Except for the rare cases of sharp price movements, from June of this year to the present, cryptocurrency rates remained within a very wide range of $5,800 to $7,800, and in narrower ranges of $6,000 to $6,670 in recent weeks. The last consolidation is associated with the unwillingness of large-scale traders to enter positions on the eve of the fateful SEC session. Indeed, it is at a meeting of the commissioners of the U.S. financial regulator that the decision on the bid for trading ETFs based on Bitcoin will be finally adopted or rejected. VanEck SolidX Bitcoin Trust ETF has the greatest chance of being favored by the commission, and, if successful, a number of applications can be approved along with it. On Thursday, September 20, 10 days before the fateful meeting, there was an unexpected message about the SEC's desire to once again postpone the decision on the ETF for an indefinite period. The commission again needs to get more information to make a verdict. Therefore, we can assume that in the event that the necessary information is not received, by September 30, the market will be completely confused. It should be noted that now, the next date for consideration of the matter can be postponed until April 2019.
There are several factors that are stopping most of the meeting participants from approving a new financial instrument, and that is the low liquidity of instruments and high volatility. That is why in August, the Securities and Exchange Commission made a cunning maneuver with the refusal and recall of this decision the next day or, in simple words, simply postponed the decision to September 30. If the application is not approved on September 30, the crypto market will go in search of a new "bottom," like miners in a deep diamond mine. Two factors justify this assumption. First, the SEC itself recently banned the turnover of exchange-traded notes (ETNs) for Bitcoins and Ether, which are similar to ETF instruments on the Nasdaq exchange. Secondly, a very unpleasant signal came from the New York office of the Attorney General. In the report presented by experts, the risk of price manipulation at crypto exchanges was noted. But it is this danger that the exchanges should protect ordinary investors from, those who are ready to invest in crypto assets with the help of ETF. It can be noted that the report compiled on the basis of the results of voluntary inquiries came with an "unpleasant aftertaste," because this case was initiated back in April by New York City Attorney Eric Schneiderman, who was fired for rough treatment of four mistresses. Therefore, the question remains as to how this report will be accepted by the participants of the meeting on September 30.
A positive scenario with the approval of at least one of the applications for the creation of the ETF will most likely immediately lead to a "flight" of the price to the top or to the preservation of further intrigue to a full outcome of the events no worse than in the detectives of Agatha Christie or Arthur Conan Doyle. After all, in the future, the financial instrument being created will attract billions of dollars to the crypto market. And the inflow of liquidity will naturally lead to accelerated growth of the cost of Bitcoin, Ether, and many other crypto assets that can survive this crisis. By the way, the current situation can be compared with the dotcom crisis of the beginning of the 2000s, when many startups and technology companies were heading down. Does it seem that history is repeating itself?
In the graph above, it can be noted that even after the fall in the 2000s, the value of the shares in the following years has continued to grow. And this week, other U.S. indices, Dow Jones Industrial 30 and the S&P 500 have again set record highs. Therefore, one can say with absolute certainty that in the future cryptocurrencies will also repeat these dynamics and show solid growth. It will not be like the take-off of a rocket that was observed in November to December 2017, rather, this movement will be more like a moderate rise. The latest estimates of experts of the American bank Goldman Sachs, the top in terms of the assets under its management, may speak in favor of a flow of funds into the cryptocurrencies as a protective anti recessionary asset in the next three years. They expect that the new financial crisis may begin in developing countries such as China, Russia, and others, which will lead to demand for the most reliable means of preserving their capital, for example, gold and government bonds, but now this list will also be augmented by crypto assets. This year will enter the history of the crypto market as one of the most dangerous when many enthusiasts who came in 2017 were disappointed in it because of the almost 70 percent drop from the region of $20,000. But, maybe, the market is close to the end of its correction. One of the crypto enthusiasts and the manager of the cryptocurrency hedge fund Michael Novogratz announced the achievement of the price bottom on the crypto market.
If we talk about forecasts and estimates of price movements, then in the short term, a very large number of Bitcoins can immediately arrive on the market. In particular, one of the former traders passing the procedure of bankruptcy and civil rehabilitation in the Japanese court of the Mt.Gox crypto exchange Kim Nilsson expressed fears that in the near future a new wave of sales of Bitcoins and Bitcoin Cash may begin in order to repay debts to investors. More recently, the arbitration manager of Mt.Gox Nobuaki Kobayashi sold more than $1 million worth of the cryptocurrency of the bankrupt exchange at once, and this led to a collapse in rates by several percents. A similar story with a sudden collapse may begin in the United States, where the California court authorized the seizure of the crypto assets of the recently closed darknet exchange AlphaBay worth more than $9 million in cryptocurrencies. Imagine the moment of simultaneous sale of these assets. It is best not to be on the way of this "deluge."
Thus, too many external factors give conflicting signals to the market. Let us look at the charts, as they contain more clear signals.
Bitcoin has decreased over the last few months to the levels of $6,000 and $6,200. By estimating the short-term outlook, we can expect a short-term correction to the top, when the danger of the ban of cryptocurrency ETFs will decrease. This could be a positive impulse, and the rates will have the potential to rush to the top to important resistance at $6,670, $6,820, and $7,000. A break above will be met at a significant level of $7,375 to $7,500, in the area of which the 200-day simple moving average (MA) line is currently undergoing. Its overcoming now seems an unlikely event.
It can be noted that the price remains prone to decline on the daily chart globally. But a new collapse cannot happen with such a large volume of short positions, so the whales will try to first increase the volume of long positions and lure into them more ordinary investors. But the result of this game can be a very hard collapse of rates. They can rush down to the most important support at $6,200 from the area of $7,000. Its breakthrough down will give an opportunity to rejoice at the first profit when reaching the support area of $5,776 to $5,880. The next support in the path of Bitcoin will be the values of $5,600, $5,280, $5,000, and $4,741 to $4,800.
Only an exit above the cluster levels of $7375, $7500, and $7800 can change the trend. Overcoming these resistances will allow us to open positions for purchase with the potential for leaving to $8,000 to $8,200 and levels $8,500, $8,900, and $10,000.
Ether and Other Altcoins
The market of altcoins mostly maintains a downward trend in the long-term, but can take advantage of this "hope glimmering on the horizon" in the form of a possible delay in the decision on crypto ETF for an indefinite period. Ether can demonstrate a rush upward from the traditional "wedge" bear formation. A rise above $220 will open the way to levels $251, $270, and $300. But will this movement last? Most likely, the second cryptocurrency by capitalization will rush from these values down to support at $180 and a cluster of $193 to $200. Under the condition of overcoming them, the rates will fall into the area of $160, $131, and $100.
Let us note one more crypto asset, which has the potential for powerful growth in the medium term. And that is the Ripple coin. One of the reasons for active purchases is the willingness to launch the long-awaited xRapid payment system, which 120 top banks and financial institutions from the U.S., Japan, and a number of other countries are ready to join. Since August, rates have been squeezed within the consolidation between 0.000040 and 0.000055. During the upcoming weeks, we can expect growth to the values of 0.000062 and 0.000070 (here the 200-day moving average line passes), 0.000080 and 0.000088 (38.2 percent correction according to Fibonacci levels).
Keep sobriety of consciousness and think several times before opening new positions in the market. Profitable transactions for you all!