After two weeks of Bitcoin consolidating and forming new 2018 volatility lows almost everyday, the price underwent a sharp decline to stay in the triangle pattern which had been forming since January. Much of the altcoin market has been mirroring Bitcoin recently. While Bitcoin continued its consolidation, many altcoins were also trading in a tight range with little volume. When the drop occurred, most altcoins underperformed recording double-digit losses.
The overall market capitalisation for cryptocurrencies remains just above the 200 mark at $201 Billion. This is around the same market capitalisation as HSBC holdings, and also Mastercard. The market capitalisation has decreased approximately 7% over the past seven days.
Key News Developments
Binance Makes Several key Announcements
Binance has been in the news on several occasions this week with some significant news. The first key announcement regarded a change to their listing fee policy. Listing fees from now on will be proposed by the project which aims to get listed with no minimum amount. Furthermore, 100% of the fees will be donated to the Binance Charity Foundation (BCF).
The second key announcement regards the BCF. Changpeng Zhao published a Medium post outlining the architecture to how the BCF will function. Zhao published a GitHub article in 2014 discussing many of the same ideas but lacked the resources to execute the idea at that stage. The ideas focus on leveraging decentralized technologies to improve charitable organizations. With Binance now being the largest cryptocurrency exchange by trading volume, Zhao seeks to tackle some major problems he identified. The main issues identified are lack of transparency, excessive administration costs, and outright corruption.
Binance also decided to delist four projects during the week. All four projects dumped on the delisting news. The projects included Bytecoin, ChatCoin, Iconomi, and Triggers. The 24 hour depreciations on the news of announcements ranged from around 7% to 37%.
Venezuela’s Petro Coin must be used for Passport fees
Venezuela completed their ICO for their national digital currency, the Petro Coin, in February and March of this year. The ICO was estimated to have raised at least $735 Billion despite evidence that the claims of oil backing this digital currency being questionable. The digital currency was launched on the NEM blockchain and it was proposed that each coin would be backed by a barrel of oil in the $5 Billion oil reserves in the Atapirire region. An investigation by Reuters found little evidence of oil industry activity in the region. Veneuzeula continues with the coin and will now force citizens to use the coin to pay for passport fees. Venezuela also recently announced that the coin is now not just backed by oil but also by other commodities owned by the Venezuelan government.
Bitcoin Price Analysis
For two weeks, Bitcoins volatility as measured by the average true range (ATR) recorded new 2018 lows almost every day. The most recent drop brought an end to this as Bitcoin dropped from around $6660 to approximately $6230. This brought on an increase in volatility and also seen price action move outside the triangle pattern which has been forming since January. Price has since retraced back up to the trendline forming the bottom of the pattern but appears to be experiencing some resistance. This could be a case of support turned resistance. The retracement is on a low amount of volume showing it lacking strength. Many have been anticipating a hard bullish or bearish breakout from the triangle pattern. This most recent movement makes a bearish breakout far more likely. Some support has been in play around the $6250 level. The price is currently trading around $6300.
Bitcoin Breaks Bottom of Triangle Pattern – Source: Tradingview.com
Ethereum Price Analysis
The largest altcoin by market cap, Ethereum, mirrored Bitcoin’s performance while Bitcoin was consolidating. RSI on both Bitcoin and Ethereum was around 50 showing equal pressure from buyers and sellers. Price action in both coins was forming higher lows and lower highs. When the drop occurred in Bitcoin, a sharp decline also took place in Ethereum showing that the market leader Bitcoin still has a large impact on the direction of the altcoin market. Bitcoin currently represents approximately 54% of the total cryptocurrency market cap. The drop has seen Ethereum return to sub-$200 levels. Ethereum underperformed Bitcoin during the drop. Ethereum decreased from around $226 to approximately $187, a 17% decline. Bitcoin depreciated from around $6660 to around $6250, a 6% decline. Bitcoin has proved to be a much better store of value than altcoins during this bear market.
Ethereum Underperforms Market Leader Bitcoin- Source: Tradingview.com
Altcoin of the Week- 0x District
One coin which has performed strongly this week and was little impacted by the market drop has been 0x District’s digital token, ZRX. ZRX has had around a 10% appreciation since Monday, appreciating from $0.72 to $0.79. The key catalyst for ZRX’s performance this week was a listing to Coinbase Pro.
ZRX reached a high of around $0.9 during the week but retraced at the daily 200 EMA. There was speculation during the week of the coin being listed to Coinbase Pro after it appeared on the Coinbase tax tool.
ZRX Records Strong Performance After Listing to Coinbase Pro – Source: Tradingview.com
As Q4 progresses, a bearish breakout becomes more likely after price action for Bitcoin moves below the triangle pattern which has been forming since January. With altcoins underperforming in this years bear market, Bitcoins share of the overall market cap has increased to 54%.
This large share of the market cap means Bitcoins price action has a significant impact on the movements of the altcoin market. Bitcoin has represented the best store of value during 2018 so far. Can anything happen with altcoins during the rest of 2018 to change this?