A bite-size overview of digital asset market trends for this week

Institutional interest is expected to return in the cryptocurrency space as traders brace for the start of the final quarter this year. The highly anticipated Intercontinental Exchange-backed crypto startup Bakkt announced that they will start taking bitcoin custody this Friday, as part of the preparation works for the launch of their bitcoin futures products later this month. Back in December 2017, when CBOE and CME first launched their bitcoin futures contracts in the US, the prices of bitcoin surged about 140% in a month before the launch, it will be interesting to see if the leading cryptocurrency could repeat that performance.

At the same time, there’s another sign showing that more hedge funds are willing to get involved in cryptocurrency investment. FT reports that hedge fund Brevan Howard is launching a $1 billion crypto portfolio amid the strong performance in the sector this year.

Despite the recent bitcoin price corrections, there are seems more financial heavyweights are turning bullish on crypto assets. In a recent tweet, Raoul Pal, Goldman Sachs’s former head of hedge fund sales, stated that cryptocurrency could potential way out of a potential recession.

There are also few events that crypto watchers would like to put under the radar, such as the development of the China state-backed crypto, the testing of Telegram’s blockchain and possibly launching their token, and the changes of capital flows in the financial world as the final quarter of this year starts.

Price Analysis

BTC/USDT

Source: OKEx
  • BTC/USDT is expected to recovery this week as the support at around 9,300 remains valid on the 4-hour chart.
  • The pair is expected to retest the phycological 10,000 levels this week, which is also the 23.6% of the Fibonacci retracements, and the top of the recent downtrend.
  • The Bollinger Bands have been squeezing, indicates that price volatility was relatively low, the volume is expected to increase when near a breakout.

OKEx’s BTC Long/Short Ratio

Source: OKEx
  • There were some other indicators showing the short-term downside of bitcoin maybe limited. OKEx’s BTC Long/Short Ratio hovered at recent low of 1.08, indicating that the ratio of short position reduced after the price correct last week.

LTC/USDT

Source: OKEx
  • According to the 4-hour chart, LTC/USDT is expected to retest the key resistance level at around 67 areas this week, which is also a downtrend formed since early August.
  • The RSI has reached near the overbought level of 77, and it has failed to break the 80 levels a few times in August, and usually followed by a price correction.
  • Traders may want to wait a bit before longing the pair as we expected the pair will retreat to the lower 60 handles.

ETH/USDT

Source: OKEx
  • ETH/USDT is expected to form a death cross on a daily chart this week, meaning the 50-day SMA (yellow line) will likely drop below the 200-day SMA (green line), which analysts and traders interpret as a signal of a bear turn in the market.
  • Back in late April the pair formed a golden cross and started a rally that lasted for about two months.

XAS/USDT

Source: OKEx
  • We’ve followed up XAS/USDT in our last Market Watch publication and highlighted the divergence of the trading volume and the price-performance could be a hurdle of the rebound. As a result, the pair failed to sustain its support near 0.07, and the 10-day SMA has turned to a near-term resistance.
  • If the pair give up the level of 0.06, the next reference level could be the last low at near 0.05.

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.


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