Sunday, October 07, 2018

The moment of the peak of uncertainty has come and the nerves of the market are stretched to the limit

The moment of the peak of uncertainty has come and the nerves of the market are stretched to the limit

In the weekly author's column Pavel Shchipanov, head of the ICBF analysis and research group, assesses the market prospects against the background of the latest news.

Cryptocurrency # 1 continues to intrigue the community with its ability to move without certain dynamics in recent months. The boundaries that we indicated earlier - $6000 - $6800-remain relevant, because the price has not accumulated forces to break them into one of the sides. Within the current week, it is even possible to observe the predominance of movement near the value of $6600: then down by $100−$150, then up by a similar amount. At the same time, it should be noted that from the point of view of the fundamental component of the reasons for the price movement, there are constantly any grounds for the development of the trend. But, in fact, these news do not affect the price, after the SEC postponed indefinitely the decision on the application of VanEck SolidX Bitcoin Trust ETF or, in simpler words, on the start of trading by the exchange Fund ETF for bitcoin. After this event, two more meetings of the commissioners of the state Department were held. At the same time, according to their results, the only decision was constantly made — to postpone consideration due to lack of information at the moment and fears for the safety of investors ' funds. Recall that the next meeting of the SEC commissioners may take place before the end of 2018.

The most positive event of the week was the news about the creation of a startup Circle (Circle belongs to the largest Bank in terms of assets Goldman Sachs) stablecoin based on the us dollar — USD Coin (USDC). In comparison with other analogues, such as TrueUSD or main competitor young tablconv Tether (USDT), the asset will be provided in the ratio of 1:1 physical dollars and will be audited by the audited companies, in contrast to the USDT, the funds remain in the accounts which is being questioned by investors. As if by chance in the same days began to be exaggerated in the media has not yet confirmed, although not refuted, information about possible problems in Puerto Rican Bank Noble Bank International, which previously housed the funds Tether. But later it became known that affiliated companies Tether limited and Bitfinex exchange managed to withdraw funds in the amount of $3 billion to another financial organization.

Graphical display of growth dynamics of deposits in Noble Bank and issued by Tether from 2014 to early 2018. Source.

Assessing the current situation, the CEO of the crypto-exchange Binance — one of the leaders in the rating of CoinMarketCap-Changpen Zhao is confident in the early growth of the crypto-currency market, because there is no "bear" market now. Echoes no less than the legendary wall street personality Mohammed El-Arian. He did not give a forecast on the value of bitcoin until the end of the year than many market gurus have been trying to surprise in recent months, but he inspired investors by saying that "the crypto market has not died ... we will see widespread recognition of cryptocurrencies by the private and public sector in the near future." At the same time, El-Arian confirmed his readiness to buy bitcoin only from the level of $5000.

It should also be noted the statements of experts of another major financial institution from wall street-Bank of America (BoA). They believe that the blockchain technology could potentially create a new market with a market capitalization of more than $7 billion for companies from the real estate industry, cloud computing and the delivery of, for example, for Amazon and Microsoft.

In addition to the statements of these important personalities about the interest in the world of blockchain and cryptocurrencies, it is necessary to note another argument in favor of their acquisition. Namely, the volume of bitcoins stored in the top 100 wallets of whales.

Dynamics of bitcoin accumulation on the top 100 wallets. Source.

It can be noted that the owners of wallets in the falling market do not sell their bitcoins, but, on the contrary, actively buy them. So, from 8 wallets of whales 45,834 bitcoins were sold, while on 14 wallets in September the balance increased by 109,522 bitcoins. And, apparently, the largest holders of cryptocurrency tend only to accumulate in anticipation of future value growth, unlike ordinary investors who are trying to catch the waves of the trend. And what is the situation at this time on the charts?


Now let's assess the current situation from the point of view of technical analysis. Special changes in comparison with our previous review did not happen. On the chart below, we can note the development of the movement within the framework of the technical analysis model of "Andrews Villa" and provided that the support is fixed below $6500, we should expect to reach the area of $6400 with the potential to achieve in the future and the cluster levels of $6000−$6111−$6200.

But if the decline will be in the nature of a short correction and in the coming weeks there will be signals to buy, we should expect growth in the resistance area of $ 6670, $6820 and $7000, which is now the upper limit of the "fork".

BTC/USDT chart, four-hour timeframe. Source.

Note the narrowing of the boundaries of the Bollinger bands (indicated on the charts above and below in blue), which usually precedes the beginning of a powerful movement. Therefore, we should not forget about the longer-term goals. The development of the movement to decrease below $ 6000 will allow to achieve consolidation in the form of strong support at $5600 and $5776−$5880.

Alternative a break above $7000 will give grounds for testing areas $7200 and consolidation $7375−$7500−$7800. To talk about other goals will be the most rational only in terms of well-formed trends.

BTC/USDT chart, daily timeframe. Source.

Ethereum and other altcoins

The altcoins market continues to move without reference points, so, as traders joke, now it "moves to the right". There are also no interesting trading ideas on the air, and the price is close to the value of $220, where the 200-period simple moving average line is located on the four-hour chart. After the implementation of the forecast to reach the levels of $230 and $240, followed by a rollback, expectations remain about the possibility of a new attempt to collapse to the levels of $180 and the cluster of $193−$200. But in the case of a powerful collapse below $ 180, we should expect a movement to the levels of $160, $131 and $100.

In the longer term, we should expect the current values to move up to the resistance area by $251, $270 and $300. Finally confirm the idea of developing a new trend for the growth of withdrawal above $340, where the line is 23.6% correction on the Fibonacci lines.

ETH/USD chart, weekly timeframe. Source.

And finally, a little positive: John McAfee confirmed his readiness to nominate his candidacy in the presidential elections in the United States in 2020. Although he understands that he will not take the chair of the head of the country, but promises to popularize the new digital economy.

Profitable you deals!