We’re back to bring you your regular weekly DSX crypto market outlook. In this weekly article, we look back at last week and what’s coming up in this one. We’ll analyse some market events and include some in-depth price analysis on some of the hottest trading pairs. Ready to go? Let’s jump in!
Market Highlight — What’s Really Behind Bitcoin’s Latest Rebound?
Like many things in life, crypto has some grey areas. What causes Bitcoin and the wider crypto market to act as it does is a question with a lot of grey areas. Today, we’ll try to explain two potential ones which may help you when conducting your own market analysis.
1. Rising Hash Rate
A higher Bitcoin hash rate, which rises as more miners add their computing power to the Bitcoin network, means a greater degree of network decentralisation. Over the past week, the Bitcoin network has gained so many new miners that the hash rate has hit record highs.
Some suggest that this might be the main reason that Bitcoin has risen in value by 10% so far this month. If true, this has profound implications as it potentially casts doubt on Bitcoin's growing reputation as "digital gold."
Bitcoin's network hash rate has previously correlated quite well with its price. However, the so-called Crypto Winter of late 2018 and early 2019 showed a low hash rate, since then the rising hash rate has far outweighed the increase in price.
2020 will be a test for many Bitcoin miners. Bitcoin's halving event in May or June will see the block reward cut to 6.25 Bitcoin, down from the current 12.5 Bitcoin. Some expect that event will send prices higher, though there's absolutely no guarantee of that.
Other Bitcoin and crypto analysts are less confident that the recent rise in BTC’s value has anything to do with the technicals of Bitcoin’s blockchain, some of them believe that the crypto is now keyed-in to the ups and downs of global politics, much like traditional commodities, e.g. gold and oil, etc. Proponents of this argument declare that BTC has become a safe-haven asset.
Evidence in favour of this argument can be seen as recently as last week, with the latest US-Iran tensions. BTC moved sharply higher, up 5% following Iran’s retaliation for the killing of an Iranian general, Qassem Soleimani, as Iran’s missile attack on US-led forces in Iraq was announced early on Wednesday.
BTC then went on to drop in value following US President Donald Trump's subsequent comments downplaying the situation in Iran and stating "Iran appears to be standing down."
Such sharp volatility echoed safe-haven assets, such as the Japanese Yen and Gold. So, it’s clear to see why some analysts believe that Bitcoin is already a member of this elite group.
Which one of these camps is right is anyone’s guess. Maybe they both are. Regardless, the exciting thing for crypto enthusiasts is that there are at least strong signs that indicate patterns of behaviour in BTC and an element of transparency, which means that proper technical and fundamental analysis techniques can legitimately be applied to the commodity.
Crypto Market Cap Watch
At the beginning of last week (06.01), the total crypto market capitalisation was $198.88 billion. The market closed last week with a total market capitalisation of $218.31 billion, signifying a healthy increase by $19.43 billion (9.77%) over the week.
Pairs to Watch
Last week’s hottest pairs at the DSX exchange were BTC/USD, ETH/USD and BCH/USD. Now, let’s have a look at these instruments and see what they’ve been through and what might be on the horizon...
As you’ve read above, last week was a good one for BTC HODLers. Bitcoin is trading back in an uptrend above the $7,800 and $7,700 support levels. Price is currently hovering around $8,100 at the time of writing.
BTC is facing an immediate hurdle near $8,200 on the upside. A clear break above this point could set the pace for a fresh rally, surging toward $8,500 and $8,800.
On the downside, the closest supports sit at $7,900 and $7,850.
ETH pricing has stayed well supported above the $135 and $138 levels, currently trading at $145. The token is showing positive signs and may move above the $150 level in the near term.
On the downside, the main support is near the $137 level. If we see Ether drop below this point, the next supports will be at $135 and $130. Beyond those, we may start dropping into $125 territory.
Last week was a strong one for Bitcoin and most of its fork currencies, including BCH. Bitcoin Cash surged almost 18% over the week and, at the time of writing, is trading at $265, up from $225 this time last week.
There’s a minor resistance at $270.15. Beyond that, the next big target will be $300. On the downside, a drop to as low as $227 is on the cards if the party ends up finishing early.
Crypto News — In Case You Missed It
- China’s Digital Yuan is Taking Shape. A statement by China’s Central Bank on Thursday stated that the “processes of top-level design, setting industry standards, developing potential functions and integration testing,” were “almost complete.” The bank said it has been working on the expected two-tiered system that would offer “controllable” anonymity and the functionality to replace paper money. Read more.
- NBA Player’s Contract Tokenisation Plan to Go Ahead. Dinwiddie announced last year that he would tokenise his three-year, $34.5 million contract on the Ethereum blockchain, looking to raise $13.5 million for the first year. In the first move of this kind, Dinwiddie stated that he’d raise his contract’s value as an upfront lump sum, with token holders receiving payouts throughout the season. The NBA had been resistant but are now open to the groundbreaking move. Read more.
Crypto — Did you know...
Crypto enthusiasts often speak of “Whales”. These are essentially the top one hundred addresses that hold 10,000 BTC and up. The horde of the top four in this one hundred, accounts for nearly $5.6 billion! But what about BTC holders outside this top list? No one ever speaks of those with addresses containing one BTC or less. The latest figure from the Cryptosphere is that 732,982 of these addresses exist.
Trade Crypto With DSX
That’s all we have time for this week but, as you know, Crypto is the market that never sleeps. If this article has given you a little taste of it, then you’re probably going to want to get involved ASAP. DSX is a professional crypto trading platform, built by professionals for crypto enthusiasts of all experience levels. If you’re looking for an exchange, pick one that speaks your language. Join us now and start trading crypto today.
See you soon,
The DSX Team1