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 June 5.
In the past two sessions, bitcoin price mostly traded in a range above the $9,550 support zone.
On the upside: the first major resistance is near 9,850. If there are more gains, the price is likely to clear the 9,950 and 10,000 resistance levels.
On the downside: the price might start a fresh decline below the 9,650 support. The main support is now near 9,550, below which the price might dive towards the 9,300 support in the near term.
Ethereum price is trading in a range between the $240 support and the $245 resistance.
On the upside: if ETH surpasses the 245 resistance, it could increase the chances of more upsides above 250 and 252.
On the downside: the price could break the 240 support and start a fresh decline. An initial support is near 235, but the bears are likely to aim for a larger decline towards 230.
Bitcoin cash price is trading above the $250 and $255 levels. At the moment, BCH is trading near 260 and facing a short-term resistance near 262. The main resistance is near 265, above which it could continue to rise towards 270 and 278.
Litecoin is facing an uphill task near the $48.5 and $50.0 resistance levels. A successful daily close above 50.0 is needed for the bulls to gain strength. If the price fails to rise above 48.5, there could be a steady decline towards the 42.2 support zone.
XRP price made an attempt to clear the $0.208 resistance, but it failed. The price is trading near 0.205 and it must climb above 0.208 and 0.210 to move into a positive zone. If not, it could decline below the key 0.200 support.
In the past three sessions, many small altcoins jumped more than +5.0%, including WAXP, DIVI, REN, QNT, KMD, HIVE, HT, SNX, LSK, SOLVE, and BTT. Out of these, WAXP rallied nearly +55.0% and broke the $0.0700 resistance zone to move into the top 75 cryptoassets by the market capitalization.
The End of USD Dominance (Without the Digital Dollar)
Tim Alper (Cryptonews.com) writes that there is a group of people in the United States which is pushing for the adoption of a digital dollar. According to these experts, the failure to launch a central bank digital currency (CBDC) could cost the country and could see the dollar lose its status as the world’s reserve currency.
In its first white paper, this group, called Digital Dollar Project wrote: “If the USD is to remain the world’s primary reserve currency in the unfolding century, it cannot remain an analog instrument and unit of account for things increasingly denominated as digital tokens. It must itself become a digital tokenized currency that measures, supports and transacts with the world’s digital tokenized things of value.”
The white paper includes a number of reasons why the group thinks that there is a need for the Federal Reserve to launch a CBDC, and seeks to outline ways in which the USA might seek to launch a digital dollar.
A growing number of American financial experts and politicians have urged the Fed to act fast, or watch projects like China’s digital yuan – already being used in advanced multi-city pilots – potentially chip away at dollar dominance.
Indeed, a number of reports have claimed that Beijing’s apparent desire to fast-track the digital yuan – known in China as the DCEP – is part of a wider plan to chip away at the greenback’s control of worldwide financial markets.
The white paper’s authors warned, “If payment systems could bypass Western banks heavily linked economically and geopolitically to USD reserves, the effectiveness of economic sanctions as a central and unifying tool of our foreign policy would be at serious risk. It would mean United States global leadership, particularly in the exercise of soft power, would be at risk as well.”
The group enthused about the potential of an American CBDC, writing,“[The project] could offer broader access to USD, reduced operational complexities, improved cost efficiencies, greater market transparency, reduced counterparty risk and increased trade liquidity.”
It also claimed that a digital fiat would speed up trade deals and “allow money to flow more efficiently through domestic and global economies.”
Crypto Derivative Volumes Hit Record $602B in May
Paddy Baker (Coindesk.com) reports very recent data on the crypto derivative volumes, writing that “a flurry of crypto options activity ahead of Bitcoin’s halving contributed to derivative volumes hitting a new all-time high in May.
In a new report Thursday, London-based data aggregator CryptoCompare found crypto derivative volumes increased 32% to $602 billion. That’s a new all-time high, squeaking past the previous record of $600 billion set in March.
Most of the heavy-lifting came from Huobi, OKEx and Binance. The three exchanges made up 80% of May’s derivative activity. Huobi was the largest, with $176 billion in volume, up 29% from April. OKEx and Binance came in with $156 billion and $139 billion, respectively.
But CryptoCompare also found there was a notable increase in trading activity around crypto options, contracts giving the owner the right to buy or sell the underlying at a specified date and price.
Volume on options exchange Deribit more than doubled to $3.06 billion in May. On the 10th of that month, the day before the Bitcoin halving event, $196 million worth of trades passed through Deribit, making it the single-biggest day in the platform’s four-year history.
Similarly, institutional exchange CME, which only released its own crypto options earlier this year, reported a 16-fold increase in monthly activity compared to April. Like Deribit, there was a significant uptick in trading activity in and around the Bitcoin halving event.
CryptoCompare founder and CEO Charles Hayter said the surge in crypto options trading suggested a “more sophisticated, diverse class of investor” is getting involved during a period when not only was there a halving event, but also “unprecedented financial measures” taking place around the world following the coronavirus outbreak.
CryptoCompare also found that crypto derivatives gained market share in May. While spot volumes continue to make up the lion’s share, representing roughly 68% of total trading activity, crypto derivatives saw their share increase to 32% in May from 27% in April”, the article concludes.