In a weekly analysis article, Pavel Schipanov, head of the ICBF analysis and research group, shared the latest news of the crypto world with DeCenter readers and talked about where the main cryptocurrency rates are headed.
This week has brought coolness to overheated cryptographic markets, frozen in anticipation of a change in cryptocurrency prices. Already in the first hours of Monday, brisk trading began, and the volume of transactions conducted significantly increased. Rumors about the allegedly upcoming delisting by the Binance exchange of Tether, the largest stablecoin by capitalization (and this information was spread on the forums and on the Telegram messenger with the help of a skillfully forged picture from the supposedly official Binance forum) were the reason for such a stir, and after a while, the possibility of entering and withdrawing funds in Tether on the Bitfinex exchange (number seven by the volume of trading in the CoinMarketCap rating).
It is worth noting that the crypto community rightly believed this misinformation, because last week, the real danger was discussed that Bitfinex and its affiliated stablecoin Tether would be left without banking services because Noble Bank started experiencing difficulties and searching for new sources of funding. To make it clearer, a credit institution was on the verge of collapse without additional external injections. Therefore, Bitfinex management decided to transfer their funds and customer money to another financial institution. A little later, the trading platform itself announced that it had stopped receiving and withdrawing funds in fiat currencies, such as the U.S. dollar, euro, yen, and pounds sterling.
But this week, these concerns were completely dispelled. The funds of the Bitfinex exchange can now be safely withdrawn from deposits because they are placed in the Hong Kong Bank of Communications, owned by one of the largest financial conglomerates in the world, the HSBC. Tether, the eighth cryptocurrency by capitalization, will in turn be located in the Bahamian credit institution Deltec Bank. This news has returned calm to the market, and on the charts one can observe the continuation of a stable movement, but it is very deceptive, like the traditional calm before the storm.
Additionally, I would like to note that the crypto market itself has already ceased to be a haven for people keen on innovative ideas, and with each quarter, there are more and more interesting projects in the field of blockchain and cryptocurrencies. It is possible to note an increase of 41 percent in the volume of transactions with futures contracts for Bitcoin on the CME exchange based on the results of the third quarter of 2018 when compared with the previous reporting period, while the open interest (that is, the number of potentially possible contracts concluded in the future) increased compared to from the second quarter to 19 percent up to 2,873 contracts. It is important that not only Americans actively speculate with this tool, as 21 percent of the transactions made are by residents of Asian countries.
But you do not need to be overly optimistic, but rather look at the latest report from the portal ICObench. The “winter stagnation” is still on in the ICO primary fundraising market. The number of events held was stable at 155, as in August. But the amount of funds collected for the month in August fell by almost 1.9 times to $382 million, as well as the average value of fees decreased to $6.1 million, although for the same period in 2017 it was $16.3 million.
But this news may be secondary to the really important ones, such as the upcoming decision of the SEC on the possibility of launching the first ETF based on Bitcoin. The community positively assesses the effect of Bitcoin's weak volatility on the prospects for adoption, but such sharp bursts put this decision on the verge of a new collapse, which would entail another collapse. Up until October 26, the process of collecting opinions on the prospects for creating ETF based on futures contracts is underway. Nine applications can be accepted either cumulatively or partially, for example, only the most promising: an application from the Gemini exchange and a combined VanEck SolidX Bitcoin Trust ETF application. Given these opinions, SEC commissioners can decide on November 5, or traditionally “unexpectedly” surprise the market with a postponement. Therefore, now one of the best trading strategies in terms of fundamental analysis is to stay out of the market. We now turn to the technical review of the situation in the crypto market.
On the graph below from the Coinbase Exchange, we note an attempt of growing rates to a powerful resistance of $6,800, but this level survived the onslaught of the bulls, and there was a rollback below the resistance of $6,555 to $6,600, where the price is at now. We can note the willingness of traders to buy Bitcoin and altcoins at the earliest opportunity, as well as the readiness for strong growth in the coming months. But, most likely, it will not start today, therefore, we maintain our development guidelines for a decline to the previously noted level of support for October of $6,300 and further to $6,200. A breakthrough below the latter opens the way for sellers to levels of $6,111, $6,000, and the minimum of October 2017 and June of the current year in the region of $5,882.
The reason for the opening of short term positions for the purchase will be the departure above $6,600 with the potential to achieve the first goals for the growing movement of $6,700 and $6,780. Further, we should expect a move to the marks of $7,000, $7,200, and $7,250.
The chart below reflects the current situation for Bitcoin paired with Tether, and the chart above shows it against the dollar, so you can notice a difference of almost $300. In any case, the previously identified long term goals in the form of $7,200, where the 200-day simple moving average now passes, as well as consolidation of $7,375 to $7,500 and $7,800 for growth remain relevant. Although, most likely, this movement will precede the collapse of rates in the coming weeks to $5,455 and the above consolidation of $5,780 to $6,011.
Ether and Other Altcoins
Altcoins this week showed volatility, but so far not enough to get out of the outset state. Ether remains in the boundaries between the support in the form of a cluster of $193 to $200 and a resistance of $230. The most preferable is the option with a reduction to important support of $144, $131, and it is also possible to achieve $100. But on condition of breaking through the $251 daily candle, it would be rational to open positions for the purchase of the second largest cryptocurrency with $300, $341 and $400 levels, above which the 200-day simple moving average line is located.
And at the end of a not-so-optimistic review, you need to add great news for the first time, as a music festival will take place supported by blockchain and cryptocurrencies. The Our Music Festival (OMF) released tokens with the same name based on Ethereum technology: rap artists, vocal duets, and DJ sets are expected. During the festival in California, it will be possible to purchase related products for cryptocurrencies. In the same U.S. state, by the way, you can now buy property with the help of a Bitcoin processor BitPay. Fiat funds are converted into cryptocurrencies and placed into an escrow account until the keys are handed over to the owner.
The cryptocurrency sector is developing, and there are still a lot of great news ahead.
Profitable trades for you all!