Pavel Shchipanov, head of the ICBF analysis and research group, shared with DeCenter readers his opinion on the situation with the prices of BTC, ETH, and XRP based on technical analysis and news background data.
The crypto market is becoming more attractive to large capital, although the charts show a continued decline in rates of Bitcoin and altcoins. At the same time, the news background is becoming more and more friendly for those who see on the charts some opportunities for a price reversal in the near future. Let's look at the latest news articles and how they affect the future behavior of prices.
One of these pieces of news was the readiness of the DX.Exchange crypto exchange to start trading on July 27, not only with traditional BTC and ETH but also with Ripple’s XRP coin and another 20 altcoins. But this is not just another exchange. It is an exchange built entirely on the technological basis of one of the largest exchanges with a global name, and that is Nasdaq. One of the most interesting differences from other crypto sites is the ability to deposit funds and withdraw them in fiat currencies without having to convert them into other cryptocurrencies first. Also, commissions are not charged, as the exchange will simply take 10 euros from each user at the end of the month. Representatives of investment funds and banks will be attracted, rather, by the ongoing negotiations of the exchange with the SEC regulator regarding obtaining state licensing in the U.S.
And the news of the last days, which is also able to interest the whales of the crypto market and the whole community, is the emergence of ETF funds for Bitcoin and other cryptocurrencies. Since this concept is not often discussed in unprofessional literature, let us briefly consider what it is and why it is important for investors. Exchange Traded Funds, or ETFs, are traded on the exchange of the traditional stock market, and this kind of analog of the investment portfolio includes shares from a certain index or companies selected in a certain way. This removes the need to buy shares of all 500 companies if we are talking about the S&P 500 index and allows you to earn on the growth of the entire market without having to carefully monitor the charts and news for each company separately. Moreover, not only the owners of large capital but also ordinary investors can make a profit in this way.
The consideration of the issue of launching state-regulated ETFs for cryptocurrency (the draft up for discussion is presented under this link) by the U.S. SEC regulator slated for August 10 could mean the acquisition of coins for billions of dollars created not only by ETFs but by other investors who want to take advantage of a possible sharp increase of rates in case of a positive decision. While it is not possible to say with 100 percent certainty which crypto assets will be included in it, it is possible to assume that such top-end coins as Bitcoin, Ether, XRP, Litecoin, and others will certainly be included. If the forecast is realized, then we will see a similar picture compared with the "rally" in November and December of 2017. On the chart below, it can be noted that during this time, Bitcoin rates climbed 270 percent, which was likely due to expectations of the launch of Bitcoin futures on the CBOE exchange. Of course, one should not expect growth at 90 degrees, but instead, a more gentle process can begin.
But it is necessary to warn traders in the market against excessively ambitious plans. After all, "smart money" can ignore the approach of this event and simply create a new trap for the bulls, and from these levels, start the development of another wave of decline. Therefore, in this review, the possible options for the movement of rates in both directions relative to current values with the designation of immediate targets will be presented. And in the case of the implementation of one of the scenarios, it is worthwhile to open new transactions.
Traditionally, we will pay tribute to the very first cryptocurrency (and Satoshi Nakamoto, who is probably trying to leave the anonymity of the shadows) and drive it to the deserved first place in our rating of the most interesting assets. As part of the expectations of the experts, the decrease of the rate of Bitcoin continues, although it did not manage to break under support at the minimum values of the current year in the region of $5,882 to $6,020. And this round was left for the bulls, who increased rates to $6,800, but they could not stay there and fluctuate within these boundaries from the beginning of July.
The closing of the week will set traders in the mood for making trades. Earlier, we already noted the possibility of making a profit on the condition of the decline, and for the current rates, one of the first targets is $5,882 to $6,020. If we overcome them, you can open new "shorts" with the potential to collapse to levels of $5,500 and $5,300 (23.6 percent correction on the Fibonacci line from the maximum value in December). If the prevalence of positive news will have a similar impact on the mood of most investors, then if several day candles are closed above $6,800, we should expect the likely completion of a technical analysis model in the form of the "inverse head and shoulders" and the long-awaited growth "to the moon" with the first targets for $7,000 to $7,260, and $7,750 to $8,000.
Symmetric movement with Bitcoin is taking place with the brainchild of our compatriot Vitalik Buterin. Ether has confidently developed a decrease from the area of the newly-tested resistance at $487 (23 percent Fibonacci retracement), and the nearest targets remain support at $340, which is followed by an 11.4 percent Fibonacci retracement at $360, with the next nearest target being $415. But you need to keep in mind the second possible scenario. So, on the graph, we can note the retest of the upper boundary of the "descending wedge" model (the boundaries are indicated by brown lines). If the positive news about the launch of the "second phase of the project" (so far only the expansion of the use of blockchain has been announced at the conference in Hong Kong, but the details are kept secret) will have an impact on investors, then the rates will start to unfold, and if it goes above $487, then we can expect levels of $520, $530, and $570.
XRP Is the Shadowy Leader and Competitor of Bitcoin
It is no coincidence that we are covering this coin because in recent months there has been more and more news about Ripple's willingness to use payments. Take at least the June news about the plans to use this cryptocurrency in the banking system of India, which was a pleasant surprise for XRP holders, because the country with a billion population that has recently transitioned to a digital form of payments will be ready to consider other alternatives with the lowest transfer fees. Also in the news is that the company appointed a Vice President of Business Development and Corporate Development, Kahina Van Dyke, who previously headed the finance department at Facebook. She, together with the updated team of PR, banking, and cryptographic specialists, will strengthen the project. All this may soon have a positive impact on investor sentiment, which will make it possible for XRP to take the second place in terms of capitalization.
From the point of view of the technical analysis of XRP, we note the formation of a consolidation of the price between the values of $0.41 and $0.50. The closing of rates above the last will lead to a confident development of the upward movement with the potential to reach $0.60 and $0.70, and also in the long term, it is expected to test $0.84. But it will be necessary to see similar growth in other leading cryptocurrencies to this end, that is, in simple terms, the market should "turn green.” But we are also considering the option in line with the continuation of the collapse of the crypto market. The decrease of the value of $0.40 will lead to the preservation of the offensive movement of the bears with the potential of withdrawal to $0.34 and $0.28.
Summing up, it is necessary to note the importance of the cryptocurrencies included in the top three. They need to be added to portfolios over time in the long term. The questions that should be asked to all experts is when exactly is it worth investing in these assets and how much of a portfolio this trio should take up. This is a question that will be argued in one of the following reviews.