Bitcoin Cash has been moving steadily down the charts over the past few days, with BCH likely to see more of the same in the near-term. While a break out of its downtrend was possible in the coming days, the same wasn’t visible on the charts yet. Finally, Algorand’s market appeared undecided in the short-term, while DigiByte was set to register northbound movement.
Bitcoin Cash [BCH]
While Bitcoin Cash was moving within a descending channel (white), its trading volume has remained fairly constant over the past few days. This suggested that the cryptocurrency’s price would continue to move in the same direction.
A retest of the channel’s upper boundary should be looked out for as it could potentially be where BCH reverses its short-term downtrend.
Further, the RSI was observed to be slightly below 50, a sign of weak bullish momentum over the past few days.
At the time of writing, Bitcoin Cash was scheduled to undergo its six-month upgrade, one that could result in a hard fork if the community was unable to meet consensus requirements.
Algorand formed a symmetrical triangle pattern (blue) on the charts, with its trading volume trending lower too. A close above the pattern could see ALGO climb to $0.29, while a close below could see it test the support at $0.25, before possibly dropping even lower.
The OBV was a bit inconclusive about the near-term trend. Since early-November, it has registered higher lows, yet there have also been some sharp dips after a higher high, signs of strong sellers in the market.
The long-term trend has been to the downside, and the $0.29-level has acted as stiff resistance over the past two weeks, making it likely that any surge towards that level would face rejection.
A bullish divergence was noted (white) between the price and momentum for DGB. The crypto-asset had recently lost its level of support at $0.02 and was on a strong downtrend.
Hence, this bullish divergence was likely to see a bounce in price. It could test the level at $0.02 and confirm its flip to resistance, or a region of supply may be found at $0.0198 for DGB.
It can be expected that, after this bounce, a move south would commence.
Why this on-chain analyst thinks Bitcoin whales aren’t institutions
While most had high expectations from the crypto-market for the year 2021, it’s safe to say that the market has well and truly exceeded these expectations. Not only did the world’s largest cryptocurrency, Bitcoin, breach the $40,000-mark, but the industry’s cumulative market cap also went past $1 trillion.
The market and its largest cryptocurrency’s movements make for interesting reading, especially when its charts are observed. In fact, price charts noted an almost vertical movement by Bitcoin, suggesting that this bull run has far outpaced the bull run of 2017.
In such a case, the common perception is that the reason Bitcoin has seen such immense buying power is because a majority of this buying has come from institutions. The same sentiment was highlighted recently by Anchorage Co-founder Diego Monica who, while noting that institutions have more tolerance for volatility and are professional investors, said,
“This rally is absolutely followed and made by the institutions.”
As a result of this, investing in Bitcoin becomes less about following a fad and more about making an allocation to an uncorrelated asset class for purposes relating to capital preservation and appreciation. In fact, many have suggested that at current price levels, Bitcoin might even be too expensive for non-institutional investors to enter the market.
However, on-chain analyst Willy Woo isn’t so sure that this bull run is solely institutionally-driven. On a recent episode of the Unchained podcast, he said,
“We thought it would be, and right now the thing is, I don’t actually think that it is.”
According to Woo, Bitcoin’s bull run is being driven by the institutional narrative of institutions getting behind the idea of Bitcoin and crypto. While institutions have been suggesting that they are going to deploy funds, the majority of them are still yet to do so, he added.
In fact, it may be this validation from institutions that brought in many high net worth investors to this space, with family offices buying in at higher price levels.
Whale spawning season is here. (1000 BTC or more).
Very high net worth individuals are coming in, in droves.
This cycle is unlike any we’ve seen before. pic.twitter.com/ea2Slqq9wH
— Willy Woo (@woonomic) January 14, 2021
Woo explained that a combination of things has contributed to his certainty about family offices making capital allocations towards crypto, including first-hand conversations with people in the space disclosing their intent to do so.
That being said, the main part of such certainty comes from his observation of capital flows on-chain. He explained that the value of withdrawals on exchanges is increasing, which at first glance, seemed to signify that institutions are present. However, a closer examination of clusters of wallet addresses pointed to the fact that a single entity controls multiple addresses.
“It’s not corporation scale where you’re talking tens of thousands of Bitcoin that are being held,” he claimed, adding, “The number of whales holding thousand Bitcoins or more is skyrocketing, and so are the smaller allocations of around 100 and 250.”
EOS, BAT, Dogecoin Price Analysis: 16 January
EOS‘s market noted some bearish presence, with the same likely to push the crypto’s price slightly south towards $2.6. Basic Attention Token appeared to break out of a range backed by significant trading volume, while Dogecoin was in a phase of consolidation and traded sideways on the charts with no strong momentum.
The RSI floated just under the neutral 50 value, unable to rise above and likely indicative of a downtrend to come. The price, more importantly, flipped the $2.73-level to support recently and attempted a surge towards the next level of resistance at $3.
This session (cyan) saw the market’s bulls drive prices as high as $2.93, but the bears stepped in and pushed the price down to test the support at $2.6. This highlighted a lack of bullish strength.
Their presence in the market is poised to be highlighted once more. It can be expected that EOS would slowly descend towards $2.6 once more. If it does not hold as support, the price could drop to $2.44 in the coming days.
In other news, Arca CIO Jeff Dorman tweeted that EOS could be undervalued due to its massive BTC holdings.
Basic Attention Token [BAT]
The range between $0.27 and $0.2 is one that BAT has traded within since late November. On the 6-hour charts, it appeared that BAT was headed for a breakout above this range. The trading volume for the most recent session before press time was extraordinary, pointing towards market conviction.
The MACD formed a bullish crossover and rose above zero to highlight bullish momentum. However, the $0.292-mark continued to be a thorn in the side of bulls and can be expected to stall the rise of BAT’s price.
Another rejection at $0.292 could see BAT tumble sharply back within the range it was trading within.
After its explosive move from $0.0045 to $0.01, DOGE spent the past few weeks in a phase of consolidation. Using the swing high and low of this phase for DOGE, and Gann’s rule of eight, some potential levels of support and resistance (yellow) can be plotted on the charts.
It can be seen that DOGE has respected these levels. The Awesome Oscillator showed a lack of definitive momentum in either direction for DOGE.
Monero, IOTA, DigiByte Price Analysis: 16 January
Monero slipped from $173 to test the $149-level of support over the past few days and was trading at an important level as the market’s bulls and bears tussled for control of the market. IOTA formed a bullish pattern on the charts and could see a bullish breakout targeting $0.55. Finally, DigiByte noted some early signs of heading towards $0.022 once more.
Over the past few days, Monero has been rejected at the $173-level twice. The $164-level, which is both horizontal support as well as the 38.2% retracement level, failed to hold on as support as the price dipped to $156.
This represented a 50% retracement for XMR, with the same enjoying a confluence with the 50 SMA (yellow) as a region of support. Hence, the reaction of XMR at this level will dictate its short-term movement.
A close beneath $156 will likely see it headed towards the $149-support once more, while some sideways trading at this level could see a move back towards $164.
IOTA formed an ascending triangle (white), a bullish pattern that generally sees the price break out to the upside. The cryptocurrency’s price consistently made higher lows over the past few days, and the MACD agreed as it noted bullish momentum.
A breakout will see IOTA climb towards the $0.55-level of resistance over the coming days. On the other hand, a trading session close beneath the rising trendline will indicate that IOTA is poised for a drop to $0.37.
The RSI showed that momentum was neutral for DGB with a value of 47. However, it had just tested neutral 50 and was unable to rise past it. This was indicative of a possible short-term downtrend on the charts.
It was trading within a range from $0.022 to $0.032 whose mid-point was at $0.027. The mid-point, alongside historic support and resistance levels, were the levels of importance for DGB, at the time of writing.
Since DGB had slipped below the mid-point, it can be expected to test the $0.025-level of support. Losing this region would strengthen the case for DGB testing $0.022 shortly.
3iQ’s The Ether Fund begins $CAD trading on TSX after Bitcoin Fund’s $1B milestone
Canadian investment fund manager 3iQ is in the news today after it announced that its Ether-based fund, The Ether Fund (TSX: QETH.UN), is now quoted in Canadian dollars on the Toronto Stock Exchange (TSX).
The development in question comes on the back of The Ether Fund receiving overwhelming demand from investors after the fund’s successful IPO on the Toronto Stock Exchange. It was welcomed by Fred Pye, Chairman of 3iQ, who said,
“Finally, Canadian investors have the opportunity to trade The Ether Fund in their native currency and through their locally dominated accounts.”
According to a report from 3iQ, the fund makes a 99.9% allocation towards the digital asset and only a 0.01% allocation towards the USD, giving investors a considerable amount of exposure to ETH.
Most investors see this fund as a suitable alternative to direct investment in ETH, seeing as their long term capital appreciation can be realized through Canadian-registered accounts RRSP and RRIF.
This kind of regulated exposure to a different type of asset class on a major stock exchange provides financial advisors and institutions with a way to make allocations towards cryptocurrencies.
Ethereum [ETH] is the world’s second-largest cryptocurrency by market cap, with the altcoin trading at around $1,200, at the time of writing. While ETH was still some away from breaching its ATH of $1,448, on-chain metrics suggested that the altcoin may soon be on its way.
BTC = ETH. Fact. Different assets, different ecosystems, same adoption, same behavioral economics = same same but different… pic.twitter.com/zeMyoDlX88
— Raoul Pal (@RaoulGMI) January 7, 2021
In fact, long-term price predictions for the digital asset have been extremely bullish, with Global Macro investor Raoul Pal being one of those to make such predictions. According to Pal, based on Metcalfe’s Law, ETH could go on to hit a new all-time high close to the $20,000-mark.
It should also be noted that 3iQ was the first investment manager approved by the Ontario Securities Commission (OSC) to act as an IFM/PM of multiple crypto-assets in Canada.
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