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

Crypto traders started off the week with the prices of bitcoin above 10,300 level, however, the lackluster price actions of the leading cryptocurrency have been keeping some of the traders off the table for now, as the triangle pattern on the chart has already lasted for a prolonged period. Data shows that the trade volume of bitcoin against the dollar has been shrinking in general, as increasing traders were taking a wait-and-see approach.

While the price actions of bitcoin may not look exciting, things are a little different in the altcoin world, with Ethereum has inched closer to the key 200 marks and EOS was traded above 4.10 levels. We believe market sentiment has been shifting from bitcoin to altcoin, as the ex-bitcoin total market cap has reached over 81 billion, that’s the highest in more than two weeks (figure 1).

Figure 1: Bitcoin Market Cap VS. Ex-Bitcoin Total Market Cap (1-Month)

Source: Tradingview

Regulatory-wise, we see Libra has back to the headlines, as FT reported that Facebook’s Libra team had meetings with the Bank of International Settlements’ Committee on Payments and Market Infrastructure in Switzerland. The Committee is supervised by the Bank of International Settlements, which is part of the European Central Bank. Executives at the ECB reinstated that the bar of Libra’s regulatory approval would be “very high”.

Staying in Europe, the EU is reportedly planning to launch its own version of crypto ahead of Libra. Reuters reported that in a meeting last Friday, France’s Finance Minister Bruno Le Maire believed that Europe should consider its own public digital currency to challenge Libra.

Meanwhile, in China, authorities are stepping up the efforts of cracking down bitcoin mining. Chinese crypto media Chain News reported that the province of Inner Mongolia issued a statement, saying that cryptocurrency mining is not a real financial innovation and nothing to do with the real economy, therefore it should not be supported.

Price Analysis

BTCUSDT

Figure 2: BTCUSDT Daily Chart

Source: OKEx; Tradingview

Figure 3: OKEx’s BTC Long/Short Ratio

Source: OKEx
  • The pair have been staying in the triangle formation since July and yet we haven’t seen a breakout (figure 2). Both RSI and MACD show no clue of the price direction.
  • We would like to highlight the low volume situation, which indicates traders could have been staying away until a clear direction emerges.
  • OKEx’s BTC Long/Short Ratio has back to the recent highs of 1.62, showing that the current condition is more favorable for short traders.
  • From the Long/Short Ratio readings plus the recent thin trading condition, we believe that the current state could possibly more beneficial with short positions. Traders could set the first target at around 50-SMA, and the bottom of the triangle as the second target.

ETHUSDT

Figure 4: ETHUSDT 4-Hour Chart

Source: OKEx; Tradingview
  • The pair outperformed bitcoin and surged more almost 4% in the Monday morning Asia session, traded at above 100-SMA.
  • The positive price actions seem supported by fundamentals, as data shows that ETH’s gas usage hit an all-time high, meaning that the Ethereum network was in high usage demand.
  • However, the RSI indicates that the pair were overbought (green arrows). The last two times of overbought were followed by a price correction.

ZECUSDT

Figure 5: ZECUSDT Daily Chart

Source: OKEx; Tradingview
  • ZEC was one of the altcoin gainers across the OKEx’s trading platform, it traded more than 6% higher against USDT at the time of writing.
  • The pair also traded above the 10-SMA (red line) for the first time since July, with the RSI showing the pickup of the momentum.
  • The recent price actions could consider as a breakthrough in the recent downtrend, however, it would be more persuasive if there’s more evidence of a turnaround, for example, an increase of volume.

BXKUSDT

Figure 6: BXKUSDT 4-Hour Chart

Source: OKEx; Tradingview
  • BXKUSDT was among the laggers on Monday trading, the pair plummeted 16% at the time of writing.
  • Despite the recent uptrend, the pair has shown some volatile movements recently, and those movements suggested that two flag patterns have formed.
  • It remained a question if a third flag could be produced, but the recent volume has shown a divergence with the trend.

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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