Last week in the news

During last week Bitcoin has reached new historical highs, at $26.200. Is this going to be the highest level in this year, or we will see some more surprises from BTC until the year end, we are going to see during next week. Anyway, as the year ends, many fund managers and investors are making reflections on this year and preparing strategy for the Y2021. revealing publicly some of their predictions. As Reuters reports, many hedge fund managers and institutional investors are “betting” that BTC will reach levels from $60.000 up to $318.000 during next year. Such assumptions are supported by increased demand for BTC as well as shortages in mining and in supply. Although some of those predictions might be too optimistic, the fact is that there is general increased interest for crypto currencies of institutional investors, business as well as private individuals, and , that there is currently no other asset which can perform better when it comes to increase in value for investors. As this trend will continue for some time in the future, it might lead to further price increase of those assets, especially of major crypto currencies. Up to which levels this increase will go, only the market will decide. In support to increased interest for crypto currencies, there has been very interesting suggestions during last week coming from CEO of MicroStrategy Inc. on Twitter to Elon Musk. He recommended to convert TSLA balance sheet from USD to BTC.  In our opinion, this is very brave and challenging suggestion, the question is only of its feasibility at current moment. However, looking at the future, this note is very important from the perspective of the future of corporate finances, as it might be, its first insight.

On the other side, there was not so nice news for Ripple (XRP) last week. The U.S. Securities and Exchange Commission (SEC) pressed charges against Ripple for conducting unregistered securities offering in a total amount of $1,3 billion. SEC has also named two XRP executives for making nearly $600 million in personal gain from unregistered sales of this crypto currency. On the other side, executives of XRP are refusing such accusations claiming that there was no law in place to regulate crypto market and initial offerings and also expressed their readiness to fight against all charges coming from SEC. Such negative news made an impact on XRP market price to fall by almost 25%. At the same time several currency exchangers and liquidity providers ceased to further trade XRP,  while hedge fund managers are dumping XRP from their portfolios. We hope that this was only an initial market reaction to negative news, and that in the coming weeks everything will end up good for XRP. Nevertheless, the fact is that after several years on the market, crypto currencies are still in the gray zone, when it comes to regulators and tax officials of many countries in the world.  Few weeks ago, at a G7 meeting, regulation of virtual currencies has been widely discussed and urgency on this matter has been concluded by leading world officials. Meanwhile, the US Treasury department is setting new regulations by which banks and virtual currency intermediaries would have to record and report customer identities for some transactions with these currencies.

Exceptionally good news is coming from pharmaceuticals and health governments around the world in the fight of pandemic. As vaccination is starting soon, it provides some confidence that lockdowns will soon be history, and many businesses and jobs around the world will be on the recovery road. With this good news we would like to wish you good health and many green pips in the year to come.

Merry Christmas and Happy New Year to everyone!! Don’t forget to check trading hours at XBTFX Christmas Holiday schedule.

Crypto market cap

We have seen another week with a strong increase in total market capitalization. However, what differs from the previous increase is that this one was led almost solely by BTC. Altcoins were mixed in performance, mostly driven by negative news about XRP, which is facing some accusations from the SEC. As of the week end total market capitalization stood at

685 billion USD, which is $25 billion higher from the previous week. It could be also seen that volumes of trades are still on relatively higher levels on a daily basis. It looks like interest for crypto currencies is not ceasing at all.  

With this latest increase, crypto market capitalization is higher for around 270%, since the beginning of this year, from $185 billion in January up to $685 billion in December.

Source: https://www.tradingview.com/markets/cryptocurrencies/global-charts/


The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies. We can spot some interesting developments during last week. The most evident change in market cap is for XRP which fell for almost 47% in line with above mentioned developments. Unfortunately, one of the most promising altcoins with still the highest circulating supply, lost almost half of its value. Although BTC gained more than 4% in value, BTC Gold lost 16% during the same time. Same with ETH, with decrease of 4%, while ETH Classic lost almost 16%.  Surprisingly, the winner of the week is actually LTH with increase of 12%

Source: https://markets.businessinsider.com/cryptocurrencies


BTC, any reversal soon?

Usually, the last week of December is the most quiet in the markets, but BTC and altcoins are obviously not following this yearly pattern. One of the reasons might be found in decentralization of crypto currencies trading, as these currencies are not dependent on working hours of financial institutions, while the other might be positioning of investors on expectations of future price developments.

Week after week BTC is reaching new highs in December. Close for this week is at price of $26.500, by the time of writing these lines, and new highest level. Fundamental analysis behind these movements has been previously discussed, so let’s see shortly what technical analysis is suggesting about potential movements in a near future.

At the beginning of the previous week, the price of BTC was struggling for a short time around the level of $22.300, but without market strength to break it. As of the weekend, the price went to the opposite side, reaching a new highest level of $26.500. It is quite interesting that RSI is showing clear signs of an overbought market for some time now, but we still don't see it reflected in the price. One of the reasons might be negative news on XRP during last week and transfer of funds invested in XRP to BTC. Anyway, in case of potential short term reversal during next week price might reach short term support levels at $22.300 and $19.500, or psychological barrier at $20.000. On the opposite side, only new highs would be ahead for BTC. Still, as BTC was full of surprises during this whole year, we are looking forward to see what is ahead until the year ends.


Ethereum lagging behind BTC

ETH is continuing to lag behind BTC, but it is still following the price path and recently started to accelerate early in this week. After a modest and short term price correction at the beginning of week, reaching a level of $560, price reverted on the next day, reaching $650 as of the weekend. As the price pattern for ETH entered into the short term channel, moving on the up side during next week, might push the price of ETH to levels near $680. Next long term resistance is at level of $800. On the opposite side, support level might be found around levels of $600 or down to $535. Anyway, indicators are not suggesting that ETH reached its overbought side.

Litecoin the winner of the week?

When it comes to market capitalization for the last week LTC is the absolute winner, with increased cap by around 12%. By looking at the price since the beginning of this year, LTC had drawn much of the investors interest. During last week LTC reached its new highest price in December of $133, but soon the price reverted to down side. LTC is finishing this week at levels of around $130.  If price continues in this direction, long term support level can be found at level of $120, down to short term support at $110 and $100, which might be tested somewhere in the future. On the opposite side, the next long term resistance level is at $170.


What’s in store for altcoins


Last week was marked with news regarding SEC charges against XRP executives and unregistered public offerings. This influenced a drop in XRP price of almost 50% and halted in trading on several exchanges along with decreased interest from investors. What is ahead for XRP is about to be seen in the weeks to come. As of the weekend XRP is trading at levels of $0.29.

It seems that developments around XRP had some influence over confidence in altcoins with smaller capitalization but initially good prospects.  During last week NEO significantly lost investors confidence by trading from $18 at the beginning of the week, down to $14 as of the weekend. Cardano (ADA) was trading from $0.16 down to $0.12, but eventually managed to recover until the weekend to starting levels of $0.16.

Some of altcoins who performed well during last week were Monero (XMR) with an increase to $166, from $146, Theta with price increase from $0.86 up to $1.6, which almost doubled its price within a week. Almost the same performance had Zilliqa (ZIL) moving from $0.044 up to $0.092. VeChain (VET) is also one altcoin worth putting in the winners of the week club, with price increase from $0.011 up to $0.017, as well as few other coins with small market cap but, interesting prospectus for future developments and earnings.

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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