10292018 Market Primer

Market Research – Weekly Market Primer (10/29/2018) – Download PDF

HOT & COLD Cryptos

• HOT : ZEC (4.65%) – Zcash successfully released their Sapling network upgrade last night at block 419200. We expect ZEC to outperform for the remainder of Q4. Read more HERE
• HOT : ZRX (6.94%) – 0x was successfully added to Coinbase last week. Price jumped to $1.10 on the night of the addition. Price has fully retraced to $0.78, the price prior to the announcement. On a risk/reward basis, we view this as a great opportunity.
• COLD : DOGE (4.94) % – Dogecoin has come off of its highs, $0.016, over the past month. It has began to retrace the run it had on the announcement of Dogethereum, a bridge of Dogecoin to create a smart contract. It is currently trading $0.0038 and we expect prices to remain in a range of $0.0025 – $0.0040.

Market Overview

• BTC/USD testing key support $6200-5950, a break below opens up 5500, and 5000
• BTC/USD sold off sharply during the US session, on the break of 6380.
• BTC/USD expected to be in a range of 6000-6400 for the remainder of the week
• Canadian exchange was “hacked” and all funds lost, spread some fear across the market
• End of month rebalancing also had some influence on the price decline
• ETH/USD support levels: $194, $188, $165; resistance levels: $225, $250, $285
• ETH/USD SHORTS are on the rise and we remain bearish ETH, it is expected to underperform on a relative basis
• Alt-coins near all time lows, finding weak support across the board
• Select alts looking good on a risk/reward basis: ZRX, ZEC, XLM, XRP, XMR
• Trading volumes are below average and we expect volumes to remain muted until Bitcoin chooses a direction
• RVN and DCR were listed on Binance this month and have provided decent opportunities long and short
• Last week Fidelity announced it will be moving into the cryptocurrency markets in Q1-Q2 2019; providing services to its institutional and retail clients
• Rumors are out that Northern Trust and State Street (large custodians) may be moving into the cryptocurrency space this quarter or early 2019
• BTC dominance has stagnated around 54% over the last week. We expect BTC dominance to remain in a range of 48% – 58% for the near future
• Alt-coin market has risen from $85bln to $105bln. We are watching this closely to determine direction
• We expect alt-coins to outperform Bitcoin during this rally.

What We’re Reading

• Institutions Are Coming for Your Crypto. See more HERE
• The Race to Replace Tether (In 3 Charts). See more HERE
• UK Government Says It Will Update Crypto Tax Guidance By Early Next Year. See more HERE
• Privacy Crypto Zcash Goes Live With ‘Sapling’ Network Hard Fork. See more HERE
• UK: Gov’t Taskforce Proposes Crypto Regulation Changes, Questions Crypto Definition’. See more HERE
• Crypto Exchange Bitstamp Acquired by Belgian Investment Firm in ‘All Cash Deal’. See more HERE
• China’s Bitcoin Mining Dominance Imperils US Companies and the Government Is Worried. See more HERE
• Binance CEO Lauds Fidelity Investments Move into Crypto Market. See more HERE
• Crypto Exchange OKEx Delists Over 30 Trading Pairs for Weak Volume. See more HERE

Charts of the Week

BTC/USD (4HR Candles) – https://www.tradingview.com/x/1DnAnH1K/

• BTC/USD test significant support and trend line at $6,200; if this breaks we expect a test of $5850-5950. We are slightly bearish short-term.

BTC/USD SHORTS (4HR Candles) – https://www.tradingview.com/x/Sx91Oxja/

• BTC/USD SHORTS are consolidating and strengthening the wedge. At this point they can break either direction. We are slightly bullish short-term.

Heatmap of the Week

Cryptocurrency Heatmap (10/22/2018 – 10/29/2018)

Cryptocurrency Correlation Matrix  (Last 90 Days)

• Correlations among cryptocurrencies has increased over the last week, signaling uncertainty in the market