In the Bitcoin sector: we reached the price area around $10k. Despite slight dips to the $9000 range, the price remained stable. On the other hand, high volatility was witnessed in the Altcoins sector over the past week. As we have reported in previous market updates, the market seems to be affected by Bitcoin’s trading against the dollar. Two altcoins took over the spotlight this past week: Digix (DGD), which raised 75%, and NEO, which remains stable since the beginning of the year, and rose by a few percentages this week.
After the sharp correction at the beginning of February, since then this month has been a positive once and it seems that the market will continue to recover. More and more banks and regulators are stating their say about crypto. Regulators’ positions in influential countries may have a decisive impact on the crypto markets.
In these past few weeks, it was impossible to avoid market volatility and many day traders were hurt because of that. As can be seen in the short term chart, it is difficult to understand the direction of the market. Hopefully, in the near future, we can determine whether the downward trend is over.
News of the week
- In an interview with the Wall Street Journal, John Rayne, Chief Financial Officer of PayPal, said “Bitcoin is likely to become a popular payment method. However, at this stage, it may not be appropriate as a method of payment for businesses, given it’s volatility.”
- The payment company, Circle, acquired the Poloniex crypto-exchange. Reports by Fortune claim that Circle paid about $400 million for it.
- Craig Wright, who impersonated Satoshi Nakamoto, the inventor of Bitcoin, had a $10 billion lawsuit filed against him.
- Coinbase’s wallet and the GDAX exchange now support Segwit.
- In its annual 10K report, Bank of America, expressed concerns of the bank’s profitability with businesses who deal in crypto currencies.
News from around the globe
Canada – Toronto-Dominion Bank, one of the largest banks in North America, has announced that it will not allow the purchase of crypto by credit card.
Uzbekistan – President Shavkat Miriyoyev has instructed the relevant authorities (including the central bank and the Ministry of Finance) to draft a law to regulate the legality of crypto in the country. The bill is expected to be published in September.
Europe- After a meeting about digital currencies this week, the European Commission stated its position on a number of issues. A few points it mentioned:
- Europe should adopt the use of Blockchain due to it’s technological potential.
- The speculative value of crypto currencies puts investors at risk.
- ICOs offer financial potential, but lack transparency in the field which creates more risks for investors.
Israel – The Israeli Supreme Court ordered Bank Leumi to allow its customers to trade in Bitcoin through their bank account. They also issued a temporary order prohibiting the bank from pausing the bank account activity of the Israeli crypto trade company, Bits of Gold.
Venezuela – Following the Venezuelan government’s issue of a national crypto currency, it appears that Turkey and Iran also plan on creating their own ICOs.
It’s been a relatively stable week. The price sank slightly to the $9K area but quickly returned back to the $10K price area. In this range, resistance is around $11K. Bitcoin is now testing the descending line (marked in red). Another thing we noticed: The graph holds well above the MA-200 (moving average) levels. Last time the price dropped below the MA-200, was in 2015 when the BTC price was traded around $250.
Against the dollar – the ETH graph looks stable. Trading around $870 with support around $800 and resistance around $900. From there, we can return back to $1K level.
Against Bitcoin, the week was very volatile. After rising to 0.089BTC zones during the week, the price declined to 0.081 BTC. Resistance lies at 0.09 BTC levels and support is built around 0.08 BTC. But…will it hold?
Against the dollar, the trend is positive since the beginning of February. The graph shows that Fibonacci levels were breached and it is now traded around $20, with resistance at these levels and support being built around $18-16.
Against Bitcoin – since mid-December, the trading volume was in downward trend and continues to sink. Resistance lies around 0.0019 BTC with support at levels of 0.0016 BTC (in these ranges).
Against the dollar – resistance recently broke around $130. Next resistance lies at price levels of $144. Looks positive.
Against Bitcoin – since the resistance broke in early January, there has been considerable volatility in it’s price, which is trying to break through current resistance. Traded around 0.013BTC with support at 0.012BTC and resistance at around 0.014BTC.
Small cap – Smartcash
Meet the small cap, SMARTCASH coin. This relatively young altcoin (only traded for 7 months), has been on a downward trend since reaching its all-time high. Yet, what caught our attention is that the daily trading volume is high relatively to the market value of the coin, which is small relative to the crypto market, and at the moment, it is traded in smaller and less familiar exchanges. The analysis of the graph shows, once the SMA20 (marked in blue) line crosses the SMA50 (marked in purple) line, it might be a very positive sign. Against Bitcoin, its traded around 0.00002BTC. Equivalent to $0.22 as of now.
After the upsurge which brought about by the planned fork, we witnessed sharp declines during the past days. Our Smartcash example illustrates how important it is to start trading at a specific point in the trading cycle and how crucial it is to keep in mind the different types of fragmentation and risk-management involved when trading crypto.