Pro-Bitcoin Chief of Staff Set to Enter the White House

Sources: New York Post

Donald Trump has chosen pro-Bitcoin Mick Mulvaney to act as the White House Chief of Staff come 2019.

According to a report from 2016, Mulvaney acknowledged that the Federal Reserve has “effectively devalued the dollar” and followed up by mentioning that Bitcoin is a currency “not manipulatable by any government.”

Introducing a cryptocurrency optimist to the White House is a positive signal for the future of the industry. With the United States being one of the largest consumer markets, it can have a global impact if the citizens of the US become more educated and invested in crypto.

Oddly enough, Mulvaney has a contentious past with Trump, especially during Trump’s presidential campaign. In a debate before the election, Mulvaney said:

“Yes, I am supporting Donald Trump but I’m doing so as enthusiastically as I can, given the fact that I think he’s a terrible human being.”

There are strong words, but hopefully, his new position as Chief of Staff will help to rebuild his relationship with Trump in a positive way and ultimately, push the blockchain industry forward towards mainstream use.

Aside from education, there are also clear tax issues which need to be revised to reach mainstream adoption. It would be ideal if Mulvaney can help in this initiative.

Tax Issues

Arguably, the way in which cryptocurrencies are taxed in the US can be significantly improved. Currently, cryptocurrencies are taxed similar to property, but not like real estate which has like-kind exchanges.

This means that each trade is a taxable event, triggering a realized gain or loss even if the trader did not sell back to USD. For example, if Bob purchases Litecoin with Bitcoin, then this is a taxable event. The IRS assumes that Bob sold Bitcoin to USD, then purchased Litecoin with USD, which is not the case. The US dollar was never touched in this Bitcoin to Litecoin transaction.

On the contrary, with real-estate, there are like-kind exchanges, also known as a 1031 exchange. This is a transaction type which allows for the sale of one asset and immediate purchase of another, without generating a tax liability. Many believe that the same like-kind exchange should be allowed for crypto to crypto transactions. It is assumed that many people cannot afford to pay their taxes since taxes must be paid with USD. To pay their taxes, investor and traders would need to sell their crypto to USD, which is another taxable event, just to pay taxes from previous cryptocurrency only trades. This is not only an accounting nightmare but also significantly hurts profits for cryptocurrency traders.

Another interesting perspective is to consider the fact that many people trade to accumulate cryptocurrency, not the US dollar. To be clear, many people trade explicitly to accumulate Bitcoin instead of USD.

Here’s where this gets interesting. Let’s say Bob is trading Bitcoin against other cryptocurrencies with the goal of accumulating Bitcoin, all while ignoring USD value. Meanwhile, Bitcoin’s USD value skyrockets from $1,000 to $20,000 much like it did from 2017-2018 and altcoins drop. As a result, Bob most likely has unrealized gains in USD, but unrealized losses in satoshi value. In other words, Bitcoin’s increase in USD has outperformed many of the altcoin dips.

To bring this full circle, let’s walk through a practical example. Bob purchases XYZ coin at a value of .01 satoshi (a rate of .01 Bitcoin). At the time of purchase, Bitcoin is priced at $1,000, which means XYZ would cost $10 (.01 * $1,000) if it can be purchased directly with fiat. A few months later, Bitcoin reaches $10,000 and XYZ’s price drops to .005 Satoshi, in terms of Bitcoin.

At this point, Bob is holding XYZ coin which is valued at $50, up 400% from the purchase price, but down 50% in Bitcoin value. If Bob wants to cut his Bitcoin losses and sell XYZ coin back to Bitcoin, then he will owe taxes because in terms of USD he has a realized gain, even though he is in losses from the satoshi perspective – which is what he is concerned with.

With these tax headaches lingering over cryptocurrency investors, it is our hope that the IRS and government officials will one day revise the tax code regarding cryptocurrency trade. Perhaps Mulvaney will be a catalyst for this change.

IOTA Analysis – It Looks Like a Bull Run – 19/12/18

IOTA Analysis

IOTA Price Resistance

IOTA rallied for a 2nd consecutive day this week, rising by 13.74% on Tuesday, off the back of a 15.35% bounce on Monday, to end the day at $0.2955.

The bullish start to the week came off the back of a positive weekend that has seen IOTA in the green for 4 consecutive days going into this morning, with IOTA up 31.1% for the current week, reversing the last week’s 5.82% loss with interest.

Through the early part of this week, supported by a broad-based cryptomarket rally, IOTA rallied from an early Monday morning low $0.2246 to a Tuesday high $0.2970.

The moves through the early part of the week saw IOTA break through the week’s major resistance levels to hold at the third major resistance level at $0.2952 by the day end on Tuesday.

In spite of the more than 30% gains Monday through Tuesday, the extended bearish trend, formed at early May’s swing hi $2.6977, remained intact following 7th December’s new swing lo $0.2051, with IOTA continuing to fall well short of the 23.6% FIB of $0.7934.

At the time of writing, IOTA was down 0.61% to $0.2937, with moves through the early hours of Wednesday seeing IOTA buck the trend from across the broader market to move into the red.

For the remainder of the week, a move back through the third major resistance level at $0.2952 would support a run back through to $0.30 levels last touched in the week of 26th November, though IOTA would need support from the broader market to hold onto $0.29 levels through the middle part of the week to break out from the third major resistance level at $0.2952.

Failure to move back through $0.295 levels could see IOTA cough up some of the week’s gains, with a pullback through the second major resistance level at $0.2601 likely to bring $0.24 levels into play before any recovery, the week’s major support level at $0.21 unlikely to be in play barring particularly negative news hitting the news wires.

For the crypto bulls, a pullback through the first major resistance level at $0.2426 would likely sound the alarm bells, with a slide to $0.22 levels later in the weekly signalling a likely full reversal and a likely loss for the week.

IOT/USD 19/12/18 Weekly Chart

Looking at the Technical Indicators

  • Major Support Level: $0.2075
  • Major Resistance Level: $0.2601
  • Fib 23.6% Retracement Level: $0.7934
  • Fib 38% Retracement Level: $1.1573
  • Fib 62% Retracement Level: $1.7455

Altcoins Weekly Analysis – ADA, EOS and Ethereum – 16/12/18

G20 to Regulate Cryptocurrency Markets

Cardano’s ADA

Cardano’s ADA fell by 10.05% Monday through Saturday, following on from the previous week’s 35.05% slide, to close out Saturday at $0.02873.

It was another bearish week, with Cardano’s ADA sliding from a start of a week high $0.03279 to a week low $0.02781, before recovering to $0.028 levels on Saturday.

The moves through the week saw Cardano’s ADA steer clear of the week’s major support and resistance levels, with Cardano’s ADA also managing to avoid striking a new swing lo following the previous week’s new swing lo $0.02724.

It was the only positive, however, with the weekly loss marking a 5th out of the last 6.

For the week ahead, a bullish start to the week on Sunday could provide some much-needed respite from the post-October sell-off, with an early in the week move through to $0.030 levels bringing the week’s first major resistance level at $0.032 into play. The bulls will be eyeing $0.035 levels, support from the broader market needed to bring the second major resistance level at $0.035 into play later in the week.

Failure to move back through to $0.030 levels at the start of the week could lead to more red for Cardano’s ADA. A pullback through $0.0295 likely to bring $0.028 levels and the previous week’s $0.02781 low into play before support kicks in. We would expect $0.026 levels and the week’s first major support level at $0.0268 to be left untested in the week ahead.

At the time of writing, Cardano’s ADA was up 3.66% to $0.02978.

ADA/USD 16/12/18 Weekly Chart

EOS

EOS fell by 5.64% against the Dollar, Monday through Saturday, following on from the previous week’s 28.79% slide, to close out the day at $1.9285 on Saturday.

While the losses were minor relative to the broader market, it was a 6th consecutive week in the red for EOS, the last weekly gain coming in the week beginning 29th October.

It was a range bound week, by recent standards, with EOS easing back from a beginning of a week high $2.127 to a Friday low $1.7746 before finding support to move back through to $1.92 levels.

Moves through the week saw EOS steer well clear of the first major support level at $1.4378, while EOS also failed to take a run at the week’s first major resistance level at $2.7678, a move through to $2.16 levels needed to support a break out in the week.

For the week ahead, a hold above $1.95 through the early part of the week would support a run back through to $2.00 levels to bring the week’s first major resistance level at $2.11 into play. Sentiment across the broader market will influence, with an early in the week move likely to bring some respite from a string of weekly losses, though we can expect some volatility to test investor nerve through the week.

Failure to hold above $1.95 in the early part of the week could see EOS hit reverse once more, a pullback through to sub-$1.90 levels likely to bring sub-$1.85 levels into play, while we would expect EOS to steer clear of sub-$1.80 levels and the week’s first major support level at $1.76 in the event of a reversal.

At the time of writing, EOS was up 2.41% to $1.9749.

EOS/USD 16/12/18 Weekly ChartEthereum

Ethereum fell by 10.53% Monday through Saturday, following on from a 19.14% fall the previous week, to close out Saturday at $82.92.

It was year another bearish week, with Ethereum falling from a start of a week high $94.62 to a weekly low and new swing lo $80.06 on Friday before finding support.

While it was the 5th week in the red out of the last 6, avoiding a fall to sub-$80 levels was key for the bulls in the week.

In spite of the heavy losses, Ethereum managed to also steer clear of the week’s major support level at $77.50, while the start of the week high $94.62 came up well short of the first major resistance level at $111.6.

For the week ahead, a move through to $86 levels and hold would support a move through to $90 levels, bringing the week’s first major resistance level at $91.6 into play that could lead to shift in sentiment and the beginnings of a recovery back through to $100 levels.

Failure to move back through to $86 levels could see the negative bias resume through the week, with any pullback through to $80 levels likely to bring sub-$80 levels and the week’s first major resistance level at $77.5, investors likely to get edgier should Ethereum fail to capitalize on gains early this morning.

At the time of writing, Ethereum was up 3.05% to $85.56.

ETH/USD 16/12/18 Weekly Chart

What is the Finney Phone and What Does it Mean for Crypto?

What is the Finney Phone and What Does it Mean for Crypto?

Finney, the first blockchain focused smartphone, is expected to begin shipping in late December. Created by Sirin Labs, the phone’s operating system is SirinOS, which is a fork of Android made with the intention of implementing blockchain technology at its core. The Finney will allow users to securely and reliably use blockchain products and services.

The phone will include a decentralized marketplace (dCENTER), a built-in cold storage wallet, token conversion services, encrypted communication, peer to peer resource sharing, and incentivized educational apps. It will also include a 12 megapixel camera and 128GB of memory.

The default cryptocurrency used to purchase apps and use their services will be Sirin’s own SRN token. Just to purchase the Finney, which is priced at $1,000, requires the use of SRN.

In preparation to satisfy clients and meet demand, Sirin Labs has partnered with Foxconn, the same manufacturer Apple uses for their iPhones. In an interview with CNN, Sirin’s CMO Nimrod May said:

“By choosing Foxconn to build the FINNEY, we’re demonstrating the public’s desire to have a mass-market smartphone that is able to safely and securely operate within blockchain and cryptocurrencies.”

Sirin Labs raised over $157,000,000 by issuing SRN tokens through an ICO. They used the capital to fund the development and marketing efforts of the Finney. While the future success of the phone is uncertain, the community is excited to see a finished product delivered.

What Does This Mean for Crypto?

The Finney phone is one step in the right direction toward mainstream adoption. There are inherent limitations with blockchain technology that hurts the user experience.

For example, most cryptocurrencies require their own wallet to be downloaded due to compatibility issues. This means that if a user wants to hold Bitcoin and Monero, they will need to download two different wallets, one for each currency. This can become cumbersome when dealing with lots of different cryptocurrencies and tokens.

Additionally, finding, using and downloading decentralized applications is not a smooth process. We expect that Finney’s decentralized marketplace, coupled with token conversion services and a built-in cold storage wallet will allow virtually anyone to explore the decentralized world at their fingertips, relieving many of the pain points users experience today.

Until the phone is released, we cannot know for certain the extent to which blockchain technology is integrated, but at the very least we view the Finney as a foundation for a robust, blockchain-focused OS.

Stellar’s Lumen Analysis – Deeper into the Red it Goes – 12/12/18

iota

It’s another bearish start to the week, following last week’s heavy losses, with the negative bias expected to pin Stellar’s Lumen back from any attempts at a bull run.

Stellar’s Lumen Price Support

Stellar’s Lumen slid by 4.69% to end the day at $0.1129 on Tuesday, taking the current’s week’s deficit to 10.32%, with the bearish trend continuing into the early part of the week, following last week’s 23.3% reversal.

Through the early part of this week, the reversal has seen Stellar’s Lumen fall to a current week low $0.1123, holding well above the week’s major support level at $0.0963, with a start of the week high $0.1261 seeing Stellar’s Lumen fall considerably short of the week’s major resistance level at $0.1500.

With Stellar’s Lumen deep in the red for the current week, the bearish trend formed at late September’s swing hi $0.305 remained firmly intact, with Stellar’s Lumen continuing to fall well short of the 23.6% FIB of $0.1493, which sits alongside this week’s major resistance level.

For the remainder of the week, a move through the start of the week’s $0.1261 high to $0.129 levels would signal a possible shift in sentiment, bringing the 23.6% FIB Retracement Level of $0.1493 and the week’s major resistance level at $0.15 into play before any pullback.

Sentiment across the broader market will need to materially improve however for Stellar’s Lumen to break through to $0.14 levels later in the week and breakout from the 23.6% FIB, with selling pressure expected to limit the upside mid-week.

Failure to move back through the start of the week high $0.1261 could see Stellar’s Lumen pullback deeper into the red through the week, with a fall through the current week’s low $0.1123 bringing last week’s $0.1012 low and the week’s major support level at $0.0963 into play before any recovery.

At the time of writing, Stellar’s Lumen was up 0.33% to $0.1132.

XLM/USD 12/12/18 Weekly Chart

Looking at the Technical Indicators

  • Major Support Level: $0.15
  • Major Resistance Level: $0.096
  • Fib 23.6% Retracement Level: $0.1493
  • Fib 38% Retracement Level: $0.1790
  • Fib 62% Retracement Level: $0.2271

Altcoins Weekly Analysis – ADA, EOS and Ethereum – 10/12/18

altcoins

Cardano’s ADA

Cardano’s ADA slumped by 35.05% in the week ending 9th December, reversing a 9.52% gain from the previous week with interest, to end the week at $0.03194.

Bearish through much of the week, Cardano’s ADA fell from a start of a week high $0.0425 to a week low and new swing lo $0.0272 on Friday, the reversal seeing Cardano’s ADA fall through the week’s first major support level at $0.0356 to call on support at the second major support level at $0.0291 before steadying.

A partial recovery through the weekend reduced some of the losses, while the weekly slide marked the 4th week in the red out of the last 5.

For the week ahead, a move through $0.0340 would signal a run at the week’s major resistance level at $0.04 level, an early move needed to give Cardano’s ADA a run at $0.050 levels later in the week.

Failure to move through to $0.0340 levels could see Cardano’s ADA give up $0.030 levels and pullback through last week’s swing to $0.0272 to test the week’s major support level at $0.0250 before any recovery, more significant losses not expected in the week.

At the time of writing, Cardano’s ADA was down 2.94% to $0.0310.

ADA/USD 10/12/18 Weekly Chart

EOS

EOS tumbled by 28.79% against the Dollar in the week ending 9th December, following on from a 15.54% slide the previous week, to end the week at $2.0467.

A particularly bearish first half of the week saw EOS slide from a start of a week high $2.88 to a weekly low and new swing lo $1.55 on Friday, the reversal seeing EOS fall through its major support levels, with EOS falling well short of the week’s major resistance levels.

Tracking the broader cryptomarket, 2 consecutive days in the green through the weekend partially offset some of the week’s losses, while the week’s reversal marked a 5th consecutive week in the red.

For the week ahead, a move back through to $2.16 would signal the beginnings of a possible recovery, with EOS needing to make a move through the early part of the week to support a run through $2.16 to bring the week’s major resistance level at $2.77 and $3.00 levels into play.

Failure to move through to $2.00 levels to take a run at the week’s major resistance level at $2.77 could see EOS take a bigger hit through the week, a pullback through the previous week’s low $1.55 bringing the week’s major support level at $1.44 into play before any recovery.

At the time of writing, EOS was down 4.49% to $1.9548.

EOS/USD 10/12/18 Weekly Chart

Ethereum

Ethereum slid by 19.14% against the Dollar in the week ending 9th December, the reversal seeing Ethereum fall from a start of a week $114.76 to end the week at $92.79.

Reversing the previous week’s 0.41% gain with interest, a particularly bearish week saw Ethereum slide through the first major support level at $100.53 and second major support level at $86.29 to a week low and new swing lo $81.02 on Friday before finding support to move back through to $90 levels by the week’s end.

The weekly loss marked the 4th in the last 5 weeks, leaving the extended bearish trend formed at an end of April swing hi $828.97 firmly intact.

For the week ahead, a hold onto $90 levels through the start of the week would support a move through to $96 levels by mid-week to bring $100 levels into play before any pullback, a broad-based market recovery needed to bring the week’s first major resistance level at $112 into play.

Failure to hold onto $90 levels through the early part of the week could see the bearish trend extend, with a pullback through to $85 levels bringing sub-$80 levels and the week’s first major support level at $77.5 into play before any recovery, more significant losses unlikely barring particularly negative news hitting the wires.

At the time of writing, Ethereum was down 2.03% to $90.91.

ETH/USD 10/12/18 Weekly Chart

G20 to Regulate Cryptocurrency Markets

G20 to Regulate Cryptocurrency Markets

The G20, an international forum for governments and central banks, has recently signed a declaration to regulate cryptocurrencies. The declaration was signed in Buenos Aires and covers many topics involving tax evasion, anti-money laundering, anti-terrorism, and public policy.

In Section 25, the declaration explicitly mentions cryptocurrencies:

“We will step up efforts to ensure that the potential benefits of technology in the financial sector can be realized while risks are mitigated. We will regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with FATF standards and we will consider other responses as needed.”

The declaration also notes the benefits of an “open and resilient financial system” that the cryptocurrency industry offers. They are also wary of to over-regulate which may stump the growth of innovation. Other than a simple acknowledgment to regulate crypto assets, no details have been disclosed.

The G20 is a powerful forum that combines the leaders across 19 countries and the EU with a focus on “economic, financial and political cooperation,” according to their website.

What Does This Mean for the Future of Crypto?

There is no need for panic. Fortunately, many governments and large forums, like the G20, have not banned the use of cryptocurrencies and instead are looking to work with it. They are conscious of its positive impacts and are only looking to protect investors, while not halting the growth of the technology. While many cryptocurrency enthusiasts are strongly opposed to regulation, the reality is that it is required to bring in institutional investors and reach mainstream adoption.

Many institutional investors, especially hedge fund managers are waiting for clear regulatory guidelines before investing. For example, hedge funds that trade equities in the US are regulated by the SEC. Currently, Bitcoin is not identified as a security, which means that by law, hedge funds cannot invest in Bitcoin directly or recommend it to their clients.

Instead, institutional investors are waiting for an ETF, which is a security and in turn, allows them to speculate on the cryptocurrency markets. For an ETF to be passed by the SEC, the underlying assets need to have clear legal guidelines.

In a discussion about a cryptocurrency ETF, SEC Chairman Jay Clayton has mentioned, “We care that the assets underlying that ETF has good custody and that they’re not going to disappear.” This was said after acknowledging, “We’ve seen some thefts around digital assets that make you scratch your head.”

Moving forward, exchanges will need to work more closely with regulatory bodies to provide proper custodial, trading, and accounting services, as well as a moderate level of insurance in the event funds, are lost or compromised. With more legal and operational infrastructure, there is no reason an ETF will not pass soon.

Is Institutional Infrastructure Being Built?

Yes. According to CNBC, Fidelity is working on custody and trade execution solutions to bring operational ease for their clients.

Fidelity’s “goal is to make digitally native assets, such as bitcoin, more accessible to investors,” Chairman and CEO Abigail Johnson said. “We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use.”

Coinbase has also launched Coinbase Custody which is another effort to simplify the process for storing and securing digital assets. Both regulators and service providers are working towards a more defined and practical future for digital assets. There is lots of activity with hundreds of millions of dollars being invested in this new industry.

Still, don’t be too relaxed. It is our responsibility to avoid over-regulation which can burden innovation and continue to promote the use of this global technology. We witnessed this first hand with the NY Bitlicense, which added large fees and cumbersome paperwork to the process for cryptocurrency companies to operate in the state of New York. As a result, many companies choose to operate outside of NY.

As long as the community stays vocal and involved, the future will be bright. We are excited for what is to come.

NEO Price Analysis – Leading the Bull Charge 06/12/18

altcoins

Key Highlights

  • NEO tumbled by 8.58% on Wednesday, reversing Tuesday’s 4.06% gain, to end the day at $7.03.
  • Bearish throughout the day, NEO slid through the first major support level at $7.11 to an intraday low $6.88 before finding support.
  • A start of a day intraday high $7.69 came up well short of the first major resistance level at $8.23.
  • The extended bearish trend formed at the end of April’s swing hi $94.65 remained intact, with NEO continuing to fall well short of the 23.6% FIB Retracement Level of $28, following last week’s new swing lo $6.75.

NEO Price Support

NEO tumbled by 8.58% on Wednesday, reversing Tuesday’s 4.06% gain with interest, to end the day at $7.03.

A bearish start to the morning saw NEO fall to a morning low $7.17, coming within range of the day’s first major support level at $7.11 to move back through to $7.30 levels and a relatively range-bound middle part of the day.

Market forces ultimately took over later in the day, with a late afternoon broad-based cryptomarket sell-off pulling NEO through the first major support level at $7.11 to an intraday low $6.88 before recovering through the late part of the day to move back through to $7.00 levels.

It’s been a mixed start to the month, with NEO seeing just 2 days of gains against 3 days of losses, with the intraday swings narrowing from the heavy reversals seen through much of November, NEO sliding from an early November high $17.61 to sub-$7.00 levels on Wednesday.

The extended bearish trend, formed at late April’s swing high $94.65 remained firmly intact. The November reversal, late November swing lo $6.75 and a 12.9% loss for the current week to Wednesday’s ending $7.03 has inflicted plenty of pain on the NEO bulls.

At the time of writing, NEO was up 3.51% to $7.28. Moves through the early morning saw NEO slide to an early morning low $6.80, coming within range of the first major support level at $6.71 before bouncing back into positive territory.

With support kicking from a broad-based cryptomarket bounce, NEO moved through to a morning high $7.35, coming up short of the first major resistance level at $7.52 before easing back.

The Day Ahead

For the day ahead, a hold onto $7.20 levels through to the early afternoon would support a move back through the morning high $7.35 to bring the day’s first major resistance level at $7.52 back into play. A sustained broad-based crypto rally could give NEO a run the second major resistance level at $8.01 before any pullback.

Failure to hold onto $7.20 levels through the morning could see NEO hit reverse later in the day. A pullback through to sub-$7.00 levels will likely see NEO fall through the first major support level at $6.71 to bring the second major support level at $6.39 into play before any recovery.

NEO’s one of the front-runners early on and more upside could be on the way should the likes of Bitcoin see a pickup in investor appetite through the day.

NEO/USD 06/12/18 Daily Chart

Looking at the Technical Indicators

  • Major Support Level: $6.71
  • Major Resistance Level: $7.52
  • Fib 23.6% Retracement Level: $28
  • Fib 38% Retracement Level: $40
  • Fib 62% Retracement Level: $61

Don’t Mention the B Words – Cryptomarket Turmoil Grabs the Headlines

Bitcoin Crash

As the cryptomarket progressed through much of this year, a jump in volatility and a wave of bearish sentiment, following December’s broad-based cryptomarket rally, led to plenty of debate on whether Bitcoin and the broader market gains to record highs back in December was just a bubble ready burst.

Certainly, when comparing to the dot.com era and bubbles of old, more than 1,000 gains in a matter of weeks suggested that the gains were unsustainable and, while the Bitcoin bulls talked up the prospects of Bitcoin hitting the dizzying heights of $100,000 and more before the end of this year, the reality has certainly taken a bite.

Of particular interest is why few if any have mentioned the words bubble and burst, as for Bitcoin alone, a 75% slide from December’s all-time high would have shaken any of the major equity markets into submission.

To put it into perspective, the NASDAQ tumbled by 71% from its peak to trough in the dot.com meltdown and, while few will say that blockchain technology is worth less than the paper it’s written on, the reality is that many of the crypto coins traded across the crypto exchanges today are traded based on a white paper and concept, with few actually successfully transitioning from idea to tangible product. Perhaps that alone should be an alarm bell, particularly for market historians.

Even Bitcoin’s fight to become a viable alternative to fiat money seems flawed, with its lengthy transaction times and higher fees relative to some of the other cryptocurrencies looking for a slice of the real money pie.

So, while we can expect Bitcoin and the broader market to continue to find near-term support at such low price levels, investors continuing to believe that the next crypto rally is just around the corner, one does need to question whether the current market dynamics are sustainable.

Ripple’s XRP has shown greater resilience in the lead into and after the Bitcoin Cash hard fork and much of this has to be attributed to the team’s success in delivering an array of real-life blockchain products that have been adopted by institutions as a means to remit monies cross-border.

The team’s success is certainly far greater than any of its peers and to be fair, one does question why Ripple’s XRP has not replaced Bitcoin at the top of the crypto list by market cap, though it may just be a matter of time now and, if the general trend continues, the Ripple effect may evolve into a wave of support that could accelerate XRP’s ascendancy to the top.

We can expect investors to be licking their wounds following last week’s losses and Monday’s sell-off, which may well provide some early gains for the broader market this morning, but the reality is that investors may begin to wonder whether the latest sell-off and the effects of last week’s Bitcoin Cash hard fork on the broader market is reason enough to hold back on the Bitcoin ETF approvals.

Some institutional investors will be lining up for a piece of Bitcoin at sub-$5,000, but the smarter money may hold back for just that little bit longer, with even the more bullish of the Bitcoin bulls likely to be calling an end to the broad-based market sell-off in hope rather than certainty.

For those that are interested in the numbers, the cryptomarket cap has tumbled from last December’s $828.54bn all-time high to $159.72bn and, while this is obviously not an all-time low, it’s 2018 low and, when considering the continued rise in the number of cryptocurrencies, this market has been going in reverse through the year and it may take more than the SEC to stop the rot.

Ethereum Daily Analysis– 20/11/2018

Ethereum

Key Highlights

  • Ethereum slid by 17.45% on Monday, following on from last week’s 16.14% fall, to end the day at $145.21
  • A start of a day intraday high $175.92 fell short of the first major resistance level at $180.
  • A slide to a late in the day intraday low and new swing low $142 saw Ethereum fall through the major support levels before steadying.
  • The new swing lo $142 reaffirmed the extended bearish trend formed at early May’s swing hi $828.97.

Ethereum Price Support

Ethereum tumbled by 17.45% on Monday, following last week’s 16.14% slide, to end the day at $145.21.

Bearish through the day, Ethereum fell from a start of a day intraday high $175.92 to a late in the day intraday low and new swing lo $142, the reversal seeing Ethereum slide through the day’s major support levels by mid-morning, with a lack of support leading to further declines through the 2nd half of the day.

$200 had been the line in the sand for Ethereum as had $6,000 for Bitcoin, with the floodgates opening once the key support levels had been breached, Ethereum having fallen through to sub-$200 levels in late last week’s Bitcoin Cash hard fork induced sell-off.

There were no positives for the crypto bulls to take away from Monday’s sell-off, with the new swing lo $142 reaffirming the extended bearish trend formed at early May’s swing hi $828.97, Ethereum now some way off the 23.6% FIB Retracement Level of $304 and, of greater significance, the 38.2% FIB Retracement Level of $404 that needs to be hit to begin the formation of a bearish trend reversal.

Having already given up its coveted number 2 ranking to Ripple’s XRP, a more resilient Ripple XRP on Monday saw Ethereum fall further behind, with the market cap gap widening to just shy of $4bn, the only good news is that Bitcoin Cash is some way off at number 4, with a $9.5bn gap in market cap.

At the time of writing, Ethereum was down 10.51% to $129.95, with a bullish start to the day hitting reverse, Ethereum falling from an early morning high $149.5 to a late morning low $121.5, the reversal seeing Ethereum slide through the day’s first major support level at $132.83 to come within range of the second major support level at $120.46 before finding support.

For the day ahead, a move back through the first major support level at $132.83 would bring $140 levels into play before any pullback, though we can expect Ethereum to face plenty of resistance on the way through the day’s first major support level to pin Ethereum back from a break out to $140 levels barring a material shift in sentiment across the broader market.

Failure to move back through the day’s first major support level at $132.83 will likely pin Ethereum back to $120 levels through the day, with the day’s second major support level at $120.46 in play should sentiment fail to improve through the second half of the day.

It’s particularly bearish, the negative bias bringing sub-$120 levels into play mid-week.

Ethereum Daily Chart
Ethereum Daily Chart

Looking at the Technical Indicators

  • Major Support Level: $132.83
  • Major Resistance Level: $166.75
  • Fib 23.6% Retracement Level: $304
  • Fib 38% Retracement Level: $404
  • Fib 62% Retracement Level: $567