Monthly Cryptocurrency Market Update; Consolidation Is In Effect

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Monthly Cryptocurrency Market Update; Consolidation Is In Effect

The Cryptocurrency Market Is Consolidating

The cryptocurrency market has had an impressive run higher this year. Most coins count their gains in the triple digits and there is reason to believe the run is not over, bigger gains are on the way. There are several drivers for the rally but the one I see as most significant is the halvening. The halvening is when the block reward for a proof-of-work blockchain is cut in half. What that means is that miners earn half as much per coin after the halvening as before it, a situation that increases the value of all tokens of the same variety.

In our case we have not one but two halvenings. The first is with the Litecoin blockchain. Litecoin is arguably the most important Bitcoin fork and set to halve its reward in under 30 days. The target ETA data is August 5, 2020, the block reward will be cut from 25 to 12.5 coins. While the halving doesn’t realistically improve the value of all LTCs equally, it does make the market less liquid and encourages hoarding of coins. That is what will make the value of LTC increase. As tokens become scarce and the market expands the supply/demand imbalance will underpin long-term price gains. And there will be another halvening in 840,000 blocks, and then another, and another.

The price of Litecoin has been one of this years biggest movers. The coin has risen 545% from the low to the recent high and could easily double itself again. The coin has broken above a key resistance on strong volume, held the level for over a month and consolidated at a new support. Price action is below the short-term moving average which is something I don’t like but that is offset by indications of support in the MACD and stochastic. Both the indicators are set up to fire a rebound/reversal signal, the catch is that they’re still bearish and could lead the coin down to the stronger support level. Support looks to be near $120, it might actually be closer to $106. In either event, a bounce from support is the signal to buy.

Bitcoin’s halvening is a little further off, just over 300 days, but an equally strong mover of prices. In fact, once the general market rally fueled by LTC’s halvening cools off the BTC rally will be ready to begin. When Bitcoin halves its reward will fall to only 6.25 coins and is not the first time to happen. Bitcoin’s price is consolidating around the $11,000 level but may retest the $10,200 region before moving higher. The good news is that indicators are much less bearish, stochastic is weakly bullish, and suggest the next phase of the rally is close at hand. The token needs to cross the $12,000 resistance level, when it does a retest of $14,000 will be next. When that breaks Bitcoin is likely to hit $15,000 very quickly and $20,000 soon after

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Markets Update: Altcoins Gain Against BTC Amid Consolidation – Bitcoin News

The recent bounce in the value of many leading cryptocurrencies relative to fiat currency has comprised the first bullish action in several months. Since bottoming out during the third quarter of 2020, many leading altcoins have made significant bullish moves against BTC.

BTC and BCH Produce Sideways Consolidation

BTC has entered its fourth day of consolidation at approximately $4,000, with bitcoin core currently trading for $3,940 on Bitstamp and $4,040 on Bitfinex. As of this writing, BTC appears to be on the verge of posting its first green monthly candle since July 2020.

BTC/USD – Bitstamp – 1W

Bitcoin core currently has a market capitalization of $69.88 billion and a dominance of 51.9%. Approximately $7.3 billion worth of BTC has changed hands during the last 24 hours.

BCH is currently in its fourth day of consolidation above $140 following Feb. 18’s 15% rally. January is presently poised to comprise the first green monthly candle for BCH since July 2020.

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BCH/USD – Kraken – 1W

When measured against BTC, BCH has similarly consolidated for several days at the 0.036 BTC area.

BCH/BTC – Bittrex – 1W

Bitcoin cash is currently the sixth largest crypto asset with a capitalization of nearly $2.55 billion and a dominance of 1.89%. Almost $1.18 billion worth of BCH was traded over the previous 24 hours.

Leading Altcoins Make Significant Gains Over BTC in Recent Months

A number of top altcoins have made considerable strides over BTC in recent months, suggesting that an altcoin season may be quietly underway.

Ethereum currently appears poised to post its second green monthly candle in months against BTC. ETH is currently trading for approximately 0.0376 BTC, up roughly 50% from December’s low of 0.025 BTC.

ETH/BTC – Poloniex – 1W

ETH is currently trading for nearly $150. Ethereum is the second largest crypto asset by capitalization with a market cap of $15.6 billion.

Despite posting a bearish performance during February so far, XRP has generated three green candles since September, with XRP currently trading for 0.000081 BTC, more than 95% higher than last year’s low of 0.000041 BTC.

XRP/BTC – Poloniex – 1W

Currently trading for $0.32, XRP is the third largest cryptocurrency with a capitalization of nearly $13.24 billion.

LTC to Post Fifth Green Candle Against BTC in 6 Months

Litecoin has been among the strongest performing altcoins relative to BTC in recent months, with LTC about to post its fourth consecutive green monthly candle after gaining 36% since the start of February. LTC is currently trading for roughly 0.0124 BTC, up 80% from December’s low of 0.0069.

LTC/BTC – Bitfinex – 1W

Litecoin is trading for $49 and comprises the fifth largest cryptocurrency with a market cap of almost $3 billion.

TRX appears poised to post its first red monthly candle in five months, following a 13.5% drop against BTC since the start of the month. Despite February’s performance, TRX is currently trading for 630 satoshis, up 120% from November’s low of 290 satoshis.

TRX/BTC – Binance – 1W

Tron is trading from $0.025 and comprises the ninth-largest cryptocurrency with a capitalization of $1.67 billion.

ADA is less than a week away from posting its third consecutive green candle, with cardano currently trading for 0.0000116 BTC, up nearly 40% from December’s low of 835 satoshis. Cardano is worth $0.046 and comprises the 11-largest crypto asset with a market cap of $1.19 billion.

ADA/BTC – Bittrex – 1W

How long do you expect the current altcoin season to last? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, Tradingview

Why the Future of Cryptocurrency is in Consolidation

Cryptocurrencies are blasting off again, but which ones are legit and which ones will fall just as fast? In this post, I propose that the ultimate winners will be the ones that benefit from consolidation. Here’s what I mean.

By: Hugh Kimura | Updated: February 21, 2020

As traders, we make money by identifying potentially profitable situations in the markets. This might be identifying chart patterns, playing a certain type of news event or understanding the fundamental dynamics behind price movements.

So when it comes to cryptocurrencies, it is helpful to think two steps ahead and imagine what the cryptocurrency landscape will look like, 5 years from now.

Sure, all your buddies are making 400% returns on those crapcoins now. But will they still have those profits in a year?

Will Bitcoin still be king?

Or will there be many cryptocurrencies happily sitting around the campfire, singing Kumbaya?

Nobody really knows and I’m the last person who you should be listening to, when it comes to making predictions about the technology behind cryptocurrencies.

However, I would like to give you some ideas to think about before you make your next investment or trade. This is based on my current understanding, personal experience and research on the cryptocurrency markets.

As you know, things change quickly in the cryptocurrency world, so what I think today, might change tomorrow. But if we stay informed and keep an eye on the big picture, then we should be able to see changes coming, much sooner than the general public.

This is one of those big picture ideas:

The cryptocurrency markets will consolidate dramatically.

Here’s how that might happen…

Bridging the Gap Between Fiat and Digital Currency

Money as we know it, or fiat currency, has been masquerading as digital currency for quite awhile. Systems like Fedwire, PayPal and ACH have allowed you to transmit fiat currency digitally.

But even though it’s digital, there are still so many rules when it comes to when and were you can send that money. If you are in the US, have you ever tried to send money to someone in Nigeria, via PayPal?

Good luck with that.

The promise of Bitcoin and other cryptocurrencies is to give anyone the ability to send money to anyone they choose, regardless of location, nationality or bank affiliation. But having so many different cryptocurrencies available can cause a problem, because you will have to exchange the currency you own for the currency that your counterparty wants to get paid in.

For example, let’s say that you own $1,200 worth of DASH right now. But you want to by a new pair of pants from a website that only accepts Ripple.

On most exchanges right now, you will have to exchange your DASH for Bitcoin or Ethereum, then trade the Bitcoin/Ethereum for Ripple. That’s two additional transactions and that can make your pants pretty damn expensive.

The Need for Seamless Currency Exchanges

This is where Interledger-type solutions come in. This protocol would make the exchange of digital and fiat currencies completely transparent to the two parties involved. I recently went to an Interledger Meetup in San Francisco and it made me realize that this type of solution is necessary and will probably be available very soon. Interledger has a working prototype and similar projects probably do too.

It was a fun event.

…and the fact that they had wine didn’t hurt.

I also realized that when this becomes available, then there should be a fairly rapid consolidation of cryptocurrencies, leading to most people in the general public only holding 2-3 primary currencies to pay for things in real life.

Take a very specific use case token like Storj. You will only have it if you want to store data on the Storj network, or you want to make money by renting out your drive space to people on the network. Right now, people are buying it for pure speculation. But they will need to sell it at some point because you can’t buy a new TV on Amazon with Storj.

Something like Interledger should make the process of turning Storj into US dollars, fast and easy.

Therefore, the value of these types of coins will probably drop in value very quickly when something like Interledger goes online:

  • Coins tied to very specific services like: Sia, Storj and Civic
  • Coins that have very high transaction costs
  • Coins that have very slow transaction speeds

Which brings me to Bitcoin…

Have You Actually Used It? Bitcoin Fails as a Real World Currency

With all the hype surrounding Bitcoin at the moment, not many people have actually stopped to try and buy something with it.

Let me tell you, it’s pretty shit.

I tried to buy a Ledger Nano S from the Ledger website and the transaction timed out. But I was still charged for the transaction.

…and it cost me 15% more than if I bought with Paypal…which I will never get back, even after the refund.

I’m not the only one who believes this. The founder of Bitcoin.com has sold all of his Bitcoin and says that it is useless.

It’s important to understand the shortcomings of Bitcoin and other cryptocurrencies because it is the reason why an Interledger-like solution might lead to a consolidation of the cryptocurrency markets.

Why Something Like Interledger Could Lead to Cryptocurrency Consolidation

In a nutshell, Interledger works by creating a network of trusted dealers who do currency exchanges. Transactions run through this network, when an acceptable “path” is found. It may take multiple “hops” to finally exchange the source currency for the destination currency.

For example, let’s say that you want to spend your Monero to buy a new M6 straight from the factory, in Euros.

The transaction might look something like this:

  • Dealer A: Accepts Monero from you and coverts it to Ripple
  • Dealer B: Accepts Dealer A’s Ripple and converts it to USD
  • Dealer C: Accepts Dealer B’s USD and coverts it into EUR and sends it to BMW

Obviously, the more dealers the transaction has to go through, the more transaction costs there are and the more expensive the transaction gets.

Therefore, these networks will probably start to rely on a select few currencies to keep the transaction costs low. On the customer side, people will probably want to keep the same currencies on hand because they know that it will lower their transaction costs, through the network and person to person.

So the coins that will probably win out are the coins with the fastest transaction time and the lowest transaction cost.

Hint: It’s not Bitcoin.

But it could be, if the Lightning Network can create a solid product.

So many possibilities ��

Conclusion

Interledger is not the only group that is trying to do this. There are other teams working on similar solutions.

It’s not important to know all of the details, but it is important to understand how these solutions will affect the overall cryptocurrency landscape. The ICOs that survive may not be as valuable as you think they will be, simply because it will be so easy to exchange for them, only when you need them.

The real winners in the cryptocurrency world should be the solutions that actually deliver on the promises that Bitcoin was supposed to provide…cheap, fast, monetary transactions to anyone in the world.

Which cryptocurrencies do you think will be the ultimate winners?

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