We report the traditional weekly crypto market analysis based on the contribution by Aayush Jindal (Cryptonews.com). The analysis was made on May 8.
There was a strong increase in bitcoin price above the $9,500 resistance. It gained more than +6.0% and broke the 9,800 and 10,000 resistance levels. It topped near 10,080 and recently started a downside correction. The price is trading below 10,000 and it is approaching 9,800.
On the downside: the main supports are near 9,550 and 9,500.
On the upside: a successful close above 10,000 might open the doors for another leg higher towards 10,500 and 10,800.
Ethereum price spiked above the $212 resistance level, but it failed to gain bullish momentum. ETH is trading near 210 and it might continue to move down.
On the downside: the first support is near 208, below which the price might to revisit the 202 and 200 support levels.
On the upside: a successful close above 212 and a follow-through above 215 are needed for a strong upward move.
Bitcoin cash price is rising and trading above the $250 resistance. If BCH/USD continues to rise, it could test the 265 resistance level. The next key resistance is near 275. If the price fails to stay above 250, it could correct lower towards 240 or 235.
Litecoin remained well bid above the $45.0 resistance and it is now trading above 46.2. An initial resistance is near 47.5, followed by the key 48.5 resistance. Any further gains could lead LTC towards 50.0. On the downside, a break below 45.0 might call for a push to 42.5.
XRP price failed to continue higher above $0.220 and it started a fresh correction wave. It is trading below 0.218 and it might continue to move down towards 0.212 and 0.210. On the upside, a close above 0.220 and 0.222 is needed for a steady rise to 0.235.
In the past three sessions, many smaller altcoins gained more than +6.0%, including CRPT, ZRX, ABBC, LEND, KMD, MAID, RCN, XMR, OMG, ICX, HOT, DATA, NEO, THETA, and VET.
Bullish signs are observable ahead of Bitcoin halving
Cryptonews.com reports the feeling of bitcoiners ahead of the important halving, expected to happen on May 11-12. “There’s some bullish news from the mining industry ahead of Bitcoin halving. Miners are hoarding BTC, expecting higher prices and buying rigs in the thousands, while the recent rally has made older rigs profitable once more, thus pulling many miners away from the exit door.
The miners have sold less than they’ve mined and have hoarded BTC 1,067 ($10.5 million) in the past week, according to crypto-asset data provider ByteTree. This would usually suggest a soft bid in the market and would, therefore, be seen as bearish. However, says the firm, given the recent price surge, “clearly this hasn’t been the case, and so we can only assume, that the miners also think higher prices are coming post-halving.”
The price jump wasn’t the only positive development for the miners, as weekly network fees surpassed $4 million, and mining difficulty increased less than 1% this week.
As conditions improved, even older generation mining machines, such as Bitmain’s Antminer S9, are back in the game. The Antminer S9 reached its peak in April 2018 with 80% network hash rate, or the computational power of the network, attributed to it, but that it was presumed to be leaving the space now, with reportedly many of them lying around unused, as well as the S9 series share of hash rate declining to c. 23%, according to crypto mining publication Miner Update.
Meanwhile, as the mining reward halving is just a few days away, miners are also investing in more efficient machines.
Following the recent purchase of 1,000 S19 Pro (110 TH) miners, Riot Blockchain, a Nasdaq-listed public crypto mining company, has announced that they bought additional 1,040 next-generation Bitmain S19 (95 TH) Antminers to the tune of $1.9 million. They expect that they’ll receive and deploy the 2,040 new S19 miners in the third quarter of 2020. Their aggregate operating hash rate is estimated to increase over 80% to approximately 457 PH/s.
Crypto mining company Argo also recently installed 1,000 Bitmain Antminer S17+ machines, bringing the total mining capacity to c. 18,000 machines and 730 Petahash, which is a +244% increase in hashpower from the end of 2019. Argo saw a monthly decline in production in April due to difficult mining conditions, but the company mined 319.2 bitcoin or bitcoin equivalent in April, resulting in the total amount of BTC 1,237 mined in the first four months of 2020 – a record level for the group and a +122% increase over the previous four months.
Though miner’s capital reserves were wiped out in the March crash, and the mining reward halving could mean the end to many miners, halving-related investor optimism has pushed BTC back above the psychologically-relevant $10,000 level, which is a +150% increase over the 2020 low, said Henry Elder, Director of Investment Strategies at financial services provider Wave Financial Group. This is probably a “buy the hype, sell the news” situation, given that halvings are usually followed by a price correction before a bull run, he added.
The likelihood of a correction “is amplified by the general sense of uncertainty pervading all markets at the moment,” but the longer-term bull case “is also amplified by current market dynamics, as laid out by respected investor Paul Tudor Jones this week when announcing his intention to add the asset to his flagship fund,” Elder stressed.
Meanwhile, should the post-halving correction happen, the second half of May would be even more challenging for Bitcoin miners, especially less efficient ones. As Bitcoin hashrate increased by almost +30% since the end of March and is now approaching an all-time high, reached in early March, mining difficulty is now estimated to increase by +2.35%, almost reaching an all-time high in nine days. However, after the halving, hashrate is estimated to drop, which, if the drop is big enough, would make Bitcoin mining less difficult in around 6 days after the halving.
BTC has appreciated +4.0% in a day and +10.0% in a week. The price is up by +35.0% in a month and +62.0% in a year.
Investors bet on a possible Bitcoin Cash bullish breakout
In the last 24 hours, Bitcoin Cash rebounded after bears sank the crypto to a $240 low. Incidentally, this was the low BCH rebounded from to reach the 280 high, Coinidol.com reports.
“The upward move becomes impossible because the crypto reached the overbought region. Besides, sellers emerged to push BCH downward. As price drops to the previous low, three resistance levels were created during the downward correction.
The resistance at $280 resulted in the coin falling to the low of $250 support. As price corrected upward it was resisted at $267. This caused the market to fall to $240 low. A further upward move has been resisted at the $250 resistance. The bulls failed to break $250 resistance level after the rebound. Certainly, it is possible for BCH to rise. A strong rebound will break through the resistance levels of $250, $267 and $280.
As the coin rebounded, the daily stochastic bands were making a U-turn indicating an upward move. The indicator is currently above the 40% range of the daily stochastic. It implies that BCH has bullish momentum.
The key resistances are $440, $480, $520, while the key support zones are $200, $160, $120.
BCH’s initial rebound failed to break through the $250 resistance. The bulls are struggling to push the price above resistance. Nonetheless, if the bulls jumped over the first hurdle, the crypto is likely to battle the resistance at $267 and $280.”