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Crypto Market Analysis: 4th January 2021

In traditional markets, the S&P 500 remained steady throughout the week, finishing on 3,722. In Europe, the STOXX 600 rose marginally, finishing the week on 395. And here in the UK, it was a different story, with ongoing Brexit negotiations and the uncertainty surrounding No Deal sending jitters through the FTSE All Share; it finished […]

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In traditional markets, the S&P 500 remained steady throughout the week, finishing on 3,722. In Europe, the STOXX 600 rose marginally, finishing the week on 395. And here in the UK, it was a different story, with ongoing Brexit negotiations and the uncertainty surrounding No Deal sending jitters through the FTSE All Share; it finished the week on 3,685.

In crypto markets, there was a little more movement. Bitcoin flew to an all-time high of $23,586. Some altcoins also experienced positive movement, with Ethereum hitting a 7-day high of $673 and Litecoin remaining solidly above the $100 level.

Simon Peters, analyst, eToro: Bitcoin blasts through barriers aplenty

I’ve mentioned previously that I could see us breaking $20,000 before the end of the year. That has now come to pass, and in quite extraordinary fashion, bitcoin flying through $20,000, $22,000 and then $23,000 in just 24 hours. We are now hovering around the $24,000 level following a further price move over the weekend.

Despite a large number of sell orders on exchange order books at the $20,000 level, bitcoin still flew through what was previously a significant resistance barrier. I wouldn’t have been surprised if the price had hung around $20,000 for longer but the bullish trend was clearly snowballing. Bitcoin didn’t even stop to say hello to $20,000 as it headed straight to $23,000.

We saw a record trading day on eToro last Thursday in terms of the number of people holding bitcoin, which is now up 30% from the start of the year. Also on Thursday, for the first time in 5 days, there were more positions opened than closed, indicating that the market sentiment is now becoming more bullish than at the start of the week.

Now we’ve set a new all-time high, we’re in price discovery mode, who knows how far the price can still go before the close of the year. With that said, and given the price increase we saw last week, a period of consolidation could be beneficial to bitcoin price, allowing things to stabilise and cool down before another potential price movement higher. 

David Derhy, analyst, eToro: Waking up to tokenisation

Last week, digital asset firm Sygnum announced that it will be offering its own shares in a tokenised format, accounted for on a distributed ledger. We have mentioned the distribution of shares in this format previously, and I believe that tokenisation is one of the next steps towards a truly digital world.

An instantly redeemable and highly liquid token clearly has benefits over a traditional ‘paper’ stock. It would work just as well for a small business with a lower market cap as it would for a larger one with an enormous market cap, which in traditional markets would not see a comparable level of liquidity.

We are still in the early stages of this technology, and so the difficulty now is the connectivity between brokers and wallets. Plus, there still remains the issue that regulation has not yet caught up to the concept of tokenisation, although it is on various regulators’ radars. Andrew Bailey at the Bank of England discussed in September the topic of tokenisation and stablecoins.

Simon Peters, analyst, eToro: Stimulus helps stimulate bitcoin growth 

The US and Republicans finally approved its $900bn stimulus bill on Friday, with each citizen set to receive $600 as well as support for small businesses. With the European Central Bank also approving a fresh round of measures to support its members through the Covid-19 pandemic, ‘stimulus’ has been the buzzword for central bankers this year, whether they like it or not.

Continued injections of capital into the global economy have also helped stimulate the bitcoin price, which has been performing well on the back of this central bank support. Businesses and investors of all sizes are looking at bitcoin due to its much-celebrated inflationary hedge characteristics. And even though we might not see an actual inflation rise around the world (it seems to be remaining stagnant), investors are not willing to take that risk.

Santa leaves a bitcoin all-time high under the Christmas tree 

As this is the last newsletter of 2020, we’d like to take a moment to wish everyone a happy and safe holiday season. It’s been a bumper year for bitcoin and ethereum in particular, and we expect even more in the next twelve months. See you in 2021.

This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as a reliable indicator of future results. 

All contents within this report are for informational purposes only and does not constitute financial advice. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly-available information.

Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk.

 Image by Alberto Barco Figari from Pixabay

Source: https://www.newsbtc.com/etoro/crypto-market-analysis-4th-january-2021/

Blockchain

65% Say They Would Consider Selling Bitcoin If The Price Reaches $100,000

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The cryptocurrency market has enjoyed the past several months with impressive gains, including all-time highs for bitcoin and several more tokens.

As such, a couple of crypto analysts initiated Twitter polls to ask the community when they plan to sell their positions and realize profits.

How Much Would You Sell At The Next BTC Top

The primary cryptocurrency has led the 2020/2021 bull run. Bitcoin had quadrupled its value since early October when it dabbled with the $10,000 mark to an all-time high of $42,000 charted earlier this year.

Despite retracing with a few thousand dollars, BTC is still about 10% up in 2021 alone. This has raised discussions within the community if or when most plan to dispose of some of their holdings.

Crypto analyst Josh Rager took it to Twitter to ask: “how much Bitcoin from your holdings do you plan to sell at the next peak high?”

Interestingly, the answer that received the most votes (34.4%) suggests that investors plan to dump most, if not all, BTC holdings in case of another price peak.

However, it’s also worth noting that a very close percentage (31.6%) said that they would sell less than 25% of the BTC positions.

While some comments indicated that many investors plan to hold their coins even beyond the next peak, others noted that each cycle has its top and subsequent retracement. Consequently, they advised even the most die-hard HODLers to consider profit taking at some point.

At What Price Would You Sell?

Another poll initiated by the popular analyst Filb Filb shed some light on the price targets that BTC investors are looking for to sell.

The majority of the participants noted that they would start to “think hard about selling some bitcoins” once the asset price goes into a six-digit territory. Over 40% would do that at prices ranging from $100,000 to $300,000, while 26.3% would wait to see BTC beyond $300,000.

However, Nugget News’ Alex Saunders opposed the idea of expecting a fiat price to sell the BTC holdings, especially during these times of economic uncertainty:

“Those who fully understand Bitcoin know there is no fiat price you should sell for if they are increasing M1 & M2 by 30% unless you absolutely must purchase something tangible that is of great value to you personally.”

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Source: https://cryptopotato.com/65-say-they-would-consider-selling-bitcoin-if-the-price-reaches-100000/

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Why Bitcoin denominated payments won’t be mainstream anytime soon

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The support of top payment giants like PayPal is promising for building the case of mainstream Bitcoin payments. However, Bitcoin’s rapidly increasing price in the USD poses a tough challenge for the adoption of Bitcoin denominated payment systems. A number of altcoins are rallying alongside Bitcoin, and making payments in cryptocurrencies may not be the preferred choice for many. Just as Nic Carter, Partner at Castle Island Ventures puts it in his talk with Frances Coppola, renowned economist, and author, “I always regret it when I buy stuff with Bitcoin”. With returns of nearly 27.6% YTD, Bitcoin payments may not pick up anytime soon. Denominating Bitcoin in the USD makes it a lucrative investment opportunity and limits its adoption to traders and investors looking at it as a wealth-generating high-risk, high-ROI asset. This limitation is sure to hinder the adoption of Bitcoin denominated payments. 

The volatility and network momentum that is critical to Bitcoin’s adoption is a double-edged sword. The same volatility that is increasing the price, is making it less lucrative for traders and individuals to part with their Bitcoin. Through active involvement and buying from institutions, the bull run may receive boosts from time to time, however, the impact may end there. With regard to Bitcoin’s growth, this may not be the ‘Eureka’ moment that maximalists and proponents have waited for. It is more likely that the current price rally is an incentive to trade and adopt, however, adoption may be the game-changer. 

Currently, the number of transactions has exceeded the monthly volume since January 2017 based on data from Statista. 

Why Bitcoin denominated payments won't be mainstream anytime soon

Number of Bitcoin Transactions/ Monthly transaction volume || Source: Statista

The chart shows that the number of transactions in January 2021 has exceeded that of the past 3 years since January 2017. However, even the current transaction volume is nowhere close to the expected transaction volume. When mainstream adoption kicks in, transaction volume and price may no longer be significant metrics, as more critical metrics like transaction processing time, settlement time on exchanges, deposit and withdrawal time to and from wallets would be of greater significance. Until then, Bitcoin’s mainstream adoption may be a pipe dream. 

Source: https://ambcrypto.com/why-bitcoin-denominated-payments-wont-be-mainstream-anytime-soon

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Cardano, Cosmos, BAT Price Analysis: 17 January

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Cardano flipped the $0.32 to support and showed that it was on the verge of breaking past $0.385 resistance as it neared its 2-year highs. Cosmos posted rapid gains over the past few days and was retracing some of those gains. Basic Attention Token was rejected once more at a level of resistance that has been steadfast since late November.

Cardano [ADA]

Cardano, Cosmos, BAT Price Analysis: 17 January

Source: ADA/USDT on TradingView

The price of ADA has grown enormously over the past month as it nears highs last seen in May 2018. The $0.385 level can be expected to offer resistance.

A double-top formed in the region of $0.32 saw ADA initially rejected a week ago, but since, the level has been flipped to support. The Directional Movement Index showed that a strong uptrend was on the verge of being established, as the ADX crept up toward the 20 value.

In other news, Charles Hoskinson commented on Jack Dorsey’s Twitter post about a decentralized standard for social media and expressed that the crypto sphere could contribute value.

Cosmos [ATOM]

Cardano, Cosmos, BAT Price Analysis: 17 January

Source: ATOM/USD on TradingView

ATOM formed a rising wedge, and closed beneath it to test support at the $5.2-$5 region, and saw a strong surge thereafter. It reached a local high of $9.6 rapidly but might be forced to retrace some of those gains.

The Fibonacci retracement tool showed that the 38.2% level at $7.48 is in close proximity to the $7.5 region that has previously acted as a pocket of liquidity. There is also the $7.8 level of support immediately above to halt selling pressure.

The MACD, which had been strongly bullish over the past week, might soon see a bearish crossover form to indicate short-term bearishness.

The $7.8-$7.5 region is of vital importance. Defense of this region will pave the way for a move to the upside while losing this region will see a further retracement to the $6.9 level.

Basic Attention Token [BAT]

Cardano, Cosmos, BAT Price Analysis: 17 January

Source: BAT/USD on TradingView

The $0.27 has been a level BAT has failed to flip to support since late November, despite testing it several times. The range formed (cyan) grows in importance the longer BAT trades within it.

The past few trading sessions saw a strong surge just past $0.27, but subsequent selling pressure forced the price back beneath and indicated yet another rejection. This development points at a move back toward the mid-point at $0.232 for BAT.

The Stochastic RSI and the RSI were dropping lower at the time of writing.

Source: https://ambcrypto.com/cardano-cosmos-bat-price-analysis-17-january

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