Panic at global financial markets wasn’t the prime reason for the sharp cryptocurrency market decline. It was predictable and expected as itself. The large accumulation formation will be presupposition for the reversal. It’s worthless to make the serious forecasts about the fast growth of major cryptocurrencies before, 8848 Invest’s analyst Mark Sorokin is convinced.
There where a negative situation in the cryptocurrency market last week. It was generally predictable. So after reaching the mark of $10,500 during previous weeks, the market began to distribute the accumulated volumes.
‘The started global assets redistribution turned into global accumulation culminated in the downward movement. The level of basic support in the region of $4,000 formed in late 2018 — early 2019 became the goal’, the expert said.
According to him, the sharp rebound followed the decline. Currently, the first thing to expect is a corrective upward movement and the new accumulation formation. That’s one of the probable scenarios.
‘Another possible scenario is the movement beyond the accumulation boundaries to the $3,200, where buyers’ stop-loss orders will be executed and the redistribution of previously accumulated volume will begin. It can be followed by a long, 3–4 months or more, accumulation, after which the movement to the support level at $7,400 can be expected’, 8848 Invest’s analyst is convinced.
The level of $ 7,500 can’t be reached quickly, the continuous volume accumulation is required. There is a reverse reaction now, it can be determined as the future flat boundaries setting perhaps, but it’s an unlikely scenario.
A similar situation is observed in the altcoin market. Most of the coins fell below previous ranges. It’s difficult to determine the support levels where the coin price can hold in the nearest future.
‘Generally, the continued downward movement is expected, with the exception of coins, which declined significantly. Its downward movement can slow down. It’s XRP for example, which price has reached the historic low. At the same time, ETH and LTC have some extra space for downward below $20 and $110–120, respectively,’ Mark Sorokin notes.
While there is the volume distribution, it seems extremely difficult to determine probable scenarios for the market situation. The large accumulation formation will be an indicator of the price is ready to go up. It’s worthless to make serious forecasts about the fast growth of major cryptocurrencies before.
The BTC price will resume its growth to the $9.500 soon. A positive scenario seems more likely. The coronavirus remains the highlight news seriously affected the global financial markets. After the epidemic subsides, we can expect the growth resumption for all major instruments, 8848 Invest analyst Mark Sorokin believes.
About the BTC, there are finished the opening volume distribution phase discussed in previous reviews. At $10,500, a new locked buyer’s volume was formed, the price gets the new support source at $7.700–8.000. Thus, the main cryptocurrency’s price tested the support range and new upward reversal can be potentially expected now.
‘To make it real several conditions must be completed. The volume accumulation that will support this upward movement is required, after which, accordingly, the BTC price will resume its growth to $9,500. It’s what concerns the positive scenario,’ the expert notes.
According to him, a negative scenario is also possible. It’s a dip below $6,000, but it’s quite difficult to predict it with high accuracy. If the fall continues, it will be swift. However, the main option for BTC is testing the support level and gaining the necessary volume. It will be redistributed and the price rate will continue to grow to $9,500.
The situation is very similar to an alternative token market. Its fall appeared to be even deeper than for BTC, but in general, the price reached the main support sources formed at the very bottom which caused the previous growth.
‘The new volume formation here we also expect, the new accumulation and the growth resumption after that. From technical analysis, the rate growth isn’t canceled, we are waiting for the necessary conditions to continue our upward movement,’ 8848 Invest analyst says.
The goals haven’t finalized yet for some alternative coins so locally they can also sag, while the main market will standstill, in the current flat.
No serious news should be noted from fundamental analysis. The coronavirus remains the highlight news that caused the fall of all major global financial markets.
‘It’s the excuse of course only. Financial indices fall has some deeper reasons. Coronavirus influenced the psychology of the main market participants, forcing them to sell their assets in general. The current BTC correction is also connected with it,’ Mark Sorokin emphasizes.
There is only hope for the situation’s early resolution. Italy was actually ‘closed’. Due to the high number of infected and fatal cases, all major sporting events were canceled there and the almost complete isolation mode was initiated.
‘I’m sure the situation will change soon. It can appear the motive to relieve markets. After the epidemic subsides, we can expect the growth resumption for all major instruments,’ the expert summarizes.
After continued growth, the cryptocurrency market is entering a stage of correction, which may appear to be deeper than observers previously expected. At the same time, after reaching lower support levels, the BTC price may return to the range above $10,000, 8848 Invest analyst Mark Sorokin believes.
The market situation has changed. A correction movement has matured for all instruments. The BTC chart, as the primal cryptocurrency market driver and indicator, shows the formation of hidden distribution.
‘There is already a large accumulation and lower highs, which indicates that formed from the above volume is held and not released out from the market. It, in turn, indicates open interest, which may unload much lower,’ the expert notes.
In his opinion, the first reference point for the new BTC rate movement will be the mark of $ 9,100. This is the minimum where may be found stop-loss orders for buyers who are currently holding their positions. Ideally, viewed more globally, this is a mark of $ 7,600.
‘Achieving this level indicates a test of core accumulation and an increase in volumes from this range and a run above $ 10,500, the maximum formed earlier,’ Mark Sorokin says.
The market correction at this stage may be deeper than previously expected. It may be followed by a more serious volume increase.
Most alternative coins show steady flat movement with no priorities. The further movement of their rates and the distribution of accumulated volumes will depend primarily on the movement of the largest crypto, BTC.
Following the Sunday meeting, the finance ministers and the heads of the G20 central banks called for the implementation of crypto regulation standards in the G20 countries in accordance with the FATF recommendations.
According to the new cryptocurrency rating of the China Electronic Information Industry Development (CCID), BTC left out the top 10 of the most influential digital currencies rank. Traditionally, EOS leads the CCID ranking, and the Tron project returned to second place, displacing Ethereum out of there.
In addition, it is expected on April 30, the SEC will make a final decision about the future of the TON project.
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.