Price Analysis Dec 18: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XTZ, XLM
Price Analysis 09/12: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XLM, XTZ
It may seem surprising, but platforms designed for loans and lending through the use of cryptocurrencies are a relatively new development for the crypto industry. Each platform adheres to its own strategy, but the idea shared by all is that users put their cryptocurrency into an automated smart contract as collateral for a loan.
The contract tracks accrued interest and credit payments and also prevents anyone from interfering in this process. Unlike traditional lending, there is no need for credit checks and scoring, as well as for the lender to seriously consider the option of physical pressure on the borrower.
A young industry
Cryptocurrency loans platforms began to develop during the bear market of 2018, as crypto prices became critically low at the peak of the downturn. At the time, owners of digital currencies who didn’t want to sell their crypto at low prices lent out their holdings and made money on interest.
The popularity of lending in digital currencies has grown for several reasons:
- Low interest rates
- Increase in the number of traders and investors for whom receiving funds immediately in cryptocurrencies is convenient
- A simplified system of requirements for borrowers; those who hadn’t been approved for bank loans could easily receive digital money
Today, the entire crypto loaning industry is estimated at $4.7 billion and the number of crypto loan platforms is growing rapidly, according to a report made by blockchain company Graychain Ltd. While lenders have only earned a combined $86 million in interest since 2018, the demand for cryptocurrency loans is growing. In the first quarter of 2019, over 5,400 new loans were issued, and in the second, at least 18,500. The volume of lending also increased, with lenders issuing $64.8 million in loans in the first quarter and $159.3 million in the second.
Thus, it is clear that, despite its newness, high risks, and very low profitability, this new crypto industry is gaining momentum. There are also critics of crypto loans who claim that crypto credit is expanding too quickly and will explode, as the signs of a bubble in this area are too similar to the traditional problems of financial markets: low lending standards and an excessive supply of funds with little demand and increased risk.
Which loan to choose and where
Crypto lending can be divided into two main areas: depository and undetectable.
Depositary lending is more centralized. It involves securing a loan through a trusted third party, who is given a significant level of authority through complete control over user assets, setting interest rates, and acting as a counterparty in each transaction.
Depositary lending is the most popular form of crypto loan and is used by several large credit companies, such as Genesis Capital, Celcius Network, Salt Lending and others.
The second crypto lending path is non-custodial in nature and more decentralized, which better serves traders and retail investors. This type of lending is mainly supported by the developing class of decentralized applications created on Ethereum.
Using smart contracts, these platforms can create a system in which users don’t need to trust centralized authorities, as smart contracts show all the processes throughout the entire life cycle of the loan and are automatically repaid. Paul Murphy, co-founder and CEO of Graychain, a crypto credit rating platform, believes that finding a convenient service is not a problem:
“In places with thriving, well-developed financial systems crypto is being absorbed as new asset class. This will continue to happen under the watchful eyes of regulators. Despite the constraints we can expect to see innovation because of crypto’s unique properties. We can expect to see crypto lending continue to develop in places like the US, EU, Japan, HK, and Singapore.”
Murphy believes that in less developed countries, where traditional finance has a weak foothold, regulatory structures are weak, and many citizens are unbanked, cryptocurrencies allow a new financial system to emerge:
“We are currently seeing the most activity in South East Asia but also lots of interest throughout Africa. There is some interesting work being done in Latin America, but most interesting projects are moving out of the region. This isn’t surprising as many people in Latin America have relatively close ancestral ties to Europe.”
Crypto loans platform comparison
Spread out all over the world, below are the most distinctive crypto lending platforms.
Founded in June 2017, BlockFi is a New Jersey-based crypto asset management company that allows users to earn interest and borrow money through offering crypto as collateral. BlockFi works with Gemini Trust Company, which is fully licensed by the New York State Department of Financial Services.
The company specializes in two types of services: interest-bearing accounts that earn money, and quick loans with Bitcoin, Ethereum and Litecoin.
Each loan is issued on the basis of a loan-to-value ratio. Since the loans offered by BlockFi are secured by assets, the company does not require credit score checks of its users. BlockFi customers receive money against their Bitcoin, Ethereum or Litecoin collateral with a loan-to-cost ratio of up to 50%.
The loan-to-value ratio determines how much collateral is required to get a certain amount in dollars. Collateral guarantees that the borrower will be interested in repaying the loan, and is used to repay the lender in the case of nonpayment.
Each loan issued by BlockFi is for a duration of 12 months, with the ability to make early payments at any time without commissions and penalties. BlockFi interest rates begin at 4.5%, depending on the loan-to-value ratio. BlockFi also enables its users to earn interest on deposits through the BlockFi Interest Account, which provides up to 8.6% per annum.
BlockFi generates interest by accepting deposited assets and providing them on credit to trusted third-party institutional and corporate borrowers. Such loans also have collateral and have the same structure as BlockFi crypto loans.
One of the first platforms in the market was SALT, short for Secure Automated Lending Technology. The project was founded in the United States in 2016. It is a blockchain-based lending platform that allows users to receive funds directly to their bank accounts. Currently, SALT Lending has expanded to 33 U.S. states and also operates in the United Kingdom, New Zealand, Hong Kong and Vietnam.
The most important participants of the platform are lenders, as SALT provides them with the infrastructure, flexibility and security necessary to accept coins without adding additional costs to the process. In exchange for these services, lenders pay for membership on the platform. The service never asks for a credit rating — instead, it uses only the value of collateral to determine the terms of the loan.
Lenders begin the process by publishing the terms on which they are ready to provide a loan. Borrowers can browse through various options and choose the one that best suits them. As soon as borrowers choose a loan, lenders hold the corresponding funds until the borrower provides a security using a smart contract. Funds are then sent directly to the bank account.
The borrowers then pay monthly installments toward their loan according to its terms, and when the loan is repaid, SALT releases the security deposit from the smart contract and returns it.
SALT Oracle creates a smart contract for each loan and credit event. To reduce the risk of nonpayment, the Oracle records all payments made on loans and monitors changes in the value of provided cryptocurrency collateral. Each loan starts with a credit-to-value ratio that is calculated based on current market prices.
SALT tokens, also known as membership tokens, are based on the ERC20 standard and are required to purchase membership on the platform. Bitcoin (BTC) and Ethereum (ETH) are both accepted on the platform, and as of April 2019, the company announced that it will also work with Dash as collateral for loans.
Established in 2017, Nexo is an instant lending platform that claims to have a military level of security (256-bit encryption). To start the loan process, users transfer assets to their secure Nexo wallets, where these assets come under the protection of the BitGo repository. Then, users may obtain instant credit. The platform accepts submissions of BTC, ETH, XPR, LTC, XLM, BCH, stablecoins, NEXO tokens and BNB as collateral.
After confirming the collateral, the Nexo Oracle evaluates the collateral and then calculates a suitable loan-to-value ratio. After the LTV is calculated, users receive money directly in the form of fiat or a stablecoin.
Repaying a loan to Nexo is quite flexible, as users are not required to repay monthly until their balance is less than the loan limit. Like SALT, Nexo tokens can be used to lower interest rates and repayments.
Borrowers can take advantage of a 50% discount on the loan’s interest rate if the security deposit or loan repayment is paid in Nexo tokens. Users of the platform can repay all or part of their loans at any time via bank transfer, cryptocurrencies or assets deposited in their Nexo wallet.
Once borrowers have repaid the entire loan amount along with interest, they can easily withdraw their crypto assets from their wallet. George Manolov, business development executive at Nexo, pointed out that users pay interest only on what they actually spend:
“Our customers only pay interest on the amount they borrow. In contrast, other lenders require you to withdraw the entire amount of a loan at the time of origination, meaning customers pay interest on their full loan.”
The Celsius Network was created in 2017 and is a crypto credit platform providing a new model of financial services that act in the best interest of the community. It has a mobile app that allows users to earn interest on stablecoins and a number of cryptocurrencies.
The Celsius platform allows borrowing money against crypto collateral at interest rates as low as 4.95% per annum. This interest rate works mainly for dollars as well as stablecoins such as USDT and USDC, and the minimum loan limit is $1,500, which needs to be backed by an equivalent amount in crypto.
Celsius has a full-fledged transaction instrument called CelPay, which works as a wallet that allows free cryptocurrency transfers from one wallet to another. Furthermore, Celsius Network charges no fees for withdrawals, deposits, transactions or early terminations. The platform has its own token, CEL, which is purely a service token that is used to provide users with discounts on borrowing and deposit services.
Additionally, any user can become a lender by putting their crypto into cold storage and earning interest from it. Regardless of the amount that users are ready to put in, they earn weekly interest in either the same token deposited or the native CEL token.
At the moment, Celsius Network is one of the biggest crypto loan platforms in the world, reaching $4.25 billion in total crypto loans in November.
YouHodler is a Swiss company that specializes in providing a cryptocurrency line of credit and a cryptocurrency exchange platform. Founded in 2018, the company’s mission is to minimize passive ownership, allowing investors to earn interest on their assets or borrow money.
One of the most core products offered by YouHodler are cryptocurrency loans, available in tokens such as BTC, ETH, XRP, Dash, LTC and so on. Depending on the token, users can choose one of the available plans, which differ by loan period. For example, users can choose plans that range from 55% to 95% in cost ratio, from 5% to 40% in price reduction, and a loan period from 30 days to 180 days.
The company does not perform any credit checks, as user credit scores are meaningless to the loan application process. Borrowed money is fully secured by cryptocurrency and is based on the loan-to-value ratio. Because of this, even if users cannot repay their loan, their credit score will not be affected.
Additionally, YouHodler has a Turbocharge service, which allows users to get a chain of loans. The platform uses borrowed fiat to purchase additional cryptocurrency without commission and then uses it as collateral for other loans in the chain. Ilya Volkov, CEO of YouHodler, says the option is popular among traders:
“Clients were using loans to buy more crypto to use as collateral for yet another loan and then using that again to buy more crypto for collateral. They would do this process manually multiple times. So, we invented an automated tool that completed this chain for them in one click.”
Price Analysis 27/11: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XLM, TRX
Price Analysis 25/11: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XLM, TRX
At present, the combined capitalization of the 2,022 crypto assets with a known market cap was roughly $222 billion.
On Nov. 19, 2017, just weeks before the current all-time highs would be set for the price and capitalization of Bitcoin and the crypto market overall, the 985 tokens with a known market cap represented a capitalization of around $244 billion — a similar zone to where the market is at currently.
However, with the capitalization of Bitcoin (BTC) having grown 15% from $134.1 billion to $154.6 billion during the 24 months following November 2017, more than twice as many altcoins are competing for an increasingly shrinking share of the combined crypto market cap when compared to the altcoin bubble of 2017.
Altcoins compete for diminishing market share
While 2019 has seen BTC produce an impressive recovery, the majority of altcoins have lost a significant market share when compared to 2017.
As of Nov. 17, 2018, the combined crypto capitalization was approximately $186 billion after having shrunk by 21.7% over 12 months. Since November 2017, the dominance of BTC had fallen from 56.5% to 52.6%, with altcoins gaining an overall 47.4% market share of crypto capitalization.
However, the number of tokens with a known capitalization had risen 75.8% to 1,732, increasing competition among altcoins for a shrinking pool of liquidity — with the combined capitalization of altcoins having dropped from $107.2 billion to $86.8 billion just 12 months later.
Despite the number of crypto assets having increased by a further 16.7% since November 2018, the combined altcoin capitalization reduced by roughly 8% to $80 billion during the past year. As such, altcoins have seen increased proliferation in the face of a declining pool of liquidity for two consecutive years.
Altcoin capitalization centralizes among top markets during 2019
Between November 2017 and November 2018, the relative market share of alternative cryptocurrencies became more pluralized, with the share of capitalization represented by altcoins sitting outside of the top 10 by market cap, increasing from 23.3% to 28.4% despite the dramatic rise in the number of markets.
The greater pluralism in the distribution of altcoin capitalization in 2018 can be largely attributed to a decline in the relative market share of Ether (ETH) and Bitcoin Cash (BCH) throughout the 12 months prior. Together, ETH and BCH had shed 23% of altcoins’ relative market share in one year.
Of the 10 largest altcoins by market cap on Nov. 18, 2017, only XRP’s market share increased throughout the next year, becoming the largest altcoin by capitalization and representing 22.8% of the combined altcoin market cap on Nov. 17, 2018.
While Litecoin (LTC) and Monero (XMR) both remained in the top 10 ranking of altcoins by market cap between November 2017 and November 2018, both tokens suffered losses in relative market share.
LTC fell by one rank, from fifth to fourth, shedding nearly a third of its relative market share in the process — from 3.7% during November 2017 to 2.8% one year later. XMR also fell one rank, from eighth to ninth, with its market share dropping from 1.9% to 1.7%.
Dash, NEO, Iota, Nem (XEM) and Ethereum Classic (ETC) all fell from the top 10 altcoins by capitalization as their relative market share declined in 2018. They did, however, retain their rank among the top 20.
Related: A Different Look at Crypto Market and Top Assets, How Dominated Is It?
Dash fell from fifth, with an altcoin market share of 3.3%, to rank 12th with 1.3%; NEO fell from sixth with 2.5% to 15th with 0.9%; Iota fell from seventh with 2.3% to 11th with 1.3%; NEM moved from ninth with 1.8% to 14th with 0.9%; and ETC fell from 10th with 1.7% all the way to 16th place with 0.9%.
As of Nov. 17, 2018, the relative market share represented by the alternative cryptocurrencies ranked third to 10th by capitalization had increased from 17.2% to 19.9%, with XLM, EOS, Tether (USDT), Cardano (ADA) and Tron (TRX) having emerged among the top 10 altcoins by market cap.
In just 12 months, XLM rose from the 20th-ranked altcoin, representing a relative market share of 0.6%, to the fourth-largest alternative cryptocurrency, with 5.5% of total altcoin capitalization.
EOS also climbed, from 14th with 0.88% in 2017 to rank fifth with 4.7% in 2018, while Tether grew from 19th with 0.7% to place sixth with 2%, and ADA grew from 18th with 0.7% to seventh with 1.8%, while TRX produced the most dramatic growth, climbing from the position of 53rd-largest altcoin with a relative market share of 0.1% to rank tenth with 1.4%.
Altcoin capital centralizes during 2019
During 2019, altcoin capitalization has significantly centralized among the top alternative currencies by market cap. Currently, the 2,011 alternative cryptocurrencies that do not rank among the top 10 by market cap are competing for just 20.61% of the total combined capitalization.
In 12 months, ETH has restored its ranking as the largest altcoin by market cap and increased its market share by a quarter, currently representing 25.1% of the total altcoin market capitalization.
XRP now ranks as the second-largest alternative cryptocurrency by market cap following a 39% drop in relative market share, which currently sits at 14.2%. Despite BCH seeing another 12-month decline in altcoin market share, the token retained its distinctive position as the third-largest alternative cryptocurrency by market cap, with BCH now representing 6% of altcoin capitalization.
As such, the relative dominance of the three largest altcoins has increased 7% year-on-year from 51.7% to 55.4%.
Top 10 altcoins gain market share
The market share of altcoins represented by the tokens ranking from third to 10th by capitalization also increased for the second consecutive year, currently representing 24% of the combined altcoin market cap.
The relative market share of Tether increased by 160% between November 2018 and November 2019, with USDT ranking as the fourth-largest alternative cryptocurrency and comprising 5.2% of all altcoin value.
LTC also saw a significant gain in market share, with LTC currently ranking as the fifth-largest alternative cryptocurrency by market cap after its relative market share increased by 66% to 4.7%.
The sixth-largest altcoin by capitalization, Binance Coin (BNB), has risen from the 13th-ranked altcoin due to a 230% gain in market share and currently represents 3.9% of altcoin value. The seventh-ranked altcoin, Bitcoin SV (BSV), also constitutes a new entrant among the top 10 altcoins, representing 2.79%.
TRX saw an 11.4% gain in relative altcoin dominance, currently ranking as the 10th-largest alternative crypto asset, with a market share of 1.6%.
Altcoin trade volume grows steadily
Despite the increasing centralization of altcoin capitalization among the top markets over recent years, many alternative cryptocurrencies have seen a significant increase in trade activity.
On Nov. 18, 2017, the 10 most-traded cryptocurrencies reportedly generated $7.1 billion worth of trade during 24 hours. BTC, BCH and ETH amassed a combined 24-hour volume exceeding $1 billion, while eight tokens including USDT, NEO, LTC, XRP and ETC also produced a daily volume greater than $100 million. Overall, 23 crypto assets posted eight-figure volumes or higher.
Despite the brutal bear trend of 2018, the combined daily volume reported by the 10-most traded tokens had increased 66.8% by Nov. 17, 2018. Only three of 2017’s 10-most traded tokens saw a decline in volume, with BCH, Dash and Iota seeing a dip in trade activity. During the period, 14 cryptocurrencies each garnered a 24-hour trade volume exceeding $100 million, and 36 other assets boasted a volume of more than $10 million.
This time around, the 10-most traded cryptocurrencies produce $56.8 billion in daily volume — an increase totaling 381% year-on-year and 700% over the last 24 months.
None of 2018’s most popular tokens have posted a reduction in trade volume, despite BSV and TRX replacing ZEC and NEO among the top ten. USDT, BTC, ETH, LTC, BCH, EOS and XRP posted 24-hour volumes exceeding $1 billion, while 33 other tokens reported more than $100 million in daily trade and nearly 150 tokens continuously producing more than $10 billion worth of trades.
$450 million worth of lost cryptocurrency from the now-defunct cryptocurrency exchange WEX may have been transferred to a fund belonging to Russian intelligence agency the Federal Security Bureau (FSB), according to an investigation by the BBC’s Russian Service published on Nov. 15.
The BBC’s recent investigation into the BTC-e crypto exchange case, in which co-founder Alexander Vinnik stands accused of fraud and laundering as much as $4 billion in Bitcoin (BTC) over the course of six years, has revealed new details which allegedly connect lost customer funds to the FSB.
Demands to hand over crypto assets to the FSB
The BBC retrieved audio files that allegedly connect a person named Anton — supposedly former FSB officer Anton Nemkin — with Aleksey Bilyuchenko, a co-founder of BTC-e, and Konstantin Malofeyev, who was purportedly behind the sale of WEX, a spin-off of troubled BTC-e.
During a business meeting in 2018, Anton allegedly requested that Bilyuchenko hand the cold wallets containing crypto assets of WEX over to him. Following the purported handover, Bilyuchenko was delivered to an FSB department in Moscow, where several plainclothes officers questioned him about WEX operations.
The following day, Anton allegedly demanded that Bilyuchenko passed on all cryptocurrency stored in WEX’s wallets, stating that the assets will be given to the “fund of FSB of Russia.” At the time, the wallets contained $450 million worth cryptocurrency, part of which belonged to the exchange’s customers.
Bilyuchenko eventually agreed to transfer the aforementioned amount. The data from Blockchain.com and Explorer.Litecoin.net indicated that 30,000 BTC and 700,000 Litecoins (LTC) were transferred from the aforementioned wallets — equivalent to $350 million at the time.
Other allegations against associated parties
In July, Dmitri Vasilyev, former CEO of WEX, was arrested in Italy. In April 2019, Vasilyev became the subject of a criminal investigation by the police department in Kazakh city Almaty, as the alleged suspect was charged with defrauding a local investor in the amount of $20,000 through WEX exchange.
That same month, United States prosecutors filed a complaint against BTC-e and Vinnik. Per the filing, the Financial Crimes Enforcement Network (FinCEN) determined civil penalties for BTC-e and Vinnik last year, who face fines of over $88 million and $12 million, respectively.
The filing stated outright that BTC-e and Vinnik had not attempted to register with FinCEN, implement Anti-Money Laundering practices, or report suspicious activity generally.
Price Analysis 15/11: BTC, ETH, XRP, BCH, LTC, EOS, BNB, BSV, XLM, TRX
Privacy-centric coin Grin received an anonymous 50 Bitcoin (BTC) donation to its General Fund on Nov. 11, sparking a bizarre rumor that the generous soul behind it was Satoshi.
The donation, announced the same day by Grin on Twitter, was made via crypto exchange Coinbase by a donor who expressly wished to remain anonymous, according to a Nov. 11 forum post by Grin dev Daniel Lehnberg.
“Work freely” without dependency
Lehnberg has revealed that he briefly interacted with the donor. While upholding his/her/their desired anonymity, he nonetheless shared some of the donor(s)’ edited remarks, including reported statements such as:
“Our motives are not economical! It’s about the technology and the protocol. Please put it to good use for the development of GRIN. You keep working as you did in the past […] This is what we are honouring right now with these donations so that you can work freely […] without economic dependencies.”
Apparently finding the unusual nature of the donation to be not quite enough, some cryptocurrency media outlets responded by confecting the theory that Satoshi Nakomoto — Bitcoin’s mysterious inventor(s) — was behind the donation.
The theory was fed by an apparent Telegram group chat message from Litecoin (LTC) founder Charlie Lee revealing that the donated coins were mined in 2010, and transferred from a wallet that had been idle for almost 9 years.
Lee has since confirmed the message was “just a joke.”
As previously reported, Grin is a privacy coin that implements scalability- and privacy-focused Mimblewimble protocol — named after a fictional tongue-tying curse from the popular Harry Potter novels.
Mimblewimble is in part a variant of the cryptographic protocol known as Confidential Transactions, which allows for transactions to be obfuscated yet verifiable so as to achieve both heightened privacy and the prevention of double-spending.
This summer, Grin underwent a hard fork — the network’s first since its launch in mid-January of this year — to introduce tweaks to its consensus algorithm in order to achieve greater resistance to ASIC miners.
This October, the Litecoin Foundation published two new draft improvement proposals designed to work toward establishing privacy features for the network by integrating Mimblewimble.
Bitcoin price (BTC) failed to ignite much interest as October closed. There are approximately 194 days left until the next Bitcoin halving, which probably feels like an eternity away for those involved with the crypto space.
This week there was also a surplus of negative news events like the Bitmex email leak and the Coinbase flash crash that caused mass liquidations on Deribit. So can we really expect Bitcoin price to do anything spectacular in the short term?
Daily crypto market performance. Source: Coin360.com
BTC USD daily chart. Source: TradingView
Bitcoin price has been locked in a tight range around $9,100 – $9,400 for the last 5 days. However, since the massive move 2 weeks ago, the Bollinger Bands (BB) indicator has opened up revealing quite a broad range of support and resistance.
The moving average shows $8,600 being the level of support that Bitcoin needs to hold before falling back in to the $7,000 range. However, it is a positive sign that Bitcoin is currently holding in the upper percentile of the Bollinger Bands as the resistance that Bitcoin needs to break to begin a new upward trend is at $9,900.
But what does the week ahead hold? Well, let’s first take a look at the first major bullish signal for Bitcoin that came on Nov. 1 when a new green monthly candle was printed.
BTC USD monthly chart. Source: TradingView
Let’s not underestimate the significance of this particular signal. The last time that the Heikin Ashi candles transitioned from red to green on the Bitcoin monthly chart was on April 1st, 2019.
Within just 12 weeks of this last occurring, Bitcoin’s price exploded from a low of $3,979 to $13,868 which represented a massive 350% growth in BTC/USD value.
Whilst it’s still early days, as each week progresses Bitcoin is slowly showing more bullish signs, and if history were to repeat itself we could be instore for 29% weekly growth as we head into the new year. But what other signs are there?
Is the weekly MACD turning bullish?
BTC USD weekly MACD. Source: TradingView
The weekly chart for Bitcoin has some golden nuggets starting to appear but they are not quite there yet. Using the Moving Average Divergence Convergence (MACD) we can see that the MACD line is beginning to gear up for a bullish cross, and for the past 2 weeks, the red candles on the histogram have been getting weaker.
This is a telltale sign that Bitcoin is due to enter its next bullish phase in the coming weeks. How long this will take depends on a multitude of factors, but one such place to look is on the Relative Strength Index (RSI) indicator to see if Bitcoin is oversold yet.
The weekly RSI is not showing any signs of life
BTC USD weekly RSI. Source: TradingView
Currently, the RSI on the weekly timeframe is planted in a no-trade zone. Whilst this does not necessarily mean that Bitcoin price will not increase this week, this particular indicator isn’t giving off a strong buy or sell signal.
The RSI is currently reading 54.99 after bouncing up from 45 over the last few weeks. It could be that we have already witnessed a reversal and Bitcoin price could begin to rise, but history tells us that there is probably some more downward movement ahead of us before we start to see sustainable weekly gains.
Bitcoin price targets
BTC USD weekly chart. Source: TradingView
The massive spike that occurred two weeks ago did cause Bitcoin’s price to break the moving average (MA) on the Bollinger Bands (BB) Indicator. One can normally expect the price to then form new support above the MA.
This hasn’t yet happened, and at the time of writing the moving average is around $9,945 whilst Bitcoin price is currently $9,148. Given the visible momentum from the candles on the weekly chart, it is not unreasonable to expect Bitcoin price to close over $10,000 before the end of the coming week if the bulls have their say.
If Bitcoin price can achieve this growth, then this puts $12,000 as the next level of resistance. On the downside, however, the support is still around $7,914 so the coming week could hold lots of surprises for both the bulls and bears amongst us.
Is Litecoin poised for 42% gains?
LTC USD weekly chart. Source: TradingView
There are a few reasons to focus on Litecoin (LTC). Using the same analysis on Bitcoin, the weekly positioning looks like a stronger buy on Litecoin than is does on Bitcoin.
Litecoin price seemed to have found support two weeks ago around $47 and at the time of writing the LTC/USD pair is at $57. Using the moving average on the Bollinger Bands indicator to gauge the next level of resistance shows that Litecoin looks ripe for a move up to $82 before being rejected, which would represent growth of 42%
LTC USD weekly MACD. Source: TradingView
From a glance of Litcoin’s weekly MACD, we can see that whilst the MACD and signal lines look almost identical to that of Bitcoin, the histogram is showing is that a bullish reversal is likely to be more imminent than Bitcoin’s weekly MACD. Litecoin has printed four consecutively weaker candles whereas there are only two on Bitcoin.
As the weekly candle draws to a close on Litecoin, it is likely to show a stronger buy signal to that of Bitcoin, and the RSI provides further confirmation of this.
Litecoin’s RSI looks oversold
LTC USD weekly RSI. Source: TradingView
Compared to Bitcoin, Litecoin’s RSI is at 38.96 after a bounce from 34. Typically traders that use the RSI to identify heavily oversold assets would be looking for a reading below 30, but it’s a far better signal than Bitcoin’s current reading in the high 50’s.
As such, from a purchasing point of view, Litecoin looks to have greater upside potential and stronger technicals than Bitcoin for the week ahead.
As Bitcoin continues to consolidate, the first level of support can be found at $8,600. The bears might be cheering this forthcoming week so I’d expect this would be a short-lived victory.
Should $8,600 fail to hold, the next levels are $7,900 and then $7,200. The doom and gloom scenarios calling for a revisit to $6,000 are now less likely to playout, however never say never, Bitcoin forever surprises investors and traders alike.
Bitcoin is currently about $600 away from both support and resistance, but a break upwards at this stage could see the price begin to form a new level of support around the $9,900 region.
The views and opinions expressed here are solely those of the @officiallykeith and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.