Monday Crypto Market Outlook
October 7, 2019
The Rundown
After the lackluster opening week of Bakkt’s physically deliverable BTC futures, where we saw a 20% drop in one day, the following week saw price action “relatively” calm. BTC is down 4% with the other top altcoins staying flat in sideways trading. The surprising winner is TRX (TRON) which is up over 8% since the past week and have somehow rejuvenated its Twitter activity since the Buffet lunch fallout this summer. It’s hard to say anything good about their egotistical CEO, Justin Sun, but despite trading down to its nearly lows of around $0.01124, the most wtf-information I have come across this week is how it is considered one of the most safest coins to buy right now, according to cointobuy.io (gotta love those crypto rating sites).
But probably the most stunning news to come out this past week was the settlement between Block.one, parent company of EOS, and the SEC over charges relating to EOS for conducting an unregistered ICO — violating both Reg A and Reg D of the Securities Act- that raised a total of $4 Billion. Stunning in the manner that EOS basically got away with their ICO raise which goes to show that mass adoption is right around the corner. Although we frown upon the too big to fail banks getting away by paying penny settlements with the SEC, this case perhaps was a reliever, pushing EOS up 3% the past week.
All in all, as we continue to see BTC drop lower pulling down its dominance to a now 66% level, many analysts are starting to call for the beginning of alt-season. But that goes hand in hand with what BTC will show us. Which you could also say goes hand in hand with what the equity markets show us. Although historically, both BTC and the S&P have a correlation coefficient around 0, trend wise, both go in the same direction. A “non-correlated asymmetric asset”, as Anthony Pompliano, likes to call it.
Three things to know
1. Rep. French Hill (R-Ark.) and Rep. Bill Foster (D-Ill.) both sent letters to Fed Chairman Powell, outlining their own concerns they have about risks to the U.S. dollar if another country or private company creates a widely used cryptocurrency. One of the letters was quoted:
“We are concerned that the primacy of the U.S. Dollar could be in long-term jeopardy from wide adoption of digital fiat currencies. Internationally, the Bank for International Settlements conducted a study that found that over 40 countries around the world have currently developed or are looking into developing a digital currency.”
2. This week saw Paypal withdraw from their membership in the Libra Association in an effort to continue focusing on their own business advancement. In specific words they stated their intent to, “…“continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.” Does this set a precedent in seeing other current members drop out from the Libra Association?
3. In an effort to boost Bakkt’s inauspicious debut, two large institutions, Galaxy Digital and XBTO, conducted the exchange’s first block trade of Bakkt’s bitcoin futures contract. A block trade is a large transaction that takes place off the open market in order to avoid moving the price too much. And what we see is perhaps a slow movement of institutions getting more interested.
Chart of the week
Just a few days ago we saw LTC’s 100 D SMA breakthrough its 200 D SMA to the downside giving bears an opportunity to have some action. An interesting price level that should be watched is 1.414 level from the Fibonacci extension retracement which is around the $47 price level. Back near the 2nd half of 2018, LTC bounced off this level 3 times for support. If LTC cuts through, look for further depreciation but if it somehows manages to bounce off once again, look for a swing rebound in the near term.
Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions.
