Market Commentary


Bitcoin had a relatively volatile period and somehow stabilized for a few days. That apathetic behavior will quickly develop into another turmoil of prices if history does repeat itself. In the present state, there’s a slightly bullish conjecture on Bitcoin evolution of prices but, as always, with some dangers ahead in the road. First, the resistance levels look solid and bears still have a role to take part in the whole play. Second, momentum is positive, but with volume rapidly slowing down, we might reach its exhaustion stage quicker than expected. For us, the reward ratio of entering right now in the market isn’t clear to be as profitable as promising.

Bitcoin dominance stabilized and is currently exactly the same value as in the previous weekend: 52.3%. On the other hand, the week was positive for the majority of the altcoins – and for Bitcoin itself, obviously – and, as a consequence, global market capitalization increased from $216 Bn to $237 Bn. Still very far from the figures by the beginning of 2018 but still, a significant recovery and a steady drifting away from the $200 Bn mark.


Latest News


 

The Federal Financial Monitoring Service of Russia (Rosfinmonitoring) has commissioned an analytical tool for monitoring cryptocurrency transactions. The system will particularly focus on bitcoin, as reported by BBC’s Russian service. Rosfinmonitoring, whose responsibilities include countering financial fraud and terrorist financing, already use a bespoke Unified Information System. This allows for the input of disparate information about suspects in financial crimes, in order to find connections between them.

Japan’s National Police Agency to Employ New Software to Track Crypto Transactions. In response to a reported increase in the illicit use of cryptocurrencies, Japan’s National Police Agency (NPA) plans to introduce new software which can track cryptocurrency transaction history, Japan’s national public broadcasting organization NHK reported August 30. In 2019, the National Police Agency will reportedly put special software into service to track the history of virtual currency transactions within the country.

The European Union (EU) is reportedly gearing up for a fresh round of talks concerning cryptocurrency regulation. This move comes after the EU parliament in July advised the EU not to ban cryptocurrencies. According to Bloomberg, finance ministers from EU member nations plan to meet in September to discuss the region’s cryptocurrency market. Top on the agenda for the EU in this fresh round of talks about the virtual currency market is the need for stricter regulations.

Brazil’s Government Sends Local Cryptocurrency Exchanges a Questionnaire. The Brazilian government has reportedly sent the country’s top cryptocurrency exchanges an inquiry in an attempt to know more about their businesses and study their potential use in money laundering. According to a report from local news outlet Portal do Bitcoin, the government has been sending the crypto exchanges a 14-point questionnaire through their contact forms for the last two weeks. The document is reportedly being sent under the Ministry of Finance’s name.

OECD Announces ‘First Major International Conference’ Dedicated to Blockchain in Public Sphere. The Organisation for Economic Co-operation and Development (OECD) has officially announced a Blockchain Policy Forum in a release on the OECD website August 28. The OECD states that the event will be held in Paris September 4-5 and will mark the first major international event of its kind. Organizers plan to focus on the use of blockchain tech in government activities and public initiatives as well as regulatory aspects. Also plans to discussing the technology’s potential global economic impact, privacy and cybersecurity, inclusiveness, the promotion of green growth and sustainability, and governance and enforcement practices.

Firms in Singapore and China to Benefit from Blockchain Innovation Fund. Chinese and Singaporean companies operating within the fields of ICT and media have received a boost with the launch of a new fund to support collaborations among them. The China-Singapore ICM Joint Innovation Development Fund covers technologies such as blockchain, Internet of Things (IoT), artificial intelligence, augmented reality and robotics. The CCI represents a key part of the cooperation strategy to facilitate seamless transportation of goods between China and Southeast Asia via Singapore.

Venezuelan President Maduro Orders Banks to Adopt Crypto ‘Petro’. The president of Venezuela, Nicolas Maduro, has reportedly ordered banks in the South American country to adopt the oil-backed state cryptocurrency, the petro, as a unit of account, according to Agence France-Presse. Financial institutions in the country will now be required to ensure that their financial information is reflected in the petro cryptocurrency besides the bolivar, the country’s fiat currency.

India is Exploring a Central Bank Digital Currency for Payments. The Reserve Bank of India (RBI) joins a growing list of global counterparts in exploring a central bank digital currency (CBDC) that would constitute the digital equivalent of the Indian rupee. The RBI has established an inter-departmental group to explore the demand and plausibility of a blockchain-based digital currency to be used in domestic payments, the central bank said in its Annual Report 2017-18 [PDF] released on Wednesday.

Poland Introduces New Bill to Clarify Crypto Taxation. Polish legislators have introduced a long-awaited new bill to clarify the current crypto taxation policy. The document was published on the country’s government site on Friday, August 24, and explained by local crypto media outlet Kryptowaluty August 25. Kryptowaluty writes that a new document has been offered for consultation, and the Polish Council of Ministers will review it in the third quarter of 2018.

Binance Profits Rival Nasdaq But With Only 4% of the Staff. A comparison uploaded to Twitter by Danhua Capital managing Director Dovey Wan August 30 shows that for that period, Binance pulled in $200 million against Nasdaq’s $209 million. The figure represents one of several linked to Binance’s rapid growth to circulate among the online community, Wan also noting the exchange beat Deutsche Bank’s Q1 profits by almost $50 million.

 


Crypto Weekly Charts


Total Market Capitalization

Top 20 by Market Cap

Bitcoin Volume / Exchange

Top 20 by Volume – 1d, 7d, 30d

Percentage of Total Market Capitalization – Dominance

 


Bitcoin Market Overview & Forecast


The week started, as forecasted in our previous report, in a very optimistic way. Bitcoin easily surpassed the $6,800 resistance on Monday and, by Tuesday, was already negotiating above the $7,000 mark. After a couple of days correcting that ascension of prices – even dipping back towards the $6,800 mark, the trend was to make an approximation to the $7,200 mark, and it’s by that zone that BTC/USD is placing itself today.

Highlight to the DASH (DASH) performance, with a weekly appreciation of over 52%, and for IOTA (MIOTA) and Monero (XMR) all with gains above the 30%. Given the “massacre” that they were target of on the previous weeks, there’s some consolation in this week’s performance, which may augur also an outstanding positive performance for the remaining ones in the near future.

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Market Overview

The Week in Numbers

During the week, Bitcoin markets traded in the range $6,600-$7,200. Despite its price being rigidly enclosed in that trading channel, the overall evolution during the week was to make a shy, but consistent, approximation to the upper bound of that range. As we write this report, BTC/USD has already ripped through it but is now trading at $7,170.3.

The week started, as forecasted in our previous report, in a very optimistic way. Bitcoin easily surpassed the $6,800 resistance on Monday and, by Tuesday, was already negotiating above the $7,000 mark. After a couple of days correcting that ascension of prices – even dipping back towards the $6,800 mark, the trend was to make an approximation to the $7,200 mark, and it’s by that zone that BTC/USD is placing itself today.

During the week, through all the media, blogs and opinion articles that we keep a close watch, there was always a positive projection of prices for Bitcoin. It appears to us, that a positive sentiment is growing back again in the mindset of the investors – which typically signifies in the crypto ecosystem to aim for astonishing amounts of profit in a very short period of time. We don’t share that enthusiasm and refrain our expectations a bit, but overall we do agree that market is currently placing itself in a good conjecture, and we may have an opportunity for Bitcoin to recover some of this current year losses.

Market Capitalization and Dominance

Bitcoin dominance stabilized and is currently exactly the same value as in the previous weekend: 52.3%. On the other hand, the week was positive for the majority of the altcoins – and for Bitcoin itself, obviously – and, as a consequence, global market capitalization increased from $216 Bn to $237 Bn. Still very far from the figures by the beginning of 2018 but still, a significant recovery and a steady drifting away from the $200 Bn mark.

Best and Worst Weekly Performers

Our weekly chart of the altcoins with capitalization above $1 Bn USD highly contrasts with the red panorama of the previous week [NDR: also, there was a glitch in the previous report, and figures displayed there were referring the to the beginning of the year – our apologies for that]. BTC with 6.45% set the pace, and all other major altcoins followed the lead.

Highlight to the DASH (DASH) performance, with a weekly appreciation of over 52%, and for IOTA (MIOTA) and Monero (XMR) all with gains above the 30%. Given the “massacre” that they were target of on the previous weeks, there’s some consolation in this week’s performance, which may augur also an outstanding positive performance for the remaining ones in the near future.
Regarding our weekly top which monitors coins that have a capitalization of over $1 Bn USD, we have now new additions when comparing to last week’s list. NEM and VeChain just surpassed that mark and joined this exclusive list, giving a much more diversification and bulk number to the ranking.

Market Forecast

Volatility, consolidation, volatility. Bitcoin behavior in the most recent past can be characterized in such a short and repetitive sentence. But, experience in the market, tell us that these waves are much more frequent than random behavior. Last week, we have written that bitcoin was narrowing its trading range, stabilizing its indicators, and once again we weren’t far from what actually happened. BTC/USD kept the trading channel $6,600-$7,200 immaculate during the whole week and only now it’s making a further attempt on piercing that limits.

When price stabilizes and a bunch of positive news enters the market, the whole hype and hysteria return easily to the market. That psychological factor is still very important, and much of the times overlap the most rigid and objective reading that we withdraw from the charts. It’s pretty hard to escape the surfing waves when all surfers are on it. After a few weeks of FUD, the consolidation stage gave rise to FOMO and, with naturality, prices once again started to climb up the charts. So, our first sentence on this analysis could be easily transferred to the crypto jargon: FUD, FOMO, FUD… It appears to be also cyclic and with the current figures and participants’ behavior, it will still be hard to escape if in the upcoming months. It’s still a very young and immature market, and despite some signs of growing up, the irreverence appears to be an idiosyncratic facet that we need to live with.

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Bitcoin Technical Analysis & Trade Ideas


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Technical analysis

As usual, we start this section by looking at the daily chart for the BTC/USD prices, as provided by Bitfinex.

Market Trends & Structure

The minor signs of stabilization and positive evolution for BTC/USD have enormously magnified during this week. Ichimoku’s cloud remains bearish above and ahead of the market, but now price is quickly approaching the Kumo, making already a gentle touch during today. Lagging span has pierced the cloud, and that is usually a good sign. Still, the Kumo is broad and will heavily resist the piercing unless it has enough momentum and synchronism between investors.

Bollinger Bands squeeze gave place to a broadening as expected, and its upper level rejected the premature test on the $7,200 level. Its midline turned bullish, following the behavior of 50-EMA. Price action is now right above 50-SMA but still with bearish long-term moving averages placing themselves above price, in the upper section of the Ichimoku Kumo. There’s a high probability that price will hover $7,000 for a couple more days, as that Fibonacci retracement level of 61.8% is reinforced by the simple fast term moving average.

Volume

Our projected channel for OBV remained valid and untouched during the whole week, which is clearly an optimistic sign – and, perhaps, a gentle validation of its formation. MFI and AD line are steadily bullish with the former quickly approaching overbought territory. Klinger has less momentum, mainly due to the relatively enclosed trading channel, but has a healthy profile, still with a safety margin from its slowing average. One negative factor, however, is the abrupt drop in the volume’s moving average. Not immune to that, is the fact that volume profile has saturated the $6,200-6,800 region to the exhaustion, and we may be starting now to explore other gaps in the price scale.

Momentum

Momentum looks healthy but some indicators are already showing signs of exhaustion. Stochastic is always the first to reach – in the default setup – the overbought territory, and Willy’s is rapidly catching up with it. Nevertheless, as we know, there’s still margin for them to keep a few more days on that level. MACD is slowing down and Aroon keeps in the Up configuration, timidly correcting with the price nuances. Awesome finally turned into positive ground, while PPO Laguerre’s this time is still approaching tops, and yet failing to signal sell signals.

Final Remarks

Bitcoin had a relatively volatile period and somehow stabilized for a few days. That apathetic behavior will quickly develop into another turmoil of prices if history does repeat itself. In the present state, there’s a slightly bullish conjecture on Bitcoin evolution of prices but, as always, with some dangers ahead in the road. First, the resistance levels look solid and bears still have a role to take part in the whole play. Second, momentum is positive, but with volume rapidly slowing down, we might reach its exhaustion stage quicker than expected. For us, the reward ratio of entering right now in the market isn’t clear to be as profitable as promising. If we believe that this exhausts quickly, there may be a place for a quick recovery and another attempt very soon. If this keeps up for the upcoming days then conditions for bears to synchronize and correct heavily the prices are made. So, once again, we advise caution and wait for a more solid view of the whole picture, hopefully on a much healthier volume inflow.

Trade ideas – Market entry/exit values.

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Week Highlights


 

 


 

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