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 24.

Bitcoin price started a minor downside correction. However, BTC remained stable above $9,300 and recently started a fresh increase. It surpassed the 9,400 and 9,500 resistance levels to move further into a positive zone. The price traded a few points above 9,550 and it is consolidating near 9,500. If there is a downside correction, the 9,400 support zone could provide support. On the upside, the price might accelerate towards 9,800 if it settles above 9,550.​

Ethereum price broke the $250 and $260 resistance levels. ETH is up over +8.0% and it even tested 270. The price is correcting lower, but it might find support near 260 or 254. On the upside, a close above 270 could open the doors for another rally. The next target for the bulls may be 280 or 285.​

Bitcoin cash price gained around +4.0% and it cleared the $230 resistance. BCH is now trading above 235 and it seems like it might soon attempt to clear the 240 resistance zone. Any further gains could lead the price towards 250. On the downside, the main supports are near 232 and 230.

ADA formed a decent support near $0.120 and recently climbed higher. It broke 0.122 and 0.124. A successful close above 0.125 is needed for more gains. The next crucial resistance on the upside is seen near 0.130.

XRP price finally managed to clear the $0.200 resistance zone after ETH’s rally. The price even cleared the 0.202 resistance and tested 0.205. The price is consolidating gains and it seems like the bulls might aim more upsides above 0.205. Conversely, a close below 0.200 might negate the current bullish view.​

In the past three sessions, many altcoins gained over +5.0%, including DGB, RSR, LINK, BAND, LUNA, MKR, ABBC, ZIL, MIOTA, XVG, QNT, and THETA. Conversely, AMPL dived -28.0% and RLC is gaining bearish momentum.

Will Fiat Be a Passing Fad In the History of Money?

Linas Kmieliauskas (Cryptonews.com) reports a comment by Jim Reid, Research Strategist at Deutsche Bank, according to whom fiat money will be a passing fad in the long-term history of money, while gold, as a hedge against government money, is outperformed by equities in the long run.

In a note to clients, Reid stated that even as he’s ‘a gold bug’ due to the bleak future of fiat money “in my long-term work I’ve always found many commodities difficult to recommend on a buy and hold basis as most underperform inflation over the long run.”

“Indeed, between 1860 and 1971 (when we moved from a gold-based system to fiat money) the real price of Gold fell by 75% and over 80% for Oil and Silver. Since then, Oil and Silver have only doubled in real terms and are still less than half their 1860 values, but Gold is up 7 times, double its 1860s real level. For context, however, the S&P 500 is up 22 times in real total return terms (including dividends) since 1971 and 40,000 times since 1860,” Reid wrote.

He concluded that while gold is definitely a fiat money hedge, on a total return basis equities have tended to do much better in the long run.

Reid did not comment on the role of Bitcoin (BTC) in the long-term history of money. However, in December last year, Deutsche Bank Research said that the forces that hold the fiat money system together look fragile and, over the next decade, some of these forces could begin to unravel and demand for alternative currencies, from gold to crypto, could take off.

According to the researchers, it is possible that inflation will become more and more embedded in our system and doubts will rise about the sustainability of fiat money.”

Three Reasons Bitcoin Could Soon Rise to $10K

Omkar Godbole (Coindesk.com) suggests three reasons why Bitcoin could soon rise to $10K, after the most famous crypto in the world jumped above $9,500 on July 23, ending a four-week-long low-volatility squeeze.

“Now the cryptocurrency looks set to climb toward the psychological hurdle of $10,000, as suggested by three factors.

1. Volatility returns – Bitcoin’s high of $9,551 on Wednesday was its highest level since June 24, according to CoinDesk’s Bitcoin Price Index. The gain has confirmed a Bollinger band breakout on the daily chart and opened the doors for a move of $400 or more on the higher side, as noted by Adrian Zdunczyk, CEO of trading community The BIRB Nest in a blog post.

Bollinger bands are volatility indicators placed two standard deviations above and below the 20-day moving average. They had recently narrowed to levels last seen in November 2018 as the cryptocurrency traded in the very restricted range of $9,000–$9,400. A big move often follows a period of very low volatility.

2. Institutional interest rising – Open interest or open positions in bitcoin futures listed on the Chicago Mercantile Exchange (CME) – considered synonymous with institutional interest – jumped 15% to a one-month high of $452 million on Wednesday. The metric has risen by 24% over the past three days alongside bitcoin’s uptick from $9,120 to $9,550, according to data source Skew.
Global open interest (as gauged by data from 12 major crypto derivatives exchanges) has risen above $4 billion for the first time since early March. A price rally is said to have legs if it is accompanied by an uptick in open interest.

3. ‘Risk-on’ markets – The “risk-on” mood in the traditional markets further supports stronger gains for the leading cryptocurrency. Global stock markets are trading at five-month highs while the U.S. dollar, a safe haven in times of crisis, is languishing near March lows, according to Investing.com. The EU’s fiscal stimulus deal and market expectations of an additional U.S. coronavirus stimulus package are pushing stocks higher. Bitcoin has recently developed a stronger positive correlation with the equity markets. It’s worth noting that escalating China-U.S. tensions pose a risk to the equity market rally and possibly bitcoin prices.”

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