The cryptocurrency market growth continues, and the last week end’s rollback was logical, but the temporary case, 8848 Invest’s analyst Mark Sorokin says.
Last week, the BTC price reached the target range of $10,500. At the same time, the high points were different for a wide range of trading platforms and analytical aggregators. They were $9.300, $9.800, and even $10.600 ($10.431 according to the crypto information aggregator Coinmarketcap).
‘The largest cryptocurrency’s value has reached the target range, on all exchanges, so now the expectedly sharp reaction to reaching this area has appeared. The rollback has begun naturally,’ the expert notes.
In his opinion, a reversal from current levels shouldn’t be expected. Most likely, the market will go into another intermediate flat. Now the market is trying to set new flat’s boundaries after which grew to the level of $ 11,300 will continue most likely.
‘The market participants’ balance hasn’t changed significantly, so there are not enough conditions for the fast reversal. If large accumulation in the current range will be formed, it will be distributed at the level of $6.000–7.000,’ 8848 Invest’s analyst sais.
At the moment, maintain the current balance of buyers and further market growth seems more likely.
The situation is similar to the altcoin market. Many of them overcame their potential resistance levels. Behind it, there was a sharp collapse, which provokes market participants to sell assets.
‘The further accumulation formation seems likely, after which the prices of almost all alternative cryptocurrency assets will continue to grow. ETH, LTC, and XRP expect minor rollbacks, after which the upward movement will resume,’ Mark Sorokin summaries.
The total volume of the excess of BTC futures open positions reached a $5 bn mark. Among the notable news of last week, there is the launch of the Russian version of the Poloniex exchange, and the start of support for the Russian ruble by the large cryptocurrency exchange KuCoin.
Also, the research company Mindsmith specified the blockchain industry’s main trends for the coming year. These are in particular:
• growing of interest for blockchain at developed and developing countries and their establishing of their CBDC projects;
• massive launch of pilot blockchain projects by large frequent banks;
• active integration of the blockchain into the real economy sector;
• the formation of large blockchain-based business ecosystems
10 questions crypto investor should ask a management company
Investing is always a not easy mission, and it’s doubly difficult if it’s about digital asset investment.
You can’t just sign papers, transfer money to the management company or fund and get numb waiting for payments. You’ll have to keep abreast of the news, follow your company’s progress and keeping in touch with it always. Here are a few tips every investor should ask, striving not only to return his investments but also to get stable passive income.
1. For how long the company is operational?
Cryptocurrencies and blockchain is a young industry, there are no companies with a 20-year history. Any company founded yesterday should be avoided of course. The detailed history and 2–3 year history documents are best suited.
It’s also worth to pay attention to companies with giant & impressive ‘History’ web-site section, and the partners list including the globally known names or even possibly Elon Musk. Surely, it deserves to be mistrusted and double-checked.
2. Does it’s activity is regulated by the financial authorities or state? Does it pass the audit?
The investor always associates reliability with strict law compliance. Therefore, following the regulatory standards of a particular jurisdiction will be a significant advantage for the company that you choose to invest in.
At the same time, the company needs to be also passed financial audits by independent appraisers regularly, and its results were publicly available.
3. Does the company implement KYC / AML procedures? What is the way of due diligence?
Another important question to ask is whether the company is passing due diligence procedure, which involves the assessment of investment risks and investment objects, as well as its comprehensive financial condition and market position check. The same applies to KYC / AML procedures, which are becoming more widespread year after year.
At the same time, those management companies and funds that were caught in hiding the results of such inspections, or simply didn’t pass it, should be alarmed.
4. Does the company show steady alpha (does it outperform the profitability of benchmark BTC investing)?
Perhaps the most important question for the investor is the fund or the management company’s profitability. Yearly, half-yearly, quarterly, monthly and weekly profitability reports should be available for the client on demand. The fact of refusing to provide such reports says a lot. It’s worth to pay attention to whether the company’s profitability exceeds the return on BTC investment for the specified period.
5. What is the way of the customer’s digital assets stored?
It’s also worth checking how the company is going to store your assets while they are in management. In this case, companies using cold storage, for example, Ledger, or those who use services of custodial services market’s leaders are more preferable.
6. What risk management policies are applied?
In the modern world, with it’s growing chaos, risk management comes to the fore, and the risk management department directly involved in calculating the consequences of possible trader’s mistakes becomes almost the main company unit. It’s worthwhile to find out what risk management policies are applied by the fund (or management company) and what specific tools are used to protect your investments.
7. What strategy is used to hedge open positions?
Traditional strategies, advanced strategies, trading bots — the risk management tools the company uses are extremely important. At the same time, in the case, there is no information about it neither in the company’s ad nor in client’s agreement, and the investment manager doesn’t mention it also, this will be a direct indication the company will deal with client assets in bad faith and there is a risk of pouring money down the drain ‘drain’.
8. What is the current company’s AUM size (amount of money under the management)?
The amount of capital under the management directly indicates the company’s quality. The higher it is, the more retail and institutional clients trust it their assets. In the long run, such a company is less likely to drown, which means your chances of making a profit is increasing.
9. Does the company have a lock-up period (the period after which the investor got the opportunity to withdraw profits/investment body)?
Some funds have the so-called ‘long lock-up’, which implies that profits can be withdrawn no earlier than after a year. If it’s important for you to be able to receive investments monthly, or, if necessary, to withdraw assets out of the company and terminate the contract any time, you should pay attention to the lock-up terms.
10. Does the company accept under the management only the fiat assets or cryptocurrency also?
The asset transfer method is also matters. Can you make the cheep bank transfer, or will you need to bring the box of cash to Switzerland or Malta? How much will be the cryptocurrency transfer fee? All these questions should be asked before you decide to cooperate with the company and sign a loan agreement.
The market maintains a positive trend. Over the weekend, BTC overcame the psychologically important $10,000 milestone and despite rollback, the largest cryptocurrency’s next goal appears to be the mark of $11,300, 8848 Invest’s analyst Mark Sorokin believes.
The market situation didn’t change last week as a whole. The market maintains a positive trend. The BTC goals haven’t been completed yet. The formation of intermediate accumulation with the hit of the $10,500 mark is expected at the current conditions.
‘BTC is gaining liquidity, which should lead to the resistance breakthrough and renewal of the maximum around $10,500,’ the analyst notes.
It’s difficult to predict further situation evolution. The largest cryptocurrency’s growth can lead to a stop-loss reaction, after which a deep rollback is quite possible.
‘Another possible scenario is the formation of the flat movement, short-term liquidity accumulation and move to the $11,300 mark,’ Mark Sorokin said.
The situation for altcoins is similar, however, they grow without drawn-out stops, outpacing the largest cryptocurrency in growth rate. The exception is the XRP token, which is currently stuck in the flat approaching the large resistance area.
‘There is market balance change and downward correction is quite possible soon. Otherwise, the coin will gain additional volume for further movement above the $0,31 mark,’ 8848 Invest’s analyst said.
According to him, there are local pullbacks of Ethereum (ETH) and Litecoin (LTC) are expected. Another scenario is the new accumulations formations and continued growth.
It’s difficult to highlight something significant in the information agenda. No news could visibly affect the market situation.
‘The coronavirus saga continues, this is the main media emphasis now. The mining industry prospects look uncertain still, but overall it’s not so critical to stop or ‘quarantines’ it. I believe it won’t significantly affect the cryptocurrency market,’ the expert summarizes.
The market is in the ‘green zone’. BTC updates its goals, and altcoins stabilize in a bullish trend. The only thing could hinder further growth is news from China, but its unlikely, as 8848 Invest analyst Mark Sorokin says.
According to him, the market situation hasn’t significantly changed until last week. The BTC price rose, giving the market a good impetus, and returned to accumulation, forming a new flat and testing the previous support range, which formed slightly lower.
‘There was a liquidity increase in the support zone. On a Monday night, there was an attempt to break through the upper border, but the seller’s stop-loss worked, the price began to roll back,’ the analyst said.
The flat trend is likely to continue this week, otherwise there the correction to the $8,000 area will begin, but it’s too early to talk about these scenarios. The flat is forming now. BTC price needs to gain a foothold above $9,800 to continue to form an upward balance.
Altcoins, LTC, and ETH, in particular, feel much better than ever before. They continue to move up without any significant stops. The LTC is a bit stuck at around $70, but overall it retains the potential for further growth to the $100 range. Ether’s potential growth level is $270, but this is a matter of a more distant prospect. Immediate targets for the most powerful alts are stand below.
‘LTC has reached the resistance level at $70 zone and suspended growth, and for ETH it’s expected to overcome the psychologically important mark of $200, behind which there is a reversal zone with an allegedly large number of buyers’ top-loss,’ says Mark Sorokin.
In the case of their massive closure, the market balance will change, giving rise to a downward movement, correction.
The main news in recent weeks has been the spread of coronavirus in China. According to 8848 Invest’s analyst, the more negative news cases stronger the market growth.
‘Information about this virus carries a clear negative. The virus geography is expanding, there is information about deaths, but it has a positive effect on the market dynamics in general,’ he notes.
This is a good opportunity for market growth. While a large number of people are experiencing, let’s say, fears about the virus, there are more and more of those who sell the crypto, or saving the fiat money. It will push the market up.
The epidemy won’t significantly affect the mining, because the equipment continues to work, and sick people can be replaced temporarily.
‘I believe this situation won’t significantly change even taking into account China quarantine. This is not a situation that can affect the mining market hardly,’ the expert concludes.
The cryptocurrency market maintains positive dynamics and systematically continues upward movement to overcome the level of $10.000. Although there are no sharp jumps in the exchange rate, the BTC price is striving for further growth as 8848 Invest’s analyst Mark Sorokin says.
The BTC situation did not change significantly during last week, the market remains upward dynamics. It became obvious that the market is testing previous support levels, getting liquidity from these ranges.
‘It indicates the price will strive to go above $10.500, updatin’ this maximum to look for stop losses of sellers who hold unprofitable positions and expect for deeper correction without fixing losses,’ the expert comments.
At the same time, we can expect growth to the level of $10.500 and higher for BTC.
While there are no significant positive impulses at the altcoin market, it also maintains an upward trend. It indicates these are not ‘false maneuvers’, but a healthy market movement there. Buyers purposefully
‘drive’ the price, buying up all the seller’s purchase requests.
‘In general, the market is expected to move up. According to LTC — it’s reaching the level of $66–67 soon. According to ETH, the target is $180–200,’ Mark Sorokin notes.
Thus, there no conditions for a downward movement and we can expect further growth at the altcoin market.
Important fundamental news included the words of Vitalik Buterin about the possible merging of Ethereum Classic and Ethereum 2.0, the announcement of the hard fork of the Cardano coin and the launch of the gold-backed stablecoin by Tether.
While South Korean authorities are preparing to tax cryptocurrency revenues, Uzbekistan has launched a regulated national cryptocurrency exchange, which will have a great positive effect on cryptocurrency acceptance in the Central Asian region.
Binance Research marks the high-peak market correlation for the Ethereum coin. At the same time, BTC was recognized as the most profitable investment tool of 2019, and the number of addresses with more than 1 BTC for the year increased by 11%, which can also be considered as a positive signal for the market.
The market moves to $10.500
In the second half of January ’20, BTC crossed the $9.000 mark for the first time since November ’19. Despite a quick correction, the cryptocurrency market remains positive attitude, and grow up to the psychological mark of $9.000 opens the door for movement to $10.500, 8848 Invest’s analyst Mark Sorokin believes.
There was a rather interesting market movement this weekend. The local upward ‘provocation’ on Bitcoin was formed, as the cryptocurrency grew above $9.000. But BTC couldn’t keep above this range, as overbought were sharply formed and, apparently, unprofitable sellers who previously opened positions ‘doubted’ of soon market decline and began to exit the market for stop loss.
‘They started to stop & leave the market, helping huge participants to ‘unload’ a part of their positions and, accordingly, to form a downward movement. The weekend was remembered by a rather strong fall into the buyers’ stops zone. Roughly speaking, the market at the same time ‘shook out’ both sellers and buyers,’ 8848 Invest’s analyst said.
Now it’s extremely important to observe the further market situation, he claims. We should expect the formation of the new flat and a set of long positions for the cryptocurrency purchasing. It will take about 1–2 days, possibly more, depending on the amount of liquidity involved in the current range.
‘In general, the vector remains upward. In the medium term, I expect the move above the $10.500 mark, where the turning zone and the stop-loss zone of unprofitable sellers remained within the market are located’, Mark Sorokin emphasizes.
If a reversal formation is formed, the market situation may change, and BTC will fall below $7.500. In this case, a ‘big head with shoulders’ figure will indicate a potential depreciation below $6.000. On the backdrop of a growing market, it remains a probable scenario for the market situation development.
The altcoins drop wasn’t the same strength as for BTC. It was less noticeable, but, in general, it indicated the boundaries of the new flat, where buyers will accumulate volume. Thus, according to ETH, LTC, XRP, BCH and most other alts we should expect further growth after the current local correction.
‘In general, the balance is longing. The movement of the main coins up is can be expected. There are no critical ‘contingency’ situations so the market maintains the good potential for growth,’ the analyst summarizes.
From the point of fundamental news, it’s worth to mark the launch of cryptocurrency options on the CME. This is a potentially important crypto trading infrastructure element, and trading volumes have already reached quite good indicators during the opening day. It’s necessary to observe this tool’s development. It’s difficult to say how it will affect the current market sentiment.
In the first weeks of 2020, the cryptocurrency market is on the rise, which is confirmed by both technical and fundamental factors. The market turned to growth, so shortly it’s positive dynamics is expected, Mark Sorokin 8848 Invest’s analyst believes.
In the last few weeks of the past year, as the BTC price fell in the range of $6 000–6 500, the previous low was updated, but the movement didn’t develop further. This suggests that after breaking through there was an ordinary buyers’ exit to stop losses, where one large player (or group of players) gained a huge position.
‘For this reason, the BTC price continues to grow to the resistance range near the $9 000 after a long accumulation (lasted quite a long time, about a month). There’s nothing suspiciaus about price movement’s origin,’ the analyst notes.
This is a planned movement, and there are no factors that could cause the largest cryptocurrency price collapse. One alarming fact is the current movement has no deep pullbacks. It would be better if it was an upward movement with certain liquidity acquisitions.
‘Now we expect to reach the range of $9 000, where we will check the presence of stop-losses for both those market participants who will cover losses and those who are preparing to take profits. They can exit the market too,’ Mark Sorokin says.
For his opinion, the price will be in this range, and BTC has good chance to reach the new local peak of $ 10 000 or even slightly higher in the future, as the current large accumulation has a much larger volume than the resistance in the range of $9 000–10 000.
‘I expect an upward trend for Bitcoin. Large-scale flat movement may include several smaller flats. The current situation may appear to be the huge flat, some of which we are observing now. In the current situation, one can expect the BTC to reach $9 000, $9 500 and $10 000, but this is an ideal scenario,’ 8848 Invest’s expert summaries.
The rollback observed last week is the standard situation that occurs after impulses. There is a partial fixation of positions, unprofitable traders exit their transactions. At the same time, the market will maintain an upward trend within the indicated range.
As for alternative coins, they also have a curious dynamics corresponding to USD and BTC. Currently, the growth scenario is preferable for most tokens. LTC moves the range of $ 66 is the most promising now, which makes it attractive to investors. The coin hasn’t reached its intended goals yet. ETH, XPR and other coins will also show good growth shortly.
The downward market scenario for BTC has been replaced by the opposite trend, which, will last after the New year eve, 8848 Invest’s analyst Mark Sorokin believes.
The scenario with the continuation of the formation of large accumulation is implementing as the false penetration of the lower boundary of this sidewall has occurred. The price of BTC, in principle, didn’t go down much and sharply redeemed.
‘Accordingly, the theory suggested the stop loss of buyers worked has confirmed, and price flew up to keep the seller’s volume,’ 8848 Invest’s analyst said.
Now the main reference point is the range in the region of $ 8,000. The next high is in the region of $ 7,900–8,000. After it, again, the next stops can earn and change the balance.
‘The dynamics are upward so far, however. So I am inclined to grow to the area of $ 8,600–9,000, as the main resistance was formed there. According to the chart, large volumes have been accumulating there for a long time,’ the expert notes.
In his opinion, now the price can return to these ranges and even, quite likely, can update them and go above $ 10,000. It’s necessary to build a strategy in stages. So far, growth is expected for the next maximum near $ 7,900.
‘If nothing happens there, no sharp returns to the trading range, then the price will go higher. Testing of the level of $ 9,000 will begin,’ Mark Sorokin says.
For altcoins, approximately the same situation is observed. The redemption of all these coins continues, and the price will also, in principle, very likely continue to grow to the nearest reversal zones, beyond which the trade balance may also change.
‘In general, the dynamics is upward, although fundamentally, taking into account the news, nothing particularly interesting is happening on the market,’ 8848 Invest’s analyst said.
The American regulator SEC continues to refuse companies that are seeking to bring their ETFs to the market, there is also little news on Etherium and other major altcoins, but this doesn’t affect the generally positive market dynamics.
In general, the positive dynamics, which will affect the growth of the market, will continue until the end of the year. The growth will most likely be quite sharp, as, in principle, the buyback that occurred from the lows.
‘Accordingly, shortly, the BTC price can return to the level of $ 10,000, which will be quite natural. Here, I stand for growth so far,’ the expert summarizes
The BTC market has a downward scenario still, and it’s hard to say how long this market calm will last, the 8848 Invest analyst Mark Sorokin shares his market view.
Contrary to expectations over the weekend, BTC couldn’t break through the resistance. Market participants continued to gain volume for this resistance in the area of $ 7,600–7,700. This is demonstrated by the 4-hour BTC chart. The price stood and moved down from the resistance area
‘Therefore, the update of the lows below $ 7,000 will follow with a high degree of probability. More truly, it’s lower than $ 6,000 — $ 6,500,’ the expert notes.
In his opinion, the current market scenario is still exactly downward, since the market is promoted now precisely by the volume additions. It’s gaining the volume of sellers. Accordingly, this should result in an update of the lows.
It’s possible many traders have already begun their Christmas holidays, but too early to talk in this way for the market as a whole.
‘The volatility is low enough now. There might likely have been some kind of outflow of money earlier because therefore the market is moving so sluggishly. But in general, it’s not worth to talk about the holidays. They won’t start even on January 1th, cryptocurrencies will be traded still,’ Mark Sorokin notes.
It is hard to say how long the market lull will last, but as the price will go below $ 6,000, updating the lows, many players will have a ‘pattern gap’. There may be even panic.
“Then this calm will end, and we will be able to see a strong impulse movement. It will likely be directed downwards to provoke sellers,’ the expert said.
The new level of resistance has been formed already. This is the mark of $ 7,500. According to 8848 Invest analyst, the market was gaining volumes from the previous resistance, and at $ 7,500 there is a new accumulation that hasn’t been tested yet. It confirms the 4-hour chart. This level acts as a resistance level now, from which the market can go down.
‘At the same time, it’s worth remembering that this level may also have an upward correction,’ Mark Sorokin notes.
According to him, the situation on the Altcoin market is even more boring than on the BTC. There is the extremely low volatility, flat on ETH and LTC, and even on XRP is formed. Everything is pretty much the same there for several weeks.
‘Accordingly, we look forward to any active strong movement, after which it will be possible to estimate and evaluate the prospects of this market segment,’ the expert summarizes.
December for the cryptocurrency market is characterized by low volatility and a long-length preparation for a heavy move, that direction is difficult to predict still. Its start should be expected only next year, 8848 Invest’s analyst Mark Sorokin sais.
For his mind, a specific flat of BTC rate now may keep for another month with a high degree of probability.
If we imagine that now the price is on the lower flat border then ‘break’ up will occur with more than one ‘candle’.
‘Most likely it will be ‘heavy’ climb, which will last 3–4 weeks. It probably will take about a month to reach the level of $ 9,000,’ the expert says.
In general, BTC has no high volatility, which indicates preparation for some significant movement. So far, it’s direction is extremely difficult to indicate. This is a matter of time, we must wait and react to the directions of exit from accumulation.
In general, the launch of new tools doesn’t particularly affect the cryptocurrency market. In particular, it’s happened with the announcement of the launch approval of Bitcoin Strategy Fund, focused on investments into BTC futures on regulated exchanges, by the American regulator SEC.
According to the 8848 Invest’s analyst, this is natural as market participants need time to form a reaction for the latest news, calculate possible risks and accumulate certain trading volumes. Now it’s caused new participants to enter the market, and this news will be ‘recouped’ only in a few weeks.
‘Having this news market participants are making decisions now. To purchase, fix profits or take other actions,’ Mark Sorokin recalls.
Altcoins have almost no chance to ‘shoot’ before the end of the year. XRP looks good, having positive dynamics in the current situation, but most of the altcoins maintain approximately the same correlation with BTC still.
‘If XRP will go up, other coins from the top-10 including LTC, ETH, BCH, and others will move the same direction. I think their dynamics will be quite similar,’ the analyst notes.
According to him, Istanbul hard fork this weekend won’t have a significant impact on the ETH price. Other coins also went through hardforks in the past, but their price dynamics remained approximately the same.
‘I think these this news affects the technical aspects only — the network, the blockchain, but not the market quotes, as market participants aren’t particularly keen to invest in these tokens at current levels,’ said Mark Sorokin.
In his opinion, the calm at the altcoin market will remain till the end of the month, and at the beginning of January, there will be the beginning of a significant impulsive or progressive movement. It remains only to wait for the end of the New Year holidays.