Monthly Cryptocurrency Market Update; Consolidation Is In Effect

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Monthly Cryptocurrency Market Update; Consolidation Is In Effect

The Cryptocurrency Market Is Consolidating

The cryptocurrency market has had an impressive run higher this year. Most coins count their gains in the triple digits and there is reason to believe the run is not over, bigger gains are on the way. There are several drivers for the rally but the one I see as most significant is the halvening. The halvening is when the block reward for a proof-of-work blockchain is cut in half. What that means is that miners earn half as much per coin after the halvening as before it, a situation that increases the value of all tokens of the same variety.

In our case we have not one but two halvenings. The first is with the Litecoin blockchain. Litecoin is arguably the most important Bitcoin fork and set to halve its reward in under 30 days. The target ETA data is August 5, 2020, the block reward will be cut from 25 to 12.5 coins. While the halving doesn’t realistically improve the value of all LTCs equally, it does make the market less liquid and encourages hoarding of coins. That is what will make the value of LTC increase. As tokens become scarce and the market expands the supply/demand imbalance will underpin long-term price gains. And there will be another halvening in 840,000 blocks, and then another, and another.

The price of Litecoin has been one of this years biggest movers. The coin has risen 545% from the low to the recent high and could easily double itself again. The coin has broken above a key resistance on strong volume, held the level for over a month and consolidated at a new support. Price action is below the short-term moving average which is something I don’t like but that is offset by indications of support in the MACD and stochastic. Both the indicators are set up to fire a rebound/reversal signal, the catch is that they’re still bearish and could lead the coin down to the stronger support level. Support looks to be near $120, it might actually be closer to $106. In either event, a bounce from support is the signal to buy.

Bitcoin’s halvening is a little further off, just over 300 days, but an equally strong mover of prices. In fact, once the general market rally fueled by LTC’s halvening cools off the BTC rally will be ready to begin. When Bitcoin halves its reward will fall to only 6.25 coins and is not the first time to happen. Bitcoin’s price is consolidating around the $11,000 level but may retest the $10,200 region before moving higher. The good news is that indicators are much less bearish, stochastic is weakly bullish, and suggest the next phase of the rally is close at hand. The token needs to cross the $12,000 resistance level, when it does a retest of $14,000 will be next. When that breaks Bitcoin is likely to hit $15,000 very quickly and $20,000 soon after

Cryptocurrency market update: The bear is back

As predicted last week, the bullish momentum was just temporary.

The narrow rally that resumed yesterday following a shallow correction abruptly ended today in the cryptocurrency market, as the major coins suddenly got pushed lower as sellers retook control. The top digital currencies all lost around 10% compared to their recent highs, and most of them violated key support levels while breaking below the rising short-term trendlines as well.

As the recent rally didn’t change the bearish long-term setup in the market, the failed move is not a surprise, but the momentum of the sell-off has been unexpectedly strong in the slightly illiquid weekend environment. Ethereum’s failed breakout above $160 together with Bitcoin’s failed move above the January swing high triggered the plunge from a technical perspective.

The long-term setup still holds, but in the short term, I wouldn’t expect any major movements as the market will either consolidate for the next few days or continue the move downwards, below the 20-day EMA.

Bitcoin

Bitcoin topped its January swing low before the crash, but it remained shy of its December high and the key $4,450 level of resistance despite yesterday’s clean breakout. The failed breakout pattern from the most valuable coin is a negative sign for the whole market, and it was unable to hold at the 50-day EMA level around $4,050.

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While a move towards $4,450 is still possible with the rising weak short-term trendline still intact, the sudden violent sell-off and the still hostile long-term technicals warrant caution here even regarding short-term speculative positions.

Ethereum

The most notable winner of the recent bullish momentum was clearly ETH, topping the key $160 level. Unfortunately, the coin not only moved back below that level, but quickly passed the $145 support/resistance level as well. Much like with BTC, given the momentum of the decline, traders shouldn’t enter new positions here.

The long-term setup remains negative in ETH’s market, and odds continue to favor the continuation of the bear market. Even in the event of a quick recovery, traders should only consider smaller, speculative positions with strict risk management rules just as in recent weeks. The new support level is now near $130.

Ripple

Ripple remains very weak compared to the broader market, and it fell together with its peers today despite missing out on the bulk of the counter-trend rally. XRP crossed the 20-day EMA and is now sitting back on previous monthly lows, around $0.30.

The $0.30 support/resistance level is back at the centre of attention, with a key resistance zone now ahead near $0.32. Traders and investors should stay away from the coin until we see signs of technical strength.

Litecoin

Litecoin has been showing relative weakness in recent days, and although it managed to hit marginal new swing highs, today the coin crashed below the strong $44 level amid the market-wide sell-off. While the coin was leading the way higher during the counter-trend move, the long-term setup remained clearly bearish, and odds still favor the continuation of the bear market.

LTC still trades below its 200-day EMA.

EOS turned lower after touching the target zone near $4.50, and despite the sharp sell-off, it remains above the steeply rising short-term trendline. Although the relatively strong coin found support near $3.50, traders shouldn’t enter new positions here, as today’s bearish momentum together with the negative long-term outlook point to increased downside risks.

Markets Update: Altcoins Gain Against BTC Amid Consolidation – Bitcoin News

The recent bounce in the value of many leading cryptocurrencies relative to fiat currency has comprised the first bullish action in several months. Since bottoming out during the third quarter of 2020, many leading altcoins have made significant bullish moves against BTC.

BTC and BCH Produce Sideways Consolidation

BTC has entered its fourth day of consolidation at approximately $4,000, with bitcoin core currently trading for $3,940 on Bitstamp and $4,040 on Bitfinex. As of this writing, BTC appears to be on the verge of posting its first green monthly candle since July 2020.

BTC/USD – Bitstamp – 1W

Bitcoin core currently has a market capitalization of $69.88 billion and a dominance of 51.9%. Approximately $7.3 billion worth of BTC has changed hands during the last 24 hours.

BCH is currently in its fourth day of consolidation above $140 following Feb. 18’s 15% rally. January is presently poised to comprise the first green monthly candle for BCH since July 2020.

BCH/USD – Kraken – 1W

When measured against BTC, BCH has similarly consolidated for several days at the 0.036 BTC area.

BCH/BTC – Bittrex – 1W

Bitcoin cash is currently the sixth largest crypto asset with a capitalization of nearly $2.55 billion and a dominance of 1.89%. Almost $1.18 billion worth of BCH was traded over the previous 24 hours.

Leading Altcoins Make Significant Gains Over BTC in Recent Months

A number of top altcoins have made considerable strides over BTC in recent months, suggesting that an altcoin season may be quietly underway.

Ethereum currently appears poised to post its second green monthly candle in months against BTC. ETH is currently trading for approximately 0.0376 BTC, up roughly 50% from December’s low of 0.025 BTC.

ETH/BTC – Poloniex – 1W

ETH is currently trading for nearly $150. Ethereum is the second largest crypto asset by capitalization with a market cap of $15.6 billion.

Despite posting a bearish performance during February so far, XRP has generated three green candles since September, with XRP currently trading for 0.000081 BTC, more than 95% higher than last year’s low of 0.000041 BTC.

XRP/BTC – Poloniex – 1W

Currently trading for $0.32, XRP is the third largest cryptocurrency with a capitalization of nearly $13.24 billion.

LTC to Post Fifth Green Candle Against BTC in 6 Months

Litecoin has been among the strongest performing altcoins relative to BTC in recent months, with LTC about to post its fourth consecutive green monthly candle after gaining 36% since the start of February. LTC is currently trading for roughly 0.0124 BTC, up 80% from December’s low of 0.0069.

LTC/BTC – Bitfinex – 1W

Litecoin is trading for $49 and comprises the fifth largest cryptocurrency with a market cap of almost $3 billion.

TRX appears poised to post its first red monthly candle in five months, following a 13.5% drop against BTC since the start of the month. Despite February’s performance, TRX is currently trading for 630 satoshis, up 120% from November’s low of 290 satoshis.

TRX/BTC – Binance – 1W

Tron is trading from $0.025 and comprises the ninth-largest cryptocurrency with a capitalization of $1.67 billion.

ADA is less than a week away from posting its third consecutive green candle, with cardano currently trading for 0.0000116 BTC, up nearly 40% from December’s low of 835 satoshis. Cardano is worth $0.046 and comprises the 11-largest crypto asset with a market cap of $1.19 billion.

ADA/BTC – Bittrex – 1W

How long do you expect the current altcoin season to last? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, Tradingview

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