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 July 17.
After a bearish rejection, bitcoin price started a downward move below $9,200 and $9,150. BTC even broke $9,050, but it remained stable above $9,000. The price is currently recovering towards $9,150. The first major resistance is near $9,200, above which the price might retest $9,300. If there is no recovery above the $9,200 resistance, bitcoin might resume its decline. The main support is near $9,000, below which it could dive towards $8,800 or even $8,650.
Ethereum price gained bearish momentum below the $235 support. ETH even tested the $230 support and it is correcting higher. The previous support near $235 and $236 might act as a hurdle for the bulls in the next 2-3 sessions. A clear break above $236 might push the price towards $240 and $242. If not, the price might dive further below the $230 support.
Bitcoin cash price broke $222 and $220 levels. BCH traded close to $215 and it is correcting higher above $220. On the upside, $228 might act as a strong barrier for a strong recovery. If the price fails to recover above $228, it could resume its decline towards $215 and $205.
ADA failed to stay above the $0.130 support and declined below $0.125. The price is declining and it might continue to move down towards $0.120. Any further losses may perhaps call for a larger correction towards $0.112 or $0.108.
XRP price extended its decline below the $0.192 support. It even broke the $0.190 support, but recovered in the past few hours. The price is currently trading above $0.192, but it might struggle to gain bullish momentum above $0.195. On the downside, the price might accelerate losses if there is a close below $0.190.
In the past three sessions, a few altcoins rallied over 10%, including AMPL, AOA, ALGO, LEND, SNX, ENJ, HOT, XLM, and BAT. Out of these, AMPL surged 41% and it broke $2.400.
Fiat Failures, Inflation May Fuel ‘Fear-Driven’ Bitcoin Rally
Jarosław Adamowski (Cryptonews.com) writes that fiat failures and widespread inflation stemming from skyrocketing public debt could pave the way for bitcoin to enter the mainstream in the next one to two years, according to prominent crypto industry players.
“Nic Carter, co-founder of crypto market analysis firm Coin Metrics, stated that “a wave of sovereign currency failures, similar to the Asian financial crisis of the late 1990s, and similar to the post-Soviet Union [period] where sovereign currencies failed” was on the cards.
Crypto, he hinted, would be waiting with open arms if people did abandon their fiat currencies in favor of an alternative.
Carter said, “It’s regional. It’s contagious. We begin to see some distress in lots of sovereign currencies. There’s a lot of debt, the world is very indebted in regional markets, and unfortunately, I think it’s going to … [impact] tens or hundreds of millions of people. And for some of those people, they will be able to use crypto financial rails to exit their sovereign local currency.”
Others concurred. Tuur Demeester, an economist and the founder of bitcoin alpha hedge fund Adamant Capital, stressed the disruptive potential of high levels of inflation set to follow, with governments’ responses to the coronavirus pandemic generally involving massive public spending drives.
”Inflation is the big theme for the next 12 to 24 months. The reason why is that the narrative is changing … In 2008, the question was: should we even have these bailouts? Right now, that’s off the table. It’s only about how much, and how fast,” Demeester claimed.
And Demeester even hinted that cataclysmic change unseen for centuries could be in store. He said that it scares him as this is “exactly what happened in the late 1780s in France when they ended up with hyperinflation and the French Revolution.”
”2017 – was a greed-driven rally in bitcoin. 2020 and 2021, I think, is going to be driven by fear. And that is very very explosive. Just like we saw people standing in line to by toilet paper and beef, I think they’re going to stand in line to buy bitcoin and gold. So, the time to get insurance is before your house is on fire,” Demeester said, stressing that “the house is still not on fire.”
Robert Breedlove, the founder and CEO of Parallax Digital, said he thought that, with the shaky macroeconomic situation looking beneficial to cryptocurrencies, bitcoin’s rise toward the $100,000 mark could be inevitable, coinciding with a surge in popularity.
He stated, “I know it sounds radical today, but, as we know, bitcoin does move geometrically quickly. I think when it breaks the $100,000 [ceiling], the world’s really going to have a sharp wake-up call. 2017 was kind of a warm-up for what’s about to come. If that’s in 12, 24, 36 months, five years – who knows? But the pressure is […] at an all-time high.”
Traders wait for a bitcoin breakout but they aren’t sure when that will happen
Daniel Cawray (Coindesk.com) writes that traders are optimistic that bitcoin’s weak market, with low volumes and low volatility, can quickly change, reporting some experts’ comments.
“Price movement outside of the low $9,000s territory is key, said Rupert Douglas, head of business development and institutional sales at London brokerage Koine. “This tussle between bulls and bears from $9,000 to $9,500 is a slow grind at the moment. A close outside these boundaries will likely see a sharp move either way.”
It will take more exciting news than a Twitter hack attempting to scam social media users out of bitcoin to bring the world’s oldest cryptocurrency out of stagnation, said Jean-Baptiste Pavageau, a partner at Paris-based quantitative trading firm ExoAlpha.
“The fact that bitcoin didn’t move because of the Twitter scam shows the importance of $9,100-$9,200 range to either consolidate the trend and move higher or invalidate the level and fall toward $8,200,” said Pavageau.
In a sleepy bitcoin sector, several analysts pointed to the crypto derivatives market as a sign the industry is still growing. “In general, the markets have come a long way and I am particularly excited about some of the new derivatives platforms that have emerged.” Mick Sherman, founder of New York-based Trading Firm Altcoin Advisors.
In particular, CME, Binance and ByBit have seen growth in open interest.
In addition, U.S. dollar-denominated open interest on Seychelles-based derivatives exchange BitMEX is around $700 million, a high not seen since the excitement surrounding May 12’s bitcoin halving, a scheduled reduction in the cryptocurrency’s new supply output that happens roughly every four years.
“We still see a lot of interest and building momentum for derivatives and expect this to continue for some time, particularly as traditional managers seem less interested in holding the underlying but still want exposure to price movement,” said Douglas Bilyk, business development director at crypto brokerage Copper.
Derivatives might be a factor, but cryptocurrencies other than bitcoin could weigh on the market as well, Bilyk added. “We’re expecting a large bitcoin move but direction is unclear. One ‘canary in the coal mine’ might be the bullish moves in some of the blockchain development tokens these past few weeks.”
This week, the Ethereum network experienced the most transactions in over two and a half years. On Monday, total transactions reached 1,151,834, the first time it has been that high since Jan. 18, 2018, according to data from aggregator Etherscan.
With decentralized exchanges now around $60 million in volume per day, tokens on the Ethereum network, often referred to as altcoins, are giving traders new ideas to profit within the cryptocurrency ecosystem. “I don’t see bitcoin as a clear trading opportunity right now, however there are some opportunities with altcoins that have performed really well lately.” said Alessandro Andreotti, an Italy-based bitcoin over-the-counter trader.”