Monday Crypto Market Outlook 102119
October 21, 2019
The Rundown
The past week for Bitcoin has yet to show any signs of life. An oxymoron more or less when describing the cryptocurrency markets, but even a 4% drop in an hour still doesn’t pump our blood anymore. If we are looking for BTC to be the ultimate store of value or a currency, which inherently needs price stability as one of its characteristics, then should we still be rooting for those 10x shots to the moon?
Since Oct. 13th, BTC has only moved about 1% to the downside. And if we look at the daily chart, bearish signals seems to be lighting up as a death cross looms around the corner. A death cross, meaning when the 50 D SMA cuts through the 200 D SMA to the downside, has been a traditional bearish signal for the equity markets. And the last time this happened back on March 2018, more than a year ago, we were basically at the start of crypto winter. The past week has also witnessed BTC’s 21 D SMA acting as resistance starting from $8,600, down to around current levels of $8,200. If BTC manages to fall through $7,720, I would expect a further sell off to happen as volume orders below that are very shallow right now.
As with the rest of the top alts, XRP was the winner with a 6.5% gain and EOS being the loser with a -6% slide. XRP is an interesting coin to follow. Since the September 24th correction, it is up close to 40% from a low of around $0.21 to a current level of $0.29. Although momentum seems to be slowing down as the Money Flow indicator is showing a reversal from the 80 level and the MACD showing a near downwards cross through the signal line. If the 50 D SMA can manage to breakthrough the 100 D SMA, use that as a sign of strength for the bulls. But a near term downside move is more imminent as Ripple’s sales fell 74% quarter over quarter according to their latest XRP Markets Report released this past week. It’s also a bit comical how they mention misinformation on Ripple’s markets as a scapegoat for dampened sales. Welcome to the unregulated industry of crypto?
Three things to know
1. FXCM Group, a popular FX trading platform, has launched a basket of 5 cryptos, including BTC, LTC, BCH, and ETH, for retail investors to get their feet wet in the crypto space. This basket is being named CryptoMajor and as FXCM’s CEO quotes, “Trading a basket of cryptocurrencies means our users are freed from the hassle of constantly monitoring the markets. CryptoMajor therefore streamlines the trading process and protects our customers from unanticipated and adverse market movements.”
2. When the Shanghai Gold Exchange launched its Shanghai Gold Price Benchmark, an omen to other nations leading suit and away from the COMEX, LMBA, and western bullion banking cabal has tipped the iceberg. For decades the COMEX in Chicago and NY has been the leader in setting gold prices, but as other countries including China, and recently the UAE, setting up their gold exchange, the global standard of the US Dollar based pricing of gold is surely in threat.
3. In yet another surprising and not surprising piece of news, a third Goldman Sachs banker has been charged for insider trading in 18 months. The culprit, Bryan Cohen, a VP at Goldman, has leaked nonpublic material information for three years in exchange for cash. Could this behavior been avoided in crypto? Probably not still.
Chart of the week
As mentioned above, a looming death cross is quickly approaching as price action continues to consolidate possibly towards the downside with the 21 D SMA acting as resistance. To pivot to another market as a indicator of BTC’s price, the S&P has been suppressed by the resistance level of 3000. If we see the S&P pull out from under this level, expect BTC to see the jolt that it needs. A lot of global factors also need to be aligned in order for such a scenario but as we see the continued US-China trade war extend and the latest impeachment status of Trump, the near term downside is still a possibility. And with China’s latest GDP number showing the slowest quarterly growth in the past two decades, it’ll be interesting to see how it plays out for the rest of the year.
