Today we will talk about the market situation, conduct a technical analysis, and also discuss the recent video by Andreas Antonopoulos about the Bitcoin ETF, the statement of the head Coinbase about the reason for the natural integration of cryptocurrencies in the next 3-5 years.
Nice to see a slight recovery in prices in the market, as well as a return of capitalization to the mark in 200 billion dollars.
After the market has lost all of its winter growth, the question remains: 'can it hold the support level'? BTC dominance is returning to December levels and has already grown to almost 55%.
I think that Altcoins have chances only if BTC does not go below $ 6 000. For the growth of the Altcoins in relation to the BTC, a preliminary BTC rally is necessary, since liquidity is necessary for mass purchases. However, now many coins are oversold and this is enough for a short-term rebound.
It is worth paying attention to the current huge number of traders using leverage from both short and long positions. Short positions indicate the likelihood of short squeezes. While I do not rule out a possible renewal of the bottom on BTC, historically, the price has been held at $ 6, which is a key starting point for the December rally. If we look at the chart of open short positions on Bitfinex, we can see that only three times they went above 000: in October, April and August 30, after which the price skyrocketed.
The market is now dominated by bearish sentiment, with CNBC's latest Twitter poll showing that over 80% of people believe the price will continue to decline. However, when the majority of market participants begin to feel confident about something, it is best to take the opposite point of view, because all 3 times when the number of open short positions went off scale, we saw the subsequent explosive growth of Bitcoin. I do not live in fantasies and I understand that BTC can refresh the bottom, but now I am patiently watching, since a positive outcome is also possible. However, for optimism to emerge, it is necessary to see confirmation in the market. I do not believe that the price will drop sharply to the $ 4 area, most likely, we will have a repeat of 000, when first there was an explosive growth, and then the price gradually renewed the bottom.
As for the altcoins, we continue to complete the bearish cycle. Coins continue to move to their historical levels of support. I think there are still a couple of days before a potential giant short squash. From my point of view, a large number of altcoins will not return to past values, and people will gradually leave positions. If you look at the history of CoinMarketCap, you can see how quickly coins alternated in the TOP-10 positions. We are at a very early stage of technology development and many concepts quickly lose their relevance.
Andreas Antonopoulos video about Bitcoin ETF
Obviously, Andreas' video is a reaction to the flow of questions related to the upcoming SEC decision on ETF on Bitcoin. To a certain extent, I agree that the rejection of an application from VanEck is not a commemoration of the end of cryptocurrencies and I am not going to invest / trade ETFs if they are issued. As you know, I recently appealed to the SEC to accept the ETF and the reasons for doing so. However, Andreas led a very entertaining argument. I heard a lot of talk and argument about the negative effect of taking an ETF for Bitcoin and the market as a whole. Some say that this will lead to manipulation, but I do not think that a potential new market is waiting for something worse than what is happening with futures. Andreas is right from a moral point of view, because an ETF does not directly imply ownership of Bitcoin, but is only a derivative in a brokerage account, which is essentially a synthetic tool. However, I do not agree with him about the fact that ETFs will stand in the way of technology development due to the involvement of large financial institutions in the voting and decision-making process. I believe that in this case the situation will develop as in the case of the adoption of Segwit2x, when the community abandoned this step, despite the discussion between people who own large stocks of coins, even 1 million BTC may not be enough to affect any fundamental decisions. I am also sure that there are people who do not want and will never buy Bitcoin for any technological use, but only want to speculate on it, and they should not be protected from such a possibility.
Interview with Coinbase CEO about future cryptocurrency integration
https://www.bloomberg.com/news/videos/2018-08-15/coinbase-ceo-armstrong-on-the-future-of-crypto-video
Brian Armstrong spoke about the upcoming organic adoption of cryptocurrency by countries going through periods of crisis and recessions, and I agree with him. Many people feel guilty about the fact that they do not use cryptocurrencies for their intended purpose, but this is understandable, since with a stable and usable national cryptocurrency, there is no point in doing this. In countries with not so well developed financial technologies, or weak national currencies, such as Venezuela and Argentina, there is no other choice than to accept and integrate cryptocurrencies. They need a currency that does not fall under the control of the Central Bank and, as a result, does not have problems related to monetary policy, interest rates, etc. Thus, cryptocurrencies will gradually become a massive payment solution.