The cryptocurrency space is so full of speculators that some people don’t even understand (or forget) why cryptocurrencies have a fundamental/intrinsic value for many more.
CIUDAD GUAYANA, Venezuela — On Tuesday, I went shopping for milk. With the chronic food shortages in Venezuela, that errand already is very complicated, but there’s an extra layer of difficulty for me: I don’t own bolívars, Venezuela’s official currency.
Living in countries where the economy is collapsing and the most reliable way for people to save some of their funds is running out of the banking system should be enough for a Nobel Prize. Obviously Bitcoin volatility is still high but we are very far from Mass Adoption (and price stability) but when this will be achieved we can foresee a few “stable coins” not pegged to USD or whatever but stable because many will use them as main currencies.
The current banking system is dying and they know it or they wouldn’t adopt or ban cryptocurrencies… In 50 years no one will remember what bank notes are, in 20 years everyone will have some cryptocurrencies and/or tokens no matter how they use them.
Early last year, he started doing graphic design and translations online. But most websites pay for freelance work through PayPal and the like, which we can’t use because exchange controls here allow Venezuelan banks to use only local currency. (For the outside world, even those of us who have bank accounts here are effectively unbanked.) So Juan had to turn to cryptocurrencies to get paid.
Thanks to those earnings, he started thinking about leaving Venezuela. He was able to buy what he needed for the trip to Colombia: clothes, a backpack, a smartphone. He put some money aside. He even gained a little weight, an anomaly around here these days.
Cryptocurrencies also helped him during the four-day trip itself. Venezuelan military personnel at the borders have a reputation for seizing the money of people who want to leave, but Juan’s, being in Bitcoin, was accessible only with a password he had memorized. “Borderless money” is more than a buzzword for those of us who live in a collapsing economy and a collapsing dictatorship.
Following our last post we saw the expected pullback (sooner and quicker but still expected). Total Market Cap is now testing the support mentioned and for any Bullish continuation we need to stay above 125B Market Cap and also above the 50MA (yellow). If we have a confirmation on this line turning into support (as it seems) we may break the green broadening wedge sooner than later nevertheless if we fail we need to consider a test of the previous low or even a new lower low.
BTC is also holding where it should and the assumption is the same… we need to hold this levels for more upside action.
Total Market Cap is looking better but we need to stay very cautious trading this bottom. At the moment we have an impressive volume pushing us in the right direction, we started breaking some resistances, some alts already broke their downtrend and it seems that the buying pressure may increase as alts will start retracing (providing better entry points than now) nevertheless nothing is granted.
I’m looking for a confirmation of an Adam and Eve bottom (even if the Eve low is 10% above the Adam low, not really perfect) expecting that should push us out of the broadening wedge (green lines). It may happen soon or not but a pullback from here is quite expected. Using the Total Market Cap we may pullback 10/15% but better not to fall more than that or we may move below our supports (yellow and blue lines) invalidating a move higher in the short term.
Using the VPVR (Volume Profile) we have almost no price action between 150B and 170B, meaning this range can easily be skipped by buyers and sellers, nevertheless we have the 200 Daily MA playing as resistance. Usually we expect some support/resistance from the 50MA and 200MA but breaking them easily also happens often as we can see recently with EOSUSD but sooner or later a retracement happens.
For any MA to be a strong Resistance or Support it needs multiple testes and failures. For instance on EOSUSD the 50MA and 200MA are very far from each other and the 50MA is still below the 200MA, so the 50MA will be our next support and the 200MA will remain the resistance (even if it broke, it will likely not last longer).
Some new traders/investors will probably focus on USD prices and even experienced traders will sometimes “ignore” other pairs nevertheless we always need to keep an eye on every cross pair available since they all have relevance at some point. Also considering this we may even play with some strange pairs just to find out if any correlation exists.
We could work with many examples but for clarity let’s focus on LTC. In the next chart we can see LTCBTC in yellow and LTCUSD in blue. When BTC is in a Bearish Market for a longer period (2014 and 2018) all alt coins usually follow that price action. Funds move from alts to BTC and fiat currencies (or other stable coins) pushing alts lower and lower but when the trend/market gets Bullish, BTC pairs can enter in correction phases while USD pairs remain quite stable for a longer period. Even in Bull markets the USD and BTC price can fall from time to time but not as much as in a Bear Market. For instance, from July 2015 to February 2017 LTCBTC lost value but LTCUSD consolidated because BTCUSD was slowly increasing in value.
In Bull Markets we have periods when BTC pairs get dormant or lose value because funds start moving/rotating between alts. To understand this rotations we need to look for potential tops and bottoms on cross pairs. Looking at the LTCBTC we can clearly see where LTC lost or gained traction but we also see some interesting things if we use the LTCETH pair (blue line in the chart below).
In fact, we notice an ascending channel on LTCETH for the last two years and also that every time this pair tested the top of the channel LTCUSD started a new consolidation or correction some weeks after.
Ethereum is one of the most relevant cryptocurrencies for many reasons, some may argue that EOS, Tron, Ada, NEO or whatever are better versions but none of them have the community Ethereum has. The amount of resources and developers using Ethereum is just impressive and not matched by any other project (not even Bitcoin). Nevertheless charts don’t care about such things…
ETH/BTC Monthly Chart clearly shows a major correction in ETH history. Since inception ETH formed a nice uptrend broken in this Bear Market but the good news is that ETH/BTC finally seems to be pushing above the support. If ETH remains above 0.035BTC for this month we may even retest the top of this TR (Trading Range) this year. Probably sooner than later but we have at least two major resistances, one between 0.04-0.045 and one more near 0.07, each one if and when broken should trigger more FOMO.
Zooming from the Monthly to the Daily we have this very interesting break and we may also have a Golden Cross (50MA – yellow, crossing the 200MA, red)…
Monthly charts are so underrated lately, I need to publish one…
At the moment we have a
local Bottom in formation entitled Support 2. This Support may be the Bottom of
the Bearish Market or not but keeping an eye on this should be valuable.
As a side note, notice that one of the major differences between this Bear Market and the one we saw in 2014 is the fact that we don’t have a mid Support between Support 1 and Support 2 since the fall from the top of the channel pushed us directly to the bottom. Nevertheless we have a support/resistance around 4800 made previously (while the market was still Bullish).