Market Commentary


The performance of the markets on the 5th of September took out a significant share of the market and reinforced significantly the dominance of Bitcoin in the global digital assets ecosystem. This week, the majority of the altcoins recovered partially from the huge losses of past week and, henceforth, global market capitalization had the chance to place itself, once again, above the $200 Bn mark. Today, at press time, Bitcoin dominance sits at 55.6%, while two weeks ago it was only at 52.3 percentual points.

Until Wednesday, the price negotiated in the $6,200-$6,400 tight range. And after a solid move on Thursday, the trading range climbed to the $6,400-$6,600 range. Overall, the weekly range between the minimum and the maximum ($6,596.5) set the weekly volatility on 7.79%, but with a much smaller, yet positive, weekly balance. Currently, as we write this report, Bitcoin is trading at near $6,500 against the US Dollar, after quickly revisiting the $6,400 lower bound.

Although we looked into the charts in an optimistically way for the past couple of days, the weakening of the traded volume placed our position in a more vulnerable way. Technically, momentum has plenty of room to improve, but it can also revisit quickly oversold territory again, in a dead cat bounce setup. In that scenario, expect the correction to bring us to the $6,000 mark or even to mid-high $5k levels. Given the short distance to the strong resistance, the reward ratio this time may not promote from us a long entry until we see a solid trend, confirmed with an increase in the traded volume.

 


Latest News


 

Cryptocurrency Markets Slump Midweek as Ethereum Hits New 2018 Lows. Cryptocurrency markets are feeling the pressure from an extended downturn on Wednesday, Sept 12, with Bitcoin (BTC) losing 2.5 percent and Ethereum (ETH) hitting its lowest levels since May 2017. Recent comments by co-founder Vitalik Buterin about the lack of growth perspectives in blockchain appeared to exacerbate ETH’s descent to 2018 lows.

ICOs Sold 160,000 Ethereum Over the Past 10 Days. In the past 10 days, Initial Coin Offering (ICO) projects have sold three times more Ethereum (ETH) than they did in August, according to research by TrustNodes published September 13. The total amount of Ethereum sold by ICOs over the past 30 days now amounts to 283,000 ETH, which is almost $60 million at press time.

Mexican State Bank Announces Stricter Rules for Crypto Exchanges. All crypto exchanges and banks providing crypto services in Mexico will now be obliged to receive a permit from the Bank of Mexico (Banxico). To get one, a company dealing in digital currencies must provide a detailed business plan complete with a description of their operations, the commissions they plan to charge, and the mechanism they will use to verify customer identity. Additionally, banks are not permitted to make cryptocurrencies available to users if their accounts were created on the same day. Financial entities are also obliged to identify all customers involved in cryptocurrency trading. Furthermore, any assets acquired by crypto beneficiaries have to go through additional validation checks. Per Banxico, these measures will help prevent money laundering and illicit activities.

China: Central Bank’s Blockchain Trade Finance Platform Pilots in Shenzhen. A new trade and finance blockchain platform, backed by the People’s Bank of China (PBoC), has started official pilot operations in Shenzhen, local news outlet 21jingi reports September 12. The “Guangdong, Hong Kong, and Macao Dawan District Trade Finance Blockchain Platform” aims to provide a blockchain-powered ecosystem for cross-border trading across Guangdong, Hong Kong, and Macau Bay Area.

India Approves MOU on Joint Blockchain Research with BRICS Members. The Union Cabinet of India has approved a Memorandum of Understanding (MoU) on the collaborative research of distributed ledger technology (DLT), local news outlet ANI reported September 12. The Union Cabinet is the supreme decision-making body in India consisting of cabinet ministers and led by the prime minister, Narendra Modi. The MOU, which is a cooperative initiative under the BRICS Interbank Cooperation Mechanism, aims to foster a better understanding of DLT and define areas where the technology can be deployed to improve operational efficiency.

Crypto Exchange OKCoin Expands Trading to 20 More U.S. States. Digital currency exchange OKCoin has announced its expansion of token-to-token trading into twenty new U.S. states, according to a statement published September 12. Per the announcement, OKCoin has extended trading services to the states of Alaska, Arizona, Colorado, Idaho, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Jersey, Tennessee, Texas, Utah, and Wisconsin.

Russian Central Bank Reportedly Conducted ‘Successful’ ICO Trial. An official from Russia’s central bank has revealed that the bank has recently conducted a “successful” experimental Initial Coin Offering (ICO), as cited by local news agency TASS Tuesday, September 11. Ivan Semagin, deputy director of the Financial Market Development Department for the Bank of Russia, told TASS: “Within a framework of the central bank’s sandbox, we conducted an experimental ICO on the basis of our existing infrastructure. Technically it was a success, but we still have a lot of legal issues”.

Nasdaq Exploring Adding Crypto Data Sets to its Analytics Tool, Sources Say. New York-headquartered stock market giant Nasdaq is exploring adding crypto datasets to its market analytics tool, a Nasdaq source told Cointelegraph September 11. Nasdaq’s Head of Alternative Data Bill Dague said that “given [an] abundance of interest, we are exploring cryptocurrency related datasets. Whether or not we launch a crypto-related product remains to be seen.” Crypto datasets would potentially be integrated into Nasdaq’s data Analytics Hub, which launched in 2017 with the aim to make unstructured data more intelligible for the benefit of investors.

Malta Stock Exchange Signs MOU with Binance to Launch Security Tokens Trading Platform. The Malta Stock Exchange’s fintech and digital asset subsidiary, MSX PLC, has signed a Memorandum of Understanding (MOU) with crypto exchange Binance to jointly launch a new security token digital exchange, according to a press release shared with Cointelegraph September 11. The press release pitches the forthcoming trading platform as being poised to benefit from the Malta Stock Exchange’s “26-year track record of operating as a regulated stock exchange,” with the dynamism and international scope of Binance’s business model.

 

 


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

In the previous report, we mentioned the possibility of an upcoming volatile period and the apparent exhaustion of the momentum. With some successive failed attempts on the $7,400 level, a correction plausibly hit the market. But it was far from our imagination to trace up such a quick and turbulent correction. To the equation, we must add the negative news of that day, and the yet vulnerable characteristic of the market to manipulative movements.

Two weeks have been passed since that reading, and, eventually, the market stabilized a bit after the tempest. A local low by the $6,100 mark – with momentum quickly charging up – triggered on bulls some buying pressure that eventually placed us trading in some closed tight ranges. The recovery has been shy but continuous, but the volume profile looks problematic and definitely withdraws reliability of this being actually a recovery path.

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Market Overview

The Week in Numbers

After the moderate correction of prices on the 5th of September, Bitcoin eventually found a local bottom on the last Saturday. $6,119.5 was the lowest value traded on that day, revisiting prices that were last seen by the 14th of August. Sunday had a shy attempt on canceling the losses of the previous day but ended up – in a diminished volume day – only with slights gains, with closing prices above $6,200.

Until Wednesday, the price negotiated in the $6,200-$6,400 tight range. And after a solid move on Thursday, the trading range climbed to the $6,400-$6,600 range. Overall, the weekly range between the minimum and the maximum ($6,596.5) set the weekly volatility on 7.79%, but with a much smaller, yet positive, weekly balance. Currently, as we write this report, Bitcoin is trading at near $6,500 against the US Dollar, after quickly revisiting the $6,400 lower bound.

Market Capitalization and Dominance

The performance of the markets on the 5th of September took out a significant share of the market and reinforced significantly the dominance of Bitcoin in the global digital assets ecosystem. This week, the majority of the altcoins recovered partially from the huge losses of past week and, henceforth, global market capitalization had the chance to place itself, once again, above the $200 Bn mark. Today, at press time, Bitcoin dominance sits at 55.6%, while two weeks ago it was only at 52.3 percentual points.

Best and Worst Weekly Performers

Last weekend, our weekly chart of the top major altcoins traced out a completely bearish scenario. We recover the figure, for illustrative purposes:

In contrast, this week’s chart evidences some signs of recovery, although it cannot span the whole ecosystem. Some coins are still being penalized by the large correction that struck Ethereum (ETH) and made it as low as $170.

In the bottom line of the performance spectrum, highlight to Cardano (ADA), losing 12.44% since last Sunday, and now trading at $0.0685 (0.000011 Ƀ), and Bitcoin Cash (BCH), with a weekly depreciation of 7.89%, trading at $443. Besides the aforementioned positive performance of Ethereum (ETH), highlight to Monero (XMR) which is aiming for a 2 Bn USD market capitalization after 11.5% of weekly gains, and trading now around $118.

14 coins remain with a market capitalization above $1 Bn, with TRON, NEO, and ETC placing themselves in the bottom of that ranking, and with NEM and VeChain at less than $210 Mn from reaching it. Tezos (XTZ) had a very interesting performance recently and is now at the 15th place with $958 Mn of market capitalization. A recent correction halted its continuous climb of the ladder and is now trading at $1.58. Dogecoin (DOGE), Zcash (ZEC) and Lisk (LSK) are the remaining coins that compose the top-20 of the market capitalization ranking, with this last one having around $370 Mn.

Market Forecast

In the previous report, we mentioned the possibility of an upcoming volatile period and the apparent exhaustion of the momentum. With some successive failed attempts on the $7,400 level, a correction plausibly hit the market. But it was far from our imagination to trace up such a quick and turbulent correction. To the equation, we must add the negative news of that day, and the yet vulnerable characteristic of the market to manipulative movements.

The market was developing some healthy signs, and the bull run was appearing to be consolidating. Yet, prices approached a strong resistance level, the confluence area of long-term moving averages and a downward trend line (plus, the 38.20% retracement of the previous bullish run, the lower edge of the Ichimoku cloud and the upper margin of the Bollinger bands). With momentum in overbought territory and volume downfalling, we had here a whole conjecture for a corrective movement to take place. Yet, we could imagine this to stretch a bit further, but the recent market news didn’t bring more prospective signals, and the price had to collapse.

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Bitcoin Technical Analysis & Trade Ideas


[switch between the Technical / Trade section below]

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

After some clear signs of recovery, Wednesday 5th dump of prices broke that bullish rally that we have been patiently watching to develop. Price got rejected in the upper Bollinger bands (and the lower edge of the Ichimoku cloud) and transversed all the way down to its lower edge. That downfall also made the price action to move into below the faster moving averages (50-SMA and 50-EMA). Their recently acquired bullish slope has turned to the downside, evidencing almost the same slope profile of the slower ones (200-SMA and 200-EMA).

Ichimoku cloud has narrowed a lot ahead of the market but still remains bearish. Its lagging span got also rejected as it was entering the Kumo and it’s gonna be needed that price climbs back up to the $6,800 mark before we can talk about another bullish sign from it. The downward trend line from the local high of May of 2018 is competing with the trend line from the local high of March of 2018. Nevertheless, both are providing a resistance to the evolution of prices and, together with a supportive trend from the local low of June of 2018, enclose the price action in descending triangle formation.

78.6% Fibonacci retracement from July’s high acted for a few days as a resistance ($6,425) and is now acting as a support for the current price action, reinforced by the same Fibonacci retracement from the 5th of September. $6,750-$6,850 has all the ingredients to deny the price recovery: the confluence of short-term moving averages – apparently approaching a bullish cross formation – and the Mountain Man from mid-July retracement. To the below-side, support is emerging by the $6,200 level and, more recently, by the aforementioned $6,400 mark. $6,000 always have a great psychological importance when it concerns weighing investment decisions. $5,755 as the year to date low, $6,800 and $7,200 as recent resistances, extend that trading channel a bit further.

Volume

On-balance volume took recently a massive downturn, leaving an M-shape on its trail since the 5th of September. The upside turn that OBV and the remain volume indicators evidenced in the following days forecasted a triangle enclosing formation, which has now gained a pretty solid structure. Accumulation/Distribution, Klinger and MFI all switched to the downside of their correspondent moving average on that day, but have recently turned upwards, reflecting the shallow recovery that BTC/USD has experienced this week.

Nevertheless, MFI’s moving average appears to be rejecting the bullish cross, and Klinger is also losing steam. To this factor isn’t immune the fact that 20-days volume moving average has been decreasing over the past weeks and volume on last Saturday was abnormally low.

Momentum

The correction of prices quickly brought the momentum indicators from overbought to oversold territory. Eventually, the setup positioned itself in a good conjecture to have a recovery of prices in the imminent horizon. Sunday still has a half-day trading ahead but, for now, it’s not looking too encouraging. Stochastic flattened out and Willy is getting rejected by its own moving average. MACD histogram was almost crossing its zero line and Awesome Oscillator was following that trend but it’s further slowing down. Aroon Up is zeroing and still hasn’t managed to switch places, while PPO Laguerre is sailing tread waters.

Final Remarks

The performance of Bitcoin on the 5th of September was a huge drawback on bulls aspirations. Yet, the fact that momentum was approaching exhaustion levels somehow contemplates the imminence of that correction. That quick turmoil period turned the picture of momentum upside down and some of those indicators quickly charged up. Eventually, the volatility gave rise to some stability and bulls took their share on the positive conjecture of momentum and volume.

However, the recovery hasn’t been impressive. It’s positive that the price climbed solidly some trading “ladders”, moving the channel continuously up, but the volume profile looks kinda problematic. The one-million dollar question now is to see if bears take over this apparently vulnerable period, or if bulls decide to attack the strong resistance level by the $6,800 mark, the confluence zone of 50-day moving averages, Fibonacci retracements and only at a short distance from the downward trendlines, a region where smart-money usually likes to intervene.

Although we looked into the charts in an optimistically way for the past couple of days, the weakening of the traded volume placed our position in a more vulnerable way. Technically, momentum has plenty of room to improve, but it can also revisit quickly oversold territory again, in a dead cat bounce setup. In that scenario, expect the correction to bring us to the $6,000 mark or even to mid-high $5k levels. Given the short distance to the strong resistance, the reward ratio this time may not promote from us a long entry until we see a solid trend, confirmed with an increase in the traded volume.

Trade ideas – Market entry/exit values.

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Week Highlights


 

 

 


 

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