Bitcoin / US Dollar
The weekend was pretty active, a rare position for cryptocurrencies as the price climbed again, breaching $19,000 one more time. This has created enthusiasm in the investing community for another potential bullish move in the next days. As we can see in the diagram below, the market made two corrections in the recent past, as the price was trying to climb above $19,000. The first correction was made in late November when the price fell from $19,000 to $17,000 in just 2 days, showing that many investors were happy with the accumulative return they had to achieve and decide to capitalize on that.
The second attempt was held during the previous week. After the price hit a new all-time high level, near at $19,800, it started to tremble down and reach $18,000 by the end of the last week. This means that investors stop to liquidate positions and found new ways to re-invest in the market. We believe that the market can continue to grow in the next period if there is more fuel in the market, deriving from new institutional investors.
At this point, we should a disclaimer about the institutional investing part. The majority of institutional investors that buy Bitcoin or any other cryptocurrency for their portfolios, execute the transaction over-the-counter, meaning that no crypto exchange is involved in that process in terms of balancing demand and supply for the cryptos. This practically means that a single buy from a large institutional investor will not affect the price directly as the assets will not be transferred in typical exchange accounts. Another important aspect in the institutional investing part is that this kind of investor will keep their assets for a long time, trying to create value over them in their portfolios.
The indirect effect of institutional investing in market formation is the lack of available tokens for investing. As institutional investors are claiming large chunks of Bitcoin for themselves, there are fewer bitcoins in the market to be traded, raising its value by the scarcity rule. In the next days, we will see in the real world, how this move will affect the market, and the price formation.
The trading volumes have lowered during the last days, indicating that the market momentum has not gained many trends at this point. On the other hand, the moving averages have moved in parallel positions but they are still very close to each other, showing that a bearish turn will change the perspective.
In the short-term diagram, we can observe that the market has sustained a high level in price formation during the last 3weeks, indicating that there is more depth in the market than expected in the previous period.
Indicators
MACD index continues to grow during the weekend but remained on negative values, showing that there is still fear for another downtrend. The RSI index moved above value = 55, indicating that the price will remain on the same levels but with a positive outlook shortly.
Ethereum / US Dollar
The positive reaction for Ethereum has also given the market a boost. Ethereum rose from $550 to $585, during the weekend. This move enabled the coin to remain in the high area regarding price formation, showing that the bulls have not abandoned the market. The strong correlation between Ethereum and Bitcoin will shape the coin's next moves and how it will establish itself in the crypto market. We can see that the same pattern was followed in both markets with two corrections to take place before the current situation.
If the price drives independently above $600, we will see another round of bullish investments in the coin that will help it to get more traction and become a viable option for any interested investor. The trading volumes have been at lower levels than the previous bullish trend, showing that another uptrend will need more external capital. On the other hand, the moving averages crossed each other in bearish formation, creating a reverse "Golden Cross". This signal might be proved to wring if the market continues to move in a positive direction.
Indicators
MACD index moved positively during the weekend but remained on the negative side. On the other hand, the RSI index lays at value = 55, indicating possible stability with a positive outlook on the short-term horizon.
Ripple / US Dollar
The only asset that moved in the opposite direction from the entire market is Ripple. Its price moved from $0.55 to $0.50, accumulating losses of 10 % in just a weekend. As we can see in the diagram, Ripple could be considered as an overvalued asset as it grows drastically in a just week for 100 % gains.
As the coin was "medium" correlated with Bitcoin, its move will have possibilities to go both ways. We believe that Ripple's "fair value" was much lower than the current one, creating a correction in the market, which seems to be predictable. We will see in the next days what will happen in the price formation and when the bearish trend will stop. Also, we should point out that there are no support levels in the market until the $0.30 point.
The trading volumes have been sustained at high levels, showing that investors are trying to liquidate more and more positions. The moving averages were correct this time and successfully predict a turn in the trend, from bullish to bearish.
Indicators
MACD index moved even deeper in the negative area while the RSI index continues to give a negative outlook for the market, even with a stability perspective.
Litecoin / US Dollar
Litecoin also followed Bitcoin in a positive reaction, showing its integration towards a single point in the market. The price climbed from $72 to $79 during the weekend, creating the same pattern that Bitcoin made during the previous period. We believe that the market will return to the previous bullish levels as long as the Bitcoin market allows it. We don't have great expectations about it but we should take a close look at that.
The trading volumes have remained at normal levels for Litecoin while the moving averages crossed each other in a bearish way, creating a reverse "Golden Cross", which has been proved wrong for now.
Indicators
MACD index continues to move positively but remained at a negative field while the RSI index lays at value = 50, indicating that the price will remain in the same position for some more time.
Bitcoin Cash / US Dollar
Bitcoin Cash had a milder reaction in the market's moves as the support level around $260 held firmly and the price surged at $270, supported by the overall market trend. We don't know for how far this move will go on but we should claim weaker reactions in the current situation from Bitcoin.
The trading volumes have been sustained at normal levels for the Bitcoin Cash market while the moving averages are still in bearish positioning, creating negative feelings about the coin's future in the crypto market.
Indicators
MACD index lays in the negative area, but it continues to move in an uptrend movement. The RSI index has moved at values below 50, showing that there are still bearish clouds in the market.
Correlations
Bitcoin / Ethereum = 0.96 (+ 0.04), Bitcoin / Ripple = 0.28 (- 0.22), Bitcoin / Litecoin = 0.90 (+ 0.04), Bitcoin / Bitcoin Cash = 0.58 (+ 0.03)
The majority of correlations went positive during the last weekend, showing that the market is moving at more integrated positions, creating a new standard for the crypto market. Ethereum and Litecoin have almost topped their correlation with Bitcoin, indicating that they have been following the leader very close and they will continue to make bold connections between them also. Bitcoin Cash has remained in the "medium" correlation zone, showing important support in the current position. The only asset that started a contrarian move in the current situation was made from Ripple, which started to correct heavily during the last days. This means that a small unbundling will emerge in the market, creating some confusion among investors.
Key Notes For Today
Bitcoin surpassed the $19,000 for another time, trying to establish at higher levels
Ethereum followed the same pattern, landing at $580
Ripple moved in the opposite direction, dropping at $0.50
Litecoin followed the same pattern as Bitcoin, landing at $80
Bitcoin Cash had a mild reaction, climbed at $270
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Remitano. Every investment and trading move involves risk, you should conduct your own research when making a decision.
