- The Cryptoverse continues to spread and will be accessible from WhatsApp.
- Markets speed up the consolidation process and may drop in search of reliable levels of support.
- The next few days could be the last throes of a 14-month bear market.
Crypto goes mainstream – the cryptoverse is spreading to people’s daily lives.
The first initiative comes from WhatsApp. Users of Facebook’s popular instant messaging application will be able to exchange Ether among themselves and other tokens that function over the ERC20 protocol.
The second thing to note is a statement from a former PayPal executive, Dan Schatt, in which he states that stablecoins can facilitate the acceptance of Blockchain technology by the traditional financial system. Stablecoins may function as virtual bridges between the two systems – the fiduciary and the decentralized – can be the gateway to the technology for the general public.
Despite this potential, Vodafone withdrew from Libra’s stablecoin project on Wednesday, although it said it would continue to support it with a less prominent position.
ETH/BTC 4-Hours Chart
The ETH/BTC cross is currently trading at the price level of 0.01938. During the Asian session, Ether lost strength against Bitcoin, something that usually happens when the market falls.
But the fall has no technical impact at the moment, and the previous scenario remains intact.
The EMA50 average loses a bit of tilt and is already heading towards the projection area of the SMA100 and 200.
Above the current price, the first resistance level is at
0.0192, then the second at 0.020 and the third one at 0.0217.
Below the current price, the first support level is at 0.01905, then the second at 0.01877 and the third one at 0.0185.
The MACD on the 4-hour chart is tilting downward and looking for support in the neutral zone of the indicator. At that point, the path taken by the moving averages will indicate the market’s tone for the coming weeks.
The DMI on the 4-hour chart shows a small advantage for bears over bulls, but not enough to give the selling side a victory.
BTC/USD 4-Hours Chart
BTC/USD is currently trading at $8,403 and is losing support of the EMA50. The short term exponential average loses its upward profile and seems to be heading towards the SMA100 level at $8,400.
Above the current price, the first resistance level is at $8,600, then the second at $8,800 and the third one at $9,150.
Below the current price, the first support level is at $8,500, then the second at $8,400 and the third one at $8,200.
The MACD on the 4-hour chart is heading back down, suggesting a bearish test that could drag the price down to $7,800 in the worst-case scenario.
The DMI on the 4-hour chart shows that despite the declines, bears are losing strength while bulls are gaining it. This behavior is divergent with the price and should keep us alert to the chart and flexible to act in case of a sudden change in direction.
ETH/USD 4-Hours Chart
ETH/USD is currently trading at $162.6 and is trading below the EMA50 for the first time since the 13th.
Moving averages continue to trend higher, although the short term exponential is beginning to lose momentum.
Above the current price, the first resistance level is at $167, then at $170 and the third one at $180.
Below the current price, the first support level is at $160, then the second at $155 and the third one at $151.5.
The MACD on the 4-hour chart is sloping lower and is already moving in the neutral zone of the indicator. The MACD on the daily chart is sloping lower and is already moving in the neutral zone. How the current situation will be resolved, either above or below the neutral zone, will determine the development of ETH/USD in the coming days.
The DMI on the daily chart shows bears taking advantage of the bullish trend, although both sides of the market are moving above the ADX line. This setup is conducive to sudden changes in market control.
XRP/USD 4-Hours Chart
XRP/USD is currently trading at $0.2261 and has lost all support from the EMA50 on the 4-hour chart. The exponential moving average is curving downward, and the SMA100 is losing its upward slope, which could signal a wide range of downward movement.
Above the current price, the first resistance level is at $0.2317, then the second at $0.2375 and the third one at $0.2538.
Below the current price, the first support level is at $0.224, then the second at $0.217 and the third one at $0.2100.
The MACD on the 4-hour chart is sloping downward, indicating that the bearish trend is coming to an end. The signal is harmful for the price and suggests a drop in the next few days.
The DMI on the 4-hour chart shows that bears are taking advantage of the bullish trend. Both sides of the market are holding above the ADX line, which would allow for a quick change of scenery and price direction.
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Bitcoin’s continuing growth may resurrect its narrative as transactional currency
While Bitcoin maximalism or favoritism toward any cryptocurrency generally appears toxic and closed-minded, a significant number of people simply don’t want to interact with a complex crypto-environment beyond the original cryptocurrency.
Bitcoin started it all in 2009 and it has facilitated the creation of thousands of altcoins in the years since. On an episode of Messari’s Unqualified Opinions podcast, River Financial CEO Alex Leishman spoke about how Bitcoin is “the one cryptocurrency that has the best chance of becoming global money and a worldwide, agreed-upon store of value.”
“The others just don’t really have the network effect and the technology that the Bitcoin network has,” Leishman said, explaining how River Financial primarily caters to ultra-high net worth investors that mostly don’t know anything about cryptocurrencies beyond Bitcoin.
However, according to Leishman, this isn’t about favoring one cryptocurrency over another. It’s about making things easier for large-scale investors. He added,
“Simplicity is key for attracting this demographic.”
As institutional investors begin trusting the decentralized technology behind cryptocurrencies, it is increasingly important that the crypto-space does not scare off individuals that are ready to invest large amounts of capital.
The financial system has, for aeons, functioned in a certain way and while there is a reason for that to change, institutional investors need to have access to the tools that have always been available to them in the traditional system, if they’re to dip their toes into this asset class.
Further, with most individual wealth in the United States held by family structures, being able to provide the tools to manage that wealth could be growingly important for crypto-adoption.
He added, “For anyone with real amount of money, these things are just par for the course,” he said, adding that the vision here is to bring Bitcoin to the world and to legitimize Bitcoin as money. Leishman also claimed that if people are going to use Bitcoin as money, people need Bitcoin banks.
The River Financial CEO also spoke about how even though the vast majority of people today just want to buy and hold BTC, a solid number of people also want to transact with it — especially institutions.
“As Bitcoin continues to grow, the reasons to use Bitcoin will move more and more from a speculative longterm investment to a transactional currency.”
And, it isn’t just institutions. Regulators also need to be steered through the right narrative and educated about how crypto and blockchain can actually work wonders. Leishman subsequently touched upon how turning every exchange into being part of the surveillance dragnet is “a huge mistake” which would not end well for the United States.
People view cryptocurrencies as a combination of complex finance and computer science, both of which are hard things to understand for the average user. Though a maximalist approach probably isn’t the best way to on-board new users, a simpler introduction to the space could facilitate an influx of users that are ready to invest, but aren’t entirely sure about where to start.
Bitcoin’s collateral position in DeFi is not a threat to Ethereum’s throne
After recently locking down over a billion-dollars worth of digital assets in DeFi, it is safe to say that Ethereum’s decentralized finance applications are making a name for themselves in the lending market of digital assets. Ethereum is currently the largest form of collateral in the DeFi medium, but with growing interest, other assets are now being taken into consideration for collateral.
According to skew.com, the amount of WBTC or Wrapped Bitcoins has been increasing and at press time, it was closing in on Lightning’s capacity. WBTC is an ERC20 token which is based on Ethereum 1:1 pegged with Bitcoin. The main objective behind developing WBTC is to bring Bitcoin’s liquidity into the ETH blockchain, with the attached chart indicating that BTC collateralized for loans is steadily increasing in DeFi.
At the moment, 1.8K BTC was locked in DeFi through WBTC and Lightning, increasing from 1.45K in January.
MakerDao’s ‘multi-collateral’ or MCD system was also developed to increase the number of collateral assets, while reducing sole dependence on ETH. Such a scenario appeared relatively important as an increasing number of assets would allow the tokens of all measures to be used to generate loans.
However, according to Nick Cannon of ethereumprice.org, in spite of the integration of other collateral assets, Ethereum‘s dominance on the DeFi network will remain unrivaled. In a recent newsletter, Cannon explained that ETH’s stronghold on DeFi would not be competed against because Ether is Ethereum’s native asset which is directly ingrained into the protocol. All the other underlying assets need a form of smart contract between the protocol and blockchain, something that may lead to more potentially exploitable bugs, like the one which caused the bZx hack last week. He said,
“While many are excited for the introduction of Bitcoin on Ethereum, the same criticism will apply. Nothing can beat ETH’s monopoly on trust, making it the most desirable form of collateral on Ethereum.”
It can be argued that there is some truth to the statement as other collateral assets that are part of MCD haven’t made striking changes. MCD added Basic Attention Token and after 4 months in circulation, it only accounted for 1.36 percent of the loans created, while the rest were all generated by ETH.
Why the analyst who called Bitcoin’s crash to $3,000 believes market could crater
Despite the short-term volatility Bitcoin has faced, the cryptocurrency has held up surprisingly well, holding the crucial $9,500 support on a daily and weekly basis as if its life depended on it.
A number of prominent analysts, such as Filb Filb, have argued that BTC’s ability to maintain a price above $9,500 is a clear-as-day sign the cryptocurrency will continue higher in the coming weeks.
Though the next leg higher that investors across the board are waiting for may not happen, a top analyst with a quite accurate track record has recently warned.
Litecoin is flagging, suggesting BTC may soon fall too
In an analysis published Feb. 23, amid Sunday’s brief market recovery that took Bitcoin above $10,000, analyst Smart Contracter warned of impending market weakness.
He noted that Litecoin’s recovery on the weekend felt like a “wave B” to me, which per Elliot Wave theory, should be followed by a “wave C” retracement that is likely to bring the cryptocurrency to $59 — 20 percent lower than the current price of Bitcoin, and around 25 percent lower than the asset was trading when Smart Contracter published the below analysis.
This is relevant for Bitcoin because LTC has long acted as a pseudo-bellwether for the rest of the cryptocurrency market.
The most memorable case of this was in the first half of 2019, which is when LTC started rallying dozens of percent higher week over week while Bitcoin flatlined around $4,000. For around two months, the asset rallied on its own, then was followed by BTC and the rest of this nascent asset class.
Litecoin’s ability to precede the rest of the market is important because it suggests that should LTC start crash here, so too should Bitcoin.
While many crypto investors are skeptical of the validity of Elliot Wave analysis, Smart Contracter has a strong track record in analyzing the ever-volatile cryptocurrency markets, giving credence to his commentary.
In the middle of 2018, when Bitcoin was in the midst of a bear market, Smart Contracter revealed at which point he expects BTC to bottom, writing:
“I’m calling a bottom at exactly 3.2k with a 200 dollar leeway either side.”
By the middle of December, his forecast was proven to be right when Bitcoin plunged from $6,000 to a low of $3,150 over the span of a few weeks, then established a macro bottom at that level.
While Smart Contracter is warning of blood in the streets in the short term, he is bullish on Bitcoin (and presumably other cryptocurrencies) from a longer-term perspective.
Late January, he posted the below chart, remarking that Bitcoin is in the midst of a five-wave rise from the $6,000s.
His Elliot Wave analysis suggests that Bitcoin has a high likelihood of breaking $14,000 — 45 percent above the current price point of $9,600 — by the middle of 2020, likely around or just after the time of the block reward reduction in May 2020.