This article provides a short overview of current major developments in the crypto world. We are looking at major events during last week and focus on what to watch for this week. This includes short technical analysis of major crypto currencies and some insights on other altcoins prospectus.
Last week in the news
The story about regulation of crypto currencies is still one of the hot topics for many world governments and central bankers. At a meeting held last week of Group of Seven (G7) world’s most developed countries, it has again stressed the importance and need for regulation of crypto currencies. As Reuters reported, major concerns of government officials are related to fear from
losing “currency monopoly”. In this sense, it is also unclear if Facebook`s Diem (ex Libra) will be able to enter the EU market in the near future period.
Regardless of the opinion of regulators, businesses and individuals continue to show strong interest in crypto currencies. During this year, which was specific in many ways, crypto currencies have outperformed the majority of other asset classes. Total amount of managed assets has increased, by some estimates, from $ 2 billion up to $15 billion from the beginning of this year. Financial sector is getting more and more involved in the crypto industry as they have recognized it as one of major competitors and a sort of threat for future market share. The Standard Chartered bank, a largest bank in the UK, is preparing to launch custody service for major crypto currencies, like Bitcoin next year, while Visa is currently working on credit cards which would reward card holders with Bitcoins after every purchase. One of the leading banks in Singapore, DBS, has confirmed to start operations with major crypto currencies including trading. Strong interest of investors is also expressed in the new highest price of BTC of nearly $20.000 at the beginning of December. As BTC drives the coin market, this move was reflected in increased price of many other altcoins, and overall market capitalization. Many investors, both individual and institutional, are convinced that the price of both BTC and altcoins could go even higher during next year. However, what is currently certain is that we will keep close watch on these assets. There are still uncertainties about future political and economic developments in the world which are putting obstacles on clear view about future prospects for investments. One of these are US elections, which are to be resolved in January next year, hopefully.
Crypto market cap
During last week we have seen further easing in total crypto market capitalization and volume. This is in line with the volatility of Bitcoin price, which is the leading currency in many aspects when it comes to the crypto market. BTC capitalization is more than 5 times higher from secondly ranked Ethereum. There is also an evident slowdown in volume of trades, but still at levels where it could be noted high trading interest.
It would be interesting to note that since the beginning of this year, crypto market capitalization has been increased by more than 300%, from $185 billion in January up to $580 billion in November.
Image: Crypto market capitalization and volume
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies. Although BTC leads in price and market cap, the leading place when it comes to supply belongs to Ripple.
Bitcoin price correction?
Clear break of long term resistance level at $12.500 from beginning of November, indicated market push of BTC to historical level of nearly $20.000 at the beginning of December. Overbought levels had been reached, which could be clearly seen on charts, and many analysts and investors are in agreement that some price correction is ahead for this currency. Considering that this is only second time in a history of BTC that price had reached these highs, it is questionable if analysts could rely on a historical short term support and resistance lines to spot end of reversal, or this time we might see some new short term levels for BTC, somewhere between levels of $20.000 and $12.500. Opinions of investors are separated considering this topic. On one side, there are investors noting a forthcoming strong rally on BTC, arguing that price could be back on levels before the latest up trend. On the other side, there are more optimistic ones with the opinion that BTC price will inevitably go higher from current levels in the near to mid-term. The truth might be somewhere in between. Price reversal, long or short, is clearly indicated in charts. However, year end is the time of Holidays in the western world, but it is also time of dividend payouts. Considering current returns in other assets, whether some of dividends will end in BTC or other cryptos, we are going to see probably in the first quarter of the next year. As weekend and Mondays trading comes to a close, BTC has rallied to the upper end of the range to $19,400 put pressure on the 20k level at the start of the week
Ethereum follows BTC, but not this time
Ethereum had always been faithful follower of BTC price movements, but it doesn’t seem like it this time. Historical high for ETH was in January 2018 at the level of $1.400 and since the “great fall”, this currency is trading with moderate volatility. However, since July this year, ETH was again in the spotlight of investors, pushing the currency price on the up side. Strong historical resistance level at $350 was finally broken after the second attempt during October, which pushed currency to short term resistance at $600. Some analysts are suggesting the level of $450 that ETH will reach in this short term reversal. Chart suggests that this possibility exists, but there is certainly no clear indication at this moment that ETH reached its overbought side. It looks more like there is a hidden potential in the short to mid-term period of time. Are we going to see ETH`s final break free from BTC`s shadow? If there ever was a right time, this could be the one.
Is the correction over for Ripple?
Ripple is one of rare crypto currencies which was initially perceived by investors as the most promising one, but historical performance put many investors in doubt if their initial perceptions were correct. Currency with unique decentralization showed actually the most stability during last year. For long term investors this was not an issue, but for short term traders, this certainly was not too profitable currency. Historical high of $3.30 is not even close to be reached again. But since the end of November this year, investors decided to give this currency a new chance as price peaked to $0.76. Last time when Ripple was at this level was in September 2019. For almost a month, XRP has struggled to break historical support level at $0.5, without much success. This imposes a question if the trend is still not over or maybe we are going to see XRP`s volatility in the near term moving between $0.5 and $0.7? Investors are divided in opinion and clear picture on the future price move, but certainly there are much more those who see some increase in price. Still, it should not be overlooked that XRP holds third place in market capitalization with the highest supply in circulation.
What’s in store for altcoins
Altcoin market was another gainer of BTC price increase. Litecoin is certainly one of the coins getting attention from investors. In the latest move, it has managed to double its price in a very short period of time, reaching $92 at its peak. Certainly one of the coins that deserves attention is NEO which is treated as the main competitor to Ethereum. Price of this coin has increased from $5 in April to $25 in September this year. Gain of 500% in six months could be treated as an excellent score for one altcoin. Currently this currency is traded at level of $15. Another coin which belongs to a club of significant gainers is Cardano (ADA). In the latest move price was increased from $0.08 up to $0.17, which is a gain of 100% for a month. Looking back at last week, biggest gainers and losers are following:
Disclaimer: This article provides exclusive views of the author. It does not in any sense represent a suggestion for trading.
This Market Analysis has been published by a staff writer at XBTFX .
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