blockchain tokens are surging in popularity around the world, and this time much of the demand is for payments in normal business transactions, not just to move money quickly between cryptocurrency exchanges, Allaire claimed.
“Over the past several weeks, we have seen explosive interest and growth in USDC,” he said, referring to the stablecoin Circle issues in partnership with Coinbase. “There is clearly very significant global demand for digital dollars, and the use of digital dollars as a new payment medium.”
New signups have come from e-commerce marketplaces, advertising networks, luxury goods producers, recruiting platforms, digital content markets, peer-to-peer lending platforms, payment companies, software firms, professional services firms, rewards businesses, mobile banking providers and other internet companies, Allaire said.
“We are getting feedback from Asian market participants that there is more and more demand for USDC from SMEs seeking both the safety and utility of digital dollars,” he said, using a term for small and medium-sized enterprises.
The company saw the number of Circle Business Accounts, introduced last month for corporate clients to conduct business using USDC, grow +700.0% over the past few weeks, with more than two-thirds of these businesses coming from outside the crypto space.
According to CoinMetrics, USDC’s market capitalization, which equals the amount in circulation since it trades at par for dollars, has jumped +65.0%, on March 1 to $734 million at press time.
Allaire’s explanation for the surge suggests that the crisis is accelerating mainstream adoption of blockchain technology, albeit a relatively tame variant. As a stablecoin, USDC is designed to hold its value against the dollar, not gyrate in price like bitcoin. It’s backed by real-world dollars held in a bank, for which it can be redeemed on demand.
“We believe we are seeing a real turning point in the adoption of digital currency,” Allaire said.
This much is clear: dollars, digital or otherwise, have been in hot demand over the past several weeks as the pandemic has prompted investors to flock to safe havens.
“We’re seeing record amounts of transaction volume,” Allaire said, adding that adoption “is relatively evenly distributed across Western and Asian markets.”
According to CoinMetrics, over the past six weeks, the Paxos Standard grew by+22.0% to $258 million; tether by +36.0% to $6.3 billion and the Gemini dollar to $6.2 million, by +6.0%. The Binance dollar issued with Paxos saw the fastest growth, to nearly $200 million, or up a whopping +194.0%.
Stablecoins issued on the Ethereum blockchain are seeing enough of a boost that value transfer on the network is equal to the values on the Bitcoin network. This apparent boom in dollar substitutes comes as Libra, the consortium set up last year by Facebook, has walked back its plan to create a global digital currency, refocusing on stablecoins tied to individual national currencies.
The concept of a digital dollar has been gaining traction elsewhere. On Thursday, a group of U.S. lawmakers introduced a bill proposing a digital dollar (though not a blockchain-based one) as a tool for distributing stimulus payments to U.S. residents. This is at least the fourth bill introduced to Congress suggesting a digital dollar, and was co-sponsored by nearly a dozen representatives.”