The cryptocurrency market is slightly gaining traction as we come to the end of the week. The digital assets have collectively explored new lows in the month of May. Bitcoin dropped from trading above $8,000 to test the key support area at $7,300. A brief bullish momentum teased the market yesterday where cryptos like Bitcoin Cash (BCH) and Monero (XMR) recorded slight gains. The bear pressure is still looming in the market but cryptocurrencies have begun making corrections to the upside. In our Investor insight segment today, we will look at the two coins that offer the best buy opportunities; Monero and Bitcoin Cash.
Although Monero is down over 45% in the last past one month, the cryptocurrency has stayed abreast with the other digital assets. It has battled to shake off the negative press surrounding it with allegations that is a favourite for criminal activities. Monero achieves its privacy by cryptographically obsfuscating the addresses that are sending and receiving funds. The amount of the money sent is also hidden from the public.
Monero along with other privacy-focused coins were removed from Coincheck and Korbit exchanges this week due to their focus on privacy. This might seem like the crypto that is always in the red. But Monero has been making considerable developments and upgrades and has come to be known as the only real untraceable coin. Moreover, the lead cryptographer Ricardo Spagni is working on launching another project under the umbrella of Monero known as Tari. Tari is going to be the real Ethereum-Killer and probably the first real competitor. It will focus on developing a new protocol that will allow the creation of decentralized applications. Furthermore, Monero has said that the end user experience will be one that has never been seen before.
At the moment, Monero (XMR) is trading at $165, although it opened the session above $170. The buyers are looking forward to $200 but in the meantime, a break above $190 will be good enough. Monero (XMR) surged in price during the bullish trend in April, tested $300 but selling pressure kicked in leading to lower corrections. Monero (XMR) has the potential to retrace higher and currently, buying the dip is the best entry position.
Bitcoin Cash (BCH)
Bitcoin Cash (BCH), on the other hand, has been on a journey of its own. It was trading side by side EOS and both made considerable gains last month. EOS smashed its all-time high at the beginning of the year, while BCH/USD attacked the $1,800 level. The hard fork on Bitcoin Cash was the main catalyst for the surge but did not lead to the creation of a new coin. This generally affected the price towards the hard fork but the good news was that the network has become faster and the user experience has been improved as well.
Bitcoin Cash adoption into the economy is on the rise with many merchants across the world preferring BCH payments as opposed to BTC. The cryptocurrency payment processor, BitPay added support for Bitcoin Cash payments. The move was welcomed with open arms by customers who had to change their BCH to BTC before making payments. The usability of a coin contributes to the demand for the coin which has a ripple effect on the price.
The fourth cryptocurrency by market capitalization is currently trading at $1,030. It has recovered from sliding below $1,000 during the session on Thursday 24. The technical analysis places the next target on the upside at $1,100 but the bulls are psychologically eying $1,300.
The crypto market is a volatile one, but a downslide also presents the best buy-low opportunities. No one wants to buy Bitcoin at its all-time high at almost $20,000. But buying Bitcoin at $8,000 and it surges to the all-time high is impressive to the investor. Significantly, Monero (XMR) and Bitcoin Cash (BCH) present good opportunities to enter while the price is low. Industry analyst Tom Lee has predicted that a bull run will be led by Bitcoin which, he says will hit $25,000 by end year. Other cryptocurrencies will surge too as a result of the Bull Run.
Bitcoin (BTC) Cannot Trade Sideways For Long
Bitcoin (BTC) made a big move to the downside after we last talked about it on Friday but in the days that followed it has practically traded sideways. However, now it has run into a key trend line resistance and is once again on the verge of a sharp decline. The last time this happened, we saw the price decline massively and if the same happens again then we are looking at BTC/USD declining towards the bottom of the descending triangle that we see on the daily chart. This is a bearish development for the overall market but it is in line with what is happening in other markets.
If we take a look at what is happening in the EUR/USD forex pair, we can see consistent rejections at the 50 day EMA. This has been happening for a while now and EUR/USD has failed to break past the 50 day EMA. All of this points to the strong probability of a sharp decline in this pair followed by a similar decline in BTC/USD in the near future because movements in this pair directly affect movements in Bitcoin (BTC). A quick glance at ETH/USD tells us that the Ethereum (ETH) and the rest of the altcoin market share the same outlook despite temporary bullishness. The pair has done pretty much nothing except for making big moves to then invalidate those moves. This has given traders better entry points to short sell this pair.
The daily chart for the S&P 500 (SPX) shows us that the entire time what the index has been doing is just delaying the inevitable. We have now seen a close above the 50 week EMA on the S&P 500 (SPX) but that hardly changes anything. Trend line resistance on the daily chart shows us that the index does not have much room to rally and it is only a matter of time before it begins its downtrend. We have the LTC/USD chart pointing to the same outlook. The manner of its rise and fall is quite symmetrical and it is easy to see what might follow next which is why traders that are trying to buy cryptocurrencies at this point need to exercise extreme caution.
Bitcoin Could Soon Incur Major Volatility as Bears Gain Upper Hand
Bitcoin (BTC) has failed to garner any significant buying pressure after facing a sharp influx of selling pressure yesterday that sent it reeling to the lower-$8,000 region – which is where it was able to find enough support to halt its drop and stabilize its price.
Analysts are now noting that multiple indicators signal that the crypto is positioned to incur notable volatility in the near-term, which could mean that the direction that BTC will trend for the coming few months will soon grow clear.
Bitcoin Drops Towards $8,300; Is a Big Movement Inbound?
At the time of writing, Bitcoin is trading down just over 1% at its current price of $8,300, which marks a notable retrace from its recent highs of $8,900 that were set last week when BTC’s bulls quickly pushed the crypto towards this price level, which is where it found significant resistance that sparked a short-term downtrend.
This downtrend was perpetuated yesterday when bears quickly pulled the rug out from beneath BTC and sent it to lows of roughly $8,100 before it rapidly climbed back towards its current price levels.
In the near-term, it is highly probable that Bitcoin and the aggregated crypto markets will soon incur notable volatility, as BTC is currently forming “spinning top candles” within the middle of its tight Bollinger Bands – both signs that a big movement is imminent.
“$BTC #Bitcoin – Todays spinning top falls right in the middle of the bands- When volatility hits we could see $7900 to the downside or $8600 to the upside, so prepare accordingly,” Big Cheds, a popular cryptocurrency analyst on Twitter, explained in a recent tweet.
Could BTC Still Target $8,600 in Near-Term?
Despite the bearish price action as of late, it is important to note that there are still analysts who anticipate an upwards movement for Bitcoin in the near-term, with Mayne explaining in a recent tweet that he believes BTC could target $8,600 next.
“$BTC: Expected a test of $8150 and we got it. Preemptively long expecting another bullish week. Will compound above the weekly open/monthly open ($8278 & $8300),” he said while pointing to the below chart.
If Mayne’s analysis does prove to be accurate and Bitcoin is able to break above $8,600, this could mark a bullish break that sparks massive volatility that favors the cryptocurrency’s bulls.
UK Forex Giant Launches New Bitcoin Service as Brexit Fears Grow
UK-based FXCM Group has introduced a new bitcoin trading service right around the time when investors weigh the possibility of a hard Brexit.
The forex brokerage giant announced in a press release published on Monday that it is launching CryptoMajor. It is a basket that contains five popular cryptocurrencies – Bitcoin, Ether, XRP, Bitcoin Cash, and Litecoin – in equal proportions. CryptoMajor behaves as a single unit representing the combined value of the said assets. It means FXCM users would be able to collate and offload multiple cryptocurrencies at one go, without the need to manage each one of them independently.
Brendan Callan, the chief executive officer of FXCM, treats CryptoMajor as an ideal hedging risk management tool for retail traders. He projected the basket as a “great opportunity” for traders who want to start trading cryptocurrencies but do not want “to risk too much exposure.”
“Trading a basket of cryptocurrencies means our users are freed from the hassle of constantly monitoring the markets,” Callan said.
FXCM’s announcement arrived on the day when Pound slipped 0.71 percent against the US dollar. The drop, in turn, came on the back of pessimism surrounding Brexit. European Union’s chief Brexit negotiator Michel Barnier said that UK Prime Minister Boris Johnson’s deal is too complicated and needs more time. That put clouds over Johnson’s promise to deliver Brexit before October 31.
GBP/USD down 0.71% on Brexit Fears | Image credits: TradingView.com
The news erased part of the gains Pound, as well as the UK stocks, had made at the end of the last week. Strategists at ING called the downside correction a “reality check” for Brexit bulls, adding that the sterling is now under threat of a further price breakdown.
“GBP gains have, in part, been caused by meaningful short speculative positioning, exaggerating the effect of the news flow,” they explained.
Holger Schmieding, the chief economist of Berenberg Bank, further stressed:
“Striking a deal in time for the EU summit on 17-18 October and getting it passed by the U.K. parliament in an extraordinary Saturday session on 19 October poses a huge challenge with a highly uncertain outcome, to put it mildly. Also, the EU may need a technical extension to ratify the deal on its side anyway.”
Meanwhile, with Callan mainly confirming on the “risk” part of the bitcoin and other cryptocurrencies, it is safe to assume that FXCM is looking to make CryptoMajor an attractive alternative for CFD traders who might want to ignore Brexit-hit markets.
No Base Currency Specified
FXCM did not reveal the base currency for the CryptoMajor basket in its announcement. The brokerage, which offers three similar baskets, typically uses the US dollar as its underlying currency to value the different assets. FXCM would likely employ the dollar for the crypto basket, considering the brokerage has a presence all across the globe.