HIGHLIGHT FROM LAST WEEK

  • As we predicted last week, BTC has entered a tough consolidation zone just above $10,000 which rings a positive tone for the asset as it hasn’t dropped to its major support levels of $9,000.
  • As discussed last week, the S&P 500 was more likely to break its support levels of its All-time high zone which played out perfectly. We expect this volatility to continue up to the US Election in November.

Weekly Cryptocurrency Analysis – 12 to 19 September 2020

our forecast

  • Gold and BTC correlation touches all time high levels after S&P 500 corrected further from its all-time high levels which is positive for BTC as it defines BTC as a store of value- similar to Gold.
  • The number of BTC holders have reached an all-time high figure which signifies that the number of people accumulating BTC has increased and people, rather than selling, are accumulating at these levels.
  • We have spotted an Inclining wedge pattern on 1 Hour chart of BTC which indicate a bearish sentiment for the asset, along with large formed between the 3 significant moving averages (7,25,99) which historically has proven a bearish outbreak.
  • We have addressed a major issue which a lot of investors face, is regarding the security of storing assets on an exchange and what should a crypto investor look at before signing up and transferring crypto funds onto an exchange.

1. Market Review and Developments

  • Bitcoin and gold correlation hits ATH

In light of recent events with the dollar index recovering back from its recent 7 year low support and at the same time S&P 500 correcting from its ATH levels which saw a decline in prices for both the assets (BTC and Gold). However BTC-Gold correlation increased which is always good for BTC as it was marking itself into a category of “Store of Value”.

  • Number of BTC Holders Growing

As per data from GlassNode, the number of Bitcoin Address holding more than 0.1 BTC has reached an all-time high and crossed 3 million in total. Which basically indicates that a lot of accumulation is happening and despite the fact that the market is falling people are not selling in large numbers. The growth of the number of BTC addresses can be correlated with the current monetary policies in place across the world and the absurd FED printing going on with the US elections around the corner. All these factors have led to a high number of accumulating wallets.

  • Kramer Buys BTC

Bitcoin Bull Anthony Pompliano convinced world famous CNBC TV Anchor Jim Kramer to Buy Bitcoin. POMP stated in his tweet that the person who earlier called “Bitcoin Monopoly Money” has purchased BTC for an undisclosed amount. POMP tweet was immediately retweeted by Kramer who is scheduled to release his Podcast on 14th September and who has now openly stated that BTC price could reach $1 Million. 

2. Technical Analysis

Inclining wedge pattern spotted. Possible bearish week ahead?

 

  • By looking at the hourly chart, we noticed an inclining wedge pattern, which is opposite to the declining wedge patter that was spotted by us in the month of July before the bulls took over.
  • With inclining wedge patter, if the support line (Bottom line) is broken, BTC price can slide to levels of $9500-$9700 and start consolidating.
  • With declining volume in place, it will be interesting to see how BTC reacts to this pattern, or it might just be a false formation- only time will tell!

MA (7) – PINK, MA (25) – RED AND MA (99) – LIGHT BLUE. GAP FORMED

  • Previously when there was a gap being formed between the Three moving averages, the asset saw a large decline in the prices and corrected by almost 20%.
  • The gap can be seen right now but the economic scenario doesn’t support such a correction to take place.

 

Possible Outcomes

  1. The asset corrects to its support levels of $9000 immediately and then consolidates until the Moving averages converge together.
  2. The asset consolidates at current levels and wait for the moving averages to converge before making the next big move (Up or Down)
  3. The asset see’s high volume buying and climbs up to its resistance levels of $12000 and consolidate until the dust settles (Only because of the current economic conditions in place).

3. Should you trust an Exchange with your money?

  • With the recent events that took place in the crypto world, it is 100% sure to say that staking crypts or storing cryptos on an exchange is relatively risky. As the saying goes in the crypto community- if you don’t have the private key you don’t have the coins.
  • A regulated European exchange, Eterbase, was compromised by hackers gaining access to hot wallets (online connected wallet) as users keys were stored on the network. The hackers managed to escape with $5.4 Million in BTC.
  • A London based crypto currency exchange Cashaa lost $3.1 million in July due to hacking of their hot wallet. Even though their hot wallets were protected by one of the largest companies in the blockchain space, Blockchain.com.
  • Many Asian exchanges suffered heavy losses like Japan’s Bitpoint lost $32 Million, Upbit lost $52 million along with Zaif which lost $60 million.

What should the user do?

  • User should be aware how the exchange is handling their funds. What percentage is stored between hot and cold wallet.
  • Generally, cold wallets also known as custodian wallets have insurance upto US $100 million (BitGo) which is a very safe option and defines the authenticity of the exchange.
  • The user should also check how often the exchange is being audited in terms of cyber security and how successful is the bug bounty programme for the exchange.
  • The user should mostly only store the amount that he/she wishes to trade on the exchange and not use the exchange as a crypto storage facility.

Our Prediction- 30% Bullish and 70% Bearish (Expect consolidation)

WRITTEN BY

Devnsh Khullar | Co-Founder, AiNALYTIX

Using the power of Artificial Intelligence and Quantum computing, AiNALYTIX (AiX) is able to provide various indicators and instruments, including their proprietary the Alpha Signal Generator (ASG), to generate a significant edge in the Cryptocurrency and Stock markets. 

WRITTEN BY

Devnsh Khullar | Co-Founder, AiNALYTIX

Using the power of Artificial Intelligence and Quantum computing, AiNALYTIX (AiX) is able to provide various indicators and instruments, including their proprietary the Alpha Signal Generator (ASG), to generate a significant edge in the Cryptocurrency and Stock markets. 

CONTINUE YOUR LEARNING

Previous
Next