Category: Market Analysis

By Jing Zhu | Crescent City Capital Market Analyst Intern

Wednesday, Bitcoin price dropped to $9,049 before coming back up to $9,850 today. The price is currently struggling to break resistance at $10,000. On the 4-hour chart, candles with long wicks indicate that Bitcoin’s recovery is slowing down. If price breaks below $9580 (the low of the doji candle made during Asian trading hours), then it would confirm a bearish lower high at $10,000, allowing for a potential drop to $9000. Technical indicators on the daily chart also show bearish signs. The RSI dipped below 50, indicating a bear market. The 5-day and 50-day MAs appear to be heading for a death cross. Furthermore, the Chaikin money flow index (measure of money flow volume) is barely positive, indicating declining strength of buying pressure.

Bitcoin Recovery May Not Last

Ripple vs. Ethereum Recovery

Right now, Ethereum is still below $230 but has increased from Wednesday’s price of $193.99. It is currently correcting above $215. Ripple is consolidating around $0.31, having risen above from yesterday’s price of $0.30 except for one swing below $0.308. In the last 24 hours, Ripple has increased 6.21%. Ripple may see resistance around $0.32- $0.33 with support near $0.28-$0.29. Ethereum’s resistance is near the $221-$231 range with support near $197-$183.

Litecoin Price Jumps 12%

At the beginning of this week, Litecoin dropped to levels below $80 before finding support at $76. On Wednesday, price recovered to $95. Yesterday, Litecoin is trading at $101, which represents about 12% gain in the market. It is likely that it will break $105. Overall, the current trend is bullish.

1. “Bitcoin Bounce Capped by $10K Price Resistance” by Okmar Godbole for Coindesk published 7/18/19

2. “Ripple vs. Ethereum: XRP and ETH Gearing Up for Much Awaited Price Recovery” by Ruti Vora for CryptoNewZ published 7/18/19

3. “Litecoin Market Overview: LTC/USD Jumps 12% Stepping Above $100” by John Isige for FXStreet published 7/18/19

By Jing Zhu | Crescent City Capital Market Analyst Intern

Just yesterday morning, Bitcoin price was around $13,200. Earlier this morning, it has dropped to a low of $11,164. Despite the price drop, the outlook remains bullish because the current price is holding up well above support at $9,615 (the higher low experienced on July 2). Bitcoin created a bearish outside day candlestick on Wednesday. This is considered to be an early sign of a potential bullish-to-bearish reversal. However, the bearish pattern is unlikely to be probable unless Bitcoin price closes below $11, 550 today. And even if it does close below $11,550, the bearish pattern will not be too much of a concern unless it dips below $9, 615.

Bitcoin Market Dominance

The current Bitcoin rally has caused dominance to spike. If it continues to increase, it could possibly grow into an “extended” 5^th wave and dominate as much as 80% of the crypto market. This could be unfortunate news for altcoins, which could potentially capitulate and “bleed out”. In general, Bitcoin is definitely more favored by investors (retail and institutional) and governments alike. It also is the most well-known and has the strongest branding, which make it the most popular coin on the crypto market. This, in additional to the rally, could also account for the significant dominance of Bitcoin.

Litecoin Price Down 14.5% 

Charlie Lee, the co-founder of Litecoin, predicts trouble in August. While many believe that the halving event may drive up the price due to the limited supply, Charlie Lee warns that price may just as likely drop. He says, “The halvening is always kind of a shock to the system. When the mining rewards get cut in half, some miners will not be profitable, and they will shut off their machine. If a big percentage does that, then blocks will slow down for some time. For Litecoin it’s three and a half days before the next change, so possibly like seven days of slower blocks, and then after that, the difficulty will readjust, and everything will be fine”. In fact, price action supports this claim. Litecoin price has been down 14.5% in 24 hours and likely to lose more. It is currently testing the $100 mark. Any close below $90 could scare investors in selling.

Ripple Experiences “Hat Trick” of Bearish Days

Today, the price of Ripple dropped from $0.36 to $0.328. Price support is located near the $0.322 level. Bulls will need to overcome the $0.336 level of resistance. Price has dipped below the 20-day Bollinger band, which shows that Ripple is undervalued. This means that bullish correction might be on the way soon.

 1.“Bitcoin Price Drops $2k in 24 Hours but Bull View Still Intact” by Okmar Godbole for Coindesk published 7/11/19

2. “Crypto Analyst: Bitcoin (BTC) Dominance May Reach 80%, Altcoins Expected to Bleed” by Tony Spilotro for NewsBTC published 7/9/19

3.“Litecoin Co-Founder Predicts Doom in August, LTC down 14.5%” by Dalmas Ngetich for NewsBTC published 7/11/19

4. “Ripple Price Analysis: XRP/USD Dips Below the 20-day Bollinger Band” by Rajarshi Mitra for FXStreet published 7/11/19

By Jing Zhu | Crescent City Capital Market Analyst Intern

On July 2, Bitcoin price fell to $9,700. However, it has quickly recovered to $11,800 in the span of 48 hours. The strong momentum of the U.S. stock market, the returning appetite for high-risk trades, the development of Libra, and the performance of gold are just a few factors that could be fueling the momentum in Bitcoin’s price. Since early 2018, Bitcoin price has similarly paralleled that of gold. The two assets often trade in tandem and both reached key thresholds in June, according to financial analyst Holger Zschaepitz of Welt. Bitcoin is currently trying to break the $12,000 resistance level. 

Bitcoin’s Correlation with Gold

Recently, the trade war with China has investors worried about a potentially shaky global economy. Many have consequently poured their money into assets like gold and Bitcoin, which are scarce and can be used as a hedge against economic downturn. Traditionally, gold was used as a store of value. Bitcoin is touted as “digital gold” and shares many of the same benefits as gold. 

Gold and Bitcoin prices have closely mirrored each other. The two have been in “lockstep” ever since gold broke upward resistance last month. For example, gold prices increased from $1,269 to the current price of $1,423 per ounce. At the same time, Bitcoin rose from $3,150 to $13,800. 

Since then, both have continued their rallies followed by consolidation periods. Because gold prices have started to climb, investors believe that Bitcoin may possibly follow suit.

Litecoin Outperforms Top Coins 

In anticipation of its halving event next month, Litecoin has performed very well. It is currently trading at $123 and has exhibited relatively consistent growth.

However, technical indicators do show a short-term price drop that may occur soon. The 5-candle MA and 10-candle MA have formed a bearish crossover. Additionally, the RSI is unable to get above 70, which indicates an impending bear market. However, this downtrend is most likely short term. Once the halving event occurs, prices should be right back up.

1. “Bitcoin Price Recovery Banishes Slump as Momentum Tests $12,000” by Joseph Young for CNN published 7/4/19

2.  “BTC and Gold Showing Correlated Moves, Will Bitcoin Price Rise from Here?” by Tony Spilotro for NewsBTC published 7/3/19

3.  “Litecoin Outperforms Top-10 Cryptos Ahead of August Reward Halving” by Okmar Godbole for Coindesk published 7/4/19

By Jing Zhu | Crescent City Capital Market Analyst Intern

Bitcoin Price Increases Weekly Gain to 30%

Early on Wednesday, Bitcoin price topped $12,900. It broke resistance around the $12,500 mark, but is currently hovering around that value. This momentum is impressive, especially considering that just last Friday, traders were waiting for Bitcoin to break $10,000. The price increase pushes the weekly gain to 30%. However, these accelerating gains can potentially be unfavorable. According to John Klovos, chief technical strategist at Macro Risk Advisors, a break above the $12,720 level “will allow for a complete retracement of the 2018 bear market”. While current Bitcoin price just broke $13,000, it is unclear whether the price will drop according to normal market fluctuations or continuously plummet and enter a bear market. Jeff Dorman, the chief investment officer of Dorca, believes that “the asset is now overbought, and due for a fall, flashing red”.

Litecoin: Overall Bullish Outlook

Since April, Litecoin price has increased in value. Currently, Litecoin has a 37.86% gain in the last 18 days. This altcoin attracts the attention of many investors because of its relative stability and growth without major shocks. Its market cap and value are 32.12% and 19.63% (respectively) higher than those last month. Litecoin appears to be undergoing a slight dip in price, but should make a comeback soon. Overall, it has a bullish medium-term outlook. In the immediate short-run, one should expect resistance around $139 and $142. 

Ethereum Breaks Away From Bitcoin Price Influence

Ethereum has been experiencing gains, although at a sluggish rate compared to that of Bitcoin. Nonetheless, it is currently trading at $306 and building bullish momentum. The $400 level mark will likely be closely watched by traders. The RSI (relative strength index) is moving back into being overbought, which clearly indicates strong bullish movement. Furthermore, the MA (moving average) has been steadily increasing and moving at a high of +10.58.

Ripple’s Compliance with Financial Action Task Force (FATF)

The FATF set forth new transparency requirements. To comply, Ripple recently announced its collaboration with Coinfirm, a startup that specializes in the regulation of digital assets. The FATF has established rules for entities that are considered digital operators.

1.  “Bitcoin Surge Pushes Weekly Gain to 30%, and It’s Only Wednesday” by Joanna Ossinger for Bloomberg published 6/26/19
2.  “Bitcoin Surges Toward $14,000” by Mark DeCambre for WSJ published 6/26/19
3.  “Litecoin Price Analysis: LTC Loses Value; a Bearish Short-Term is Likely” by Roxanne Williams for CryptoNewZ published 6/26/19
4.  “Ethereum Market Update: ETH/USD Breaks Away from Bitcoin Pushing New 2019 Highs”by John Isige for FXStreet published 6/26/19
5.  “Ripple XRP and its Ecosystem Making Steps Towards Compliance with FATF” by Ken Chigbo for FXStreet published 6/27/19

By Jing Zhu | Crescent City Capital Market Analyst Intern

Facebook Introduces Libra

On June 18^th, Facebook came out with the Libra coin. This new cryptocurrency uses cryptography to verify transactions, which will launch next year. Users of Facebook’s Messenger App will be able to access Libra coins through a digital wallet. Because Facebook has many users worldwide, it hopes that Libra will develop into a global coin that can be used in all transactions. This means that Facebook wants to provide financial services to millions of people who either do not have a bank account or cannot send money overseas. The Libra coin could potentially help out small businesses and those in third world countries.

Calibra is the regulated subsidiary that will provide access to the Libra coin and separate financial data from social media data. Facebook and more than two-dozen partners (including MasterCard Inc., PayPal Holdings Inc., and Uber Technologies Inc.) have formed a consortium that will govern Calibra and the Libra coin. 

Libra v. Bitcoin

Both Bitcoin and Libra are digital coins that allow users to exchange monetary value online, but major differences between the two exist. Facebook wants to establish a payments network on which users can buy goods and pay each other. Bitcoin, on the other hand, is more of a payment mechanism. According to WSJ, Bitcoin has evolved into a sort of “digital gold” to store value rather than exchange it. Furthermore, Facebook claims that Libra will be backed up by real assets (like bank accounts and short-term government securities), so it will not be as volatile as Bitcoin. This could be beneficial to users. By avoiding dramatic fluctuations in value, Libra could possibly be better suited for everyday transactions. 

While Facebook touts Libra as a better alternative to Bitcoin, it may be unlikely to affect the price of Bitcoin. Some see Libra as nothing more than PayPal with blockchain thrown into the mix, while others say that it could lead to more widespread adoption of traditional cryptocurrencies. In either of these cases, Libra is simply a variation of the traditional monetary system. It may not impact Bitcoin price because Bitcoin is (and still remains) the world’s first and most popular cryptocurrency. Bitcoin is an apolitical store of value and medium of exchange. Libra is different from that and has no effect on the “digital gold” market.

Libra: Potential Problems

Libra will likely encounter skepticism from regulators who believe that Facebook has too much power and is lax on privacy. Facebook is already under scrutiny over how it handles peoples’ private data. In fact, when Facebook came out with Libra on June 18^th, the French finance minister, Bruno Le Maire, immediately voiced his opposition. He claimed that Libra should not be a replacement for traditional currencies. Additionally, Facebook has a historically unimpressive record in payments and commerce. While Libra could change that, it might take some time for people to trust and learn more about incorporating the coin into transactions. 

Please see chart below:

Bitcoin Price Stalling

The price rally appears to have stalled at around the $9250 mark. Bitcoin has failed at least twice in the past four days to break the resistance level above $9300. However, as of later today, the price recently broke $9500. There is a bullish indicator of a golden crossover (where the white and yellow lines intersect). Some traders expect that the price may be looking to test the $10,000 mark sooner rather than later.

 1.“Libra Coin? What You Need to Know About Facebook’s Answer to Bitcoin by Parmy Olson for WSJ published 6/18/19

2. “How Will Facebook’s Libra Cryptocurrency Affect the Bitcoin Price?” by Kyle Torpey for Forbes Magazine published 6/19/20

3. “Facebook Wants Its Cryptocurrency to One Day Rival the Greenback” by Kurt Wagner, Olga Kharif, and Julie Verhage for Bloomberg published 6/18/20

4. “Bitcoin Price Rally Stalls as Open Futures Hit Record Highs” by Okmar Godbole for Coindesk published 6/20/19

By Jing Zhu | Crescent City Capital Market Analyst Intern

Technical Indicators Suggest Dip is Over

According to Bloomberg, the technical analysis from Fundstrat Global Advisors indicates that most cryptocurrencies are prepared for fresh gains. Relative strength index momentum is now turning upwards from neutral, which shows that there are strong trending markets. Rob Sluymer, a technical strategist for Fundstrat, states that “another upside attempt appears to be developing for most cryptocurrencies…We expect Bitcoin to stage another rally from current levels toward next resistance between $8,800-9000”. Additionally, Litecoin has also shown impressive strength. Sluymer wrote that “it just rallied through resistance near 121 and is approaching next resistance at 145”. 

Ripple’s Bullish Flag Subject to Breakout

Ripple’s price is trading marginally in the red, down about 60% in the second half. A bullish technical pattern (as indicated by the wedge-like structure in blue) shows that a breakout may soon occur. Heavy near-term supply ranges from $0.4 to $0.41, which currently caps upside potential.

Litecoin Price Spikes 357% in 2019 as Momentum Continues

See diagram below:

The increase in the value of Litecoin is driven by anticipation of its halving event in August of 2019. With its recent recovery, Litecoin has mitigated its loss to ATH to 61%, closely following Bitcoin’s performance. Although traders have feared a correction following a period of relative stability, they remain optimistic about Litecoin’s halving event.

Ethereum Recovers 6%

Ethereum’s current price is $257, which is significantly higher than its 24-hour low of $240. This coin enjoys weekly highs closer to $285, which was the highest price set in May of 2019. It is reasonable to expect Ethereum’s performance to continue to perform relatively well.

1.  “Buy Crypto as Technicals Hint Dip is Over, Fundstrat Says” by Joanna Ossinger for Bloomberg published 6/12/19
2.  “Ripple’s XRP Technical Analysis: XRP/USD Bullish Flag Subject to Breakout” by Ken Chigbo for FXStreet published 6/13/19
3.  “Litecoin Price Spikes 357% in 2019 and Momentum isn’t Dead Yet” by Joseph Young for CNN published 6/12/19
4.  “Ethereum Recovers 6%: Are Investors Compelled by Ubisoft Experimenting with Blockchain?” by Cole Peterson for News BTC published 6/12/19

By Jing Zhu | Crescent City Capital Market Analyst Intern

Currently, Bitcoin is experiencing another bull run. In May of 2019, prices surged well above $8000. This phenomenon has not been seen since November of 2017. For example, on November 25^th, 2017, Bitcoin dominated the market across all cryptocurrencies, achieving a 52% overall market cap. Now in 2019, Bitcoin has achieved a 57% overall market cap.

Bitcoin Daily Transactions 2017 v. 2019

See diagram below:

The number of daily transactions has increased by a small amount. In November of 2017, there were daily 337,000 transactions. Now, that number has increased to around 390,000 transactions. However, many analysts tend to agree that those numbers underrepresent the actual amount of economic activity occurring.

Bitcoin General Comparisons 2017 v. 2019

Overall, while Bitcoin has once again experienced a bull market, there are some differences from the one back in 2017. For example, the number of transactions, hash-rate, and average block size have all increased in 2019. Furthermore, there are more fiat-on ramps, which means that there are more exchanges that allow for fiat to crypto trading (like Binance). The SEC has reduced the number of scams since 2017, which protects users and their investments. Additionally, big-name companies like J.P. Morgan, Facebook, and Fidelity have increased Bitcoin adoptability in 2019. In general, the current bull run for Bitcoin seems promising.

1.  “Comparing Bitcoin Fundamentals at $8000 in 2017 vs. 2019, What Has Changed?” by Ali Martinez for Cryptoslate published 5/26/19
2.  “’2019 is the new 2017’ for Bitcoin, says Crypto ‘Wunderkind’” by Christina Comben for Bitcoinist published 6/10/19

By Jing Zhu | Crescent City Capital Market Analyst Intern

According to the GTI Vera Convergence-Divergence indicator, which displays positive and negative trends, the halt in Bitcoin’s rally may include further downsides. Jake Stolarski, a senior trader at Greenwich, asserts that the market is currently trying to stabilize. As a result, key technical levels are creating high volatility in the market. Bitcoin price dropped 12% to $7,544.42 since its 62% surge in May. Even though Bitcoin briefly rose back to trade at $9000 last week, it has not reached that level since. Other coin prices have fallen well, as shown by Ether and Litecoin. Stolarski claims that resistance levels are evident to people who are trying to find a stabilizing point in the market.

Ethereum Price Recovering but Still Struggling

Ethereum has begun a short recovery after trading at a low of $233. The price action is currently positive. For example, Ethereum has exceeded the resistance levels of $235 and $240. Its price has broken above the 23.6% retracement level of the $270 high to the $233 low. However, many hurdles remain. The price is currently trying to the break the $248 – $252 level of resistance. If price does not move above $252, then there could be a risk of downside extension below $230.

Ripple Inches Closer to Breakout

Ripple is looking for support that will allow it to reverse the trend above $0.40. Price declines in the past few days have demoralized buyers, who appear to be hibernating for now. There is just enough buying power to sustain the weak support above $0.39. There is tested support at the $0.38 level.

Bitcoin Cash Has Limited Upside

Bitcoin Cash is currently trading at $389.17 after a 2.15% loss. The declines from the last week of May have caused a bit of a downward pattern in price. Bitcoin Cash has touched levels close to $360, although it made a short-lived recovery above $400. Upside is still limited under the 100 four-hour MA (moving average). An increase in selling pressure also makes it hard to break $400. For now, expect to see prices range from $375 – $400.

1. “Bitcoin Indicator Flashes a Sell Signal as Slump Accelerates” by Vildana Hajric for Bloomberg published 6/4/19
2.  “Ethereum Price Recovery Underway but Still Struggling” by Aayush Jindal for NewsBTC published 6/6/19
3.  “Ripple price analysis: XRP/USD inches closer to a breakout – Bollinger Band consolidation” by John Isige for FXStreet published 6/6/19
4.  “Bitcoin Cash Price Analysis: BCH/USD Hunting for Support; the Upside is Limited” by John Isige for FXStreet published 6/6/19

By Jing Zhu | Crescent City Capital Market Analyst Intern

Bitcoin Cash (BCH) May Hit 500 USD

Bitcoin Cash has recently suffered a blow with a 51% attack on May 15^th. On the 15^th, the price ranged from 350 to 374 USD. However, the price now displays a forceful upward trend, soaring past 9% in the past 36 hours. After the price drop on the 15^th, Bitcoin Cash price increased to 465 USD as of yesterday. Today, the price has jumped even further to 466.76 USD. If the upward trend continues, then it might be possible for Bitcoin Cash to hit 500 USD, even if there may be short breaks in the rally.

Ripple (XRP) Price’s Increase of 27% Confirms Golden Crossover

According to technical analysis theory, a “golden crossover” is a pattern that indicates long-term bullish reversal. On May 27^th, this coin traded at 0.413 USD, which is a 27% gain from its opening price of 0.3249 USD on May 1^st. While this recent gain is relatively modest compared to those in September 2018, bigger gains may be coming in the next few months, as demonstrated by technical indicators such as the MA (moving average). The current 50-day MA is at 0.3434 USD. It is set to exceed the 200-day MA of 0.3470 USD. This confirms the “golden crossover” pattern, which may encourage more buying. According to Coindesk, “The crossover confirmation could be followed by a convincing break above the recent high of $0.4787 as the 14-day relative strength index (RSI) is currently biased bullish at 61.00 and well short of the overbought territory (above-70)”. 

Monero (XMR) Has Big Potential

On May 3^rd, Monero was trading at 70.263 USD. This Tuesday, its price increased by 41.77%, as the coin was trading at 97.616 USD on May 28^th. Some speculate that there will be a short-term resistance at 120 USD. If Monero can break through this resistance, then it may likely exceed the $200 end-of-year target early. Also, note that the extension and scalability of blockchain is a concern for Monero because of its focus on anonymity and security.

Why Bitcoin (BTC) Price May Reach 30,000 USD Before 2020

In an interview with Bloomberg, Jihan Chu, the co-founder of Kenetic Capital, predicts that Bitcoin price may increase to 30,000 USD by the end of 2020. He lists three bullish factors to support his position. First, the price of Bitcoin will be boosted by Facebook, J.P. Morgan, and Fidelity. J.P. Morgan and Facebook have each developed their own coins, while Fidelity has implemented crypto custody. Chu believes that these companies will fuel the next stage of bitcoin adoption. Second, Bitcoin is an alternative to lackluster IPOs. In the wake of the disappointing public offerings by both Lyft and Uber, investors may turn to crypto as another method of investment, thus boosting price. Third, the halving of bitcoin will be coming in May 2020. This means that the reward of bitcoin miners will be reduced in half. It is meant to ensure that the number of coins in circulation will not exceed the 21 million hard cap supply. Because supply is expected to drastically decrease, the prices will hike up, usually to the double-digits in percentage points. Chu believes that a combination of these three reasons may get Bitcoin’s price to 30,000 USD.

Altcoin Season Begins with Litecoin’s Halving

Analysts project an altcoin rally driven by the anticipated Litecoin halving in August 2019. As of May 29^th, Litecoin traded at 116 USD, with a market cap of 7.2 billion USD. Right now, the market is experiencing positive momentum with Bitcoin taking the lead. This offset of supply and demand will likely lead to higher prices for Litecoin and other altcoins. 

1. “Bitcoin Cash Price Analysis 30 May 2019; Can BCH Price Hit 500?” by Saad B. Murtaza for Cryptopolitan published 5/30/19

2.  “Golden Crossover: XRP Heads for Bullish Chart Pattern as Price Climbs 27%” by Okmar Godbole for Coindesk published 5/27/19

3. “Monero Price Analysis: XMR Has Immense Potential, targeting at 200 USD by the EOY” by Roxanne Williams for CryptoNewZ published 5/28/19 

4. “3 Killer Reasons Bitcoin Price Will Smash $30,000 Before 2020: Fund Manager” by Ben Brown by CNN published 5/28/19

5. “Fresh Altcoin Season Set to Begin with Litecoin’s Upcoming Halving” by Paul Luvaga for ZyCrypto published 5/29/19