Monday Crypto Market Outlook
August 26th 2019
Bitcoin & Cryptocurrency Market Insights (Aug 18th — 25th, 2019)
Crypto markets saw BTC’s price action trade sideways this week. Hitting an intraweek high of $10,909.14 and then slipping down to an intraweek low of $9,874.95 (~10% drop) BTC ended the week at $10,027.39 (as of 25/8/19 00:00 UTC+8). The top 10 cryptocurrencies (ex. BTC, ETH) on CoinMarketCap.com, as of 25/8/19, displayed the same relative flat trading action with some of the currencies generating a 3–4% gain. BTC still continues to dominate the crypto market landscape with market shares at around 68.3% (ETH has about 7.7%). The last time BTC commanded a market dominance at this level was back in April of 2017 and it took more than a full two years for BTC to get back to this level. If BTC somehow manages to push through the $12,000 mark (see chart below), expect to see BTC dominance continue to rise.
Chart Analysis
Over the past year, the weekly BTC has failed to close above $12,000 causing this level to be the resistance line. If there is a weekly close above this level we can expect a bullish trend to emerge. Because the RSI indicator level is hovering around 60, indicating that BTC is currently neither oversold or overbought, a push towards $12,000 is more than likely.
3 Things you should know about the Cryptocurrency Market
ONE
Unlike the reputation and average returns that traditional hedge funds get in financial markets (the very best hedge fund usually can only make 20%-30% returns in 10–20 years), the CFR Crypto Fund Index has returned 1,430 percent, more than BTC’s 1,022 percent return crypto funds in recent years (Q1 2017 to Q2 2019). Similarly, the Bitwise CCI 30 Index which measures the top 30 cryptocurrencies by market cap returned 1,413 percent. That means that if you invested money at the start of 2017 into the top 30 cryptocurrencies, you would be sitting on some nice gains by now. Here’s what would have happened if you had bought bitcoin 10 years ago.
TWO
A report by Digital Asset Data shows that BTC’s recent correlation with Gold is strong evidence of BTC’s maturation into a ‘store of value’ asset. Over the past 3 months, BTC’s correlation with gold has been close to 1 (representing a perfect positive correlation) and has traded inversely to the moves in the traditional stock market, most notably the S&P 500.
THREE
Institutional investor focused crypto venture, Bakkt, has announced that they will launch physically-settled futures contracts and a crypto custody service (what are crypto custody services?), called Bakkt Warehouse. This will be the first time that crypto futures will be physically settled and further signifies the ‘mainstream-ification’ of crypto and the crypto-futures market.
Disclaimer
Digital assets trading is highly risky and therefore not suitable for the vast majority of people. You acknowledge and understand that investment in digital assets may result in partial or total loss of your investment and therefore you are advised to decide the amount of your investment on the basis of your loss-bearing capacity. You acknowledge and understand that digital assets may generate derivative risks. Therefore, if you have any doubt, you are advised to seek assistance from a financial adviser first. Furthermore, aside from the above-mentioned risks, there may also be unpredictable risks. Therefore, you are advised to carefully consider and use clear judgment to assess your financial position and the above mentioned risks before making any decisions on buying and selling digital assets; any and all losses arising therefrom will be borne by you and we shall not be held liable in any manner whatsoever.
