Crypto market update. 1st week july 2020

As it can be seen, we are still within a range of stable bitcoin prices, although there is a slight downward trend as shown in the graph below.

This trend has been showed since the fall of prices in March this year and even softer falls are expected in coming days. Although there are contradictory analyses among different market experts, as some have been saying that the upward movement of bitcoin prices is imminent for these weeks after halving and it really doesn't come because there is a significant resistance at $10,000 and an equally strong support line at $9,000. 

One of the explanations that experts from various agencies are giving about the behavior of BTC prices in terms of low volatility is that the bitcoin is preparing for a transition to a gold equivalent that this price compression ends with an upward trend more consistent with the BTC's price/quality ratio, which is estimated at $12,000 according to analysts at Bloomberg, traditionally very optimistic about the BTC. Cointelegraph analysts agree with this assessment and also predict a potential BTC price of $12,000. On the other hand, the rumor that Paypal will accept bitcoins on its payment and transfer platform increases the probability of reaching that long-awaited price and may finally break the resistance marked many weeks ago.

For them there are more than conclusive signs to make such claims, including the increase of active crypto wallets, interest in the BTC futures market and the rise in the number of establishments accepting bitcoins in recent months and those which are planning to do so in the short term.

On a conservative point of view side, John Bollinger himself, the creator of the Bollinger bands as a tool for analysing market values, being a classic indicator of market volatility and in the case of BTC prices helps us to locate the BTC price according to its past performance to determine whether it is between support or resistance zones in a dynamic way around a moving average.

Just an example how Bollinger Bands can indicate the level of volatility in different markets.

On the supply side of bitcoin, particularly BTC mining, it appears that the increase in BTC's supply despite the halving from the second half of June and the decision of many miners to sell more bitcoins than they have mined in June have had a direct impact on the moderate decline in BTC prices.

As a punctual fact, on July the second, the bitcoin price dropped below the $9,000 resistance level briefly, before rebounding to similar values held in previous days. 

Regarding the second more importante cryptocurrency, Etherium is having a very consolidated behavior in the market and has already surpassed the Bitcoin Cash price, traditionally with values higher than Etherium, and all because of the enormous expectations raised by its imminent version 2.0 in which it will replace the current Proof-of-Work Consensus (PoW) with the Proof-of-Stake one (PoS) in mining new Etheriums, which allows to achieve lower costs and greater scalability. This update will give the Etherium’s blockchain the ability to raise the average transaction per second (TPS) to 11 and therefore the etherium network might become a "global network ecosystem" and its currency a great competitor against official money by removing the predominance of Bitcoin.

Although this process is delaying, it is clear that it has already begun since the first block genesis of etherium PoS has already been created by the company Prysmatic Labs and Sigma Prime last May, and since then many errors have been detected and corrected to have the final interface ready as soon as possible to be used by the end user.

Etherium is a large ecosystem that accommodates thousands of decentralized applications "dApps" and adding more and more that moves many hundreds of millions of dollars and whose upgrade to version 2.0 will take an even greater qualitative jump and may become the blockchain leader in the crypto industry by offering a new reality.

We have to talk about the an importa ratio between bitcoin and etherium, the ETH/BTC pair and the indicator that measures their relation recently made by the German agency The Blockchain Center called "Flippening". This is an index that measures the use and interest in the two blockchain networks, and that allows us to know how ETH is in relation to BTC. It is not simply a matter of knowing that ETH's capitalization has surpassed BTC’s one, which is still far from happening, it is rather the trend of 8 indicators that show and compare the state of both blockchains. The ETH is ahead in 2 out of 8 indicators, which are the transactions counting and fees. The flippening index of ETH respecting BTC has once again exceeded 50% as it can be seen in the table below where the 8 factors and their percentage are clearly showed too.

“Flippening Index”: New cripto-index which measures the ratio ETH/BTC - Source: - 01.07.2020.

On the other hand, when talking about the altcoins, apart from the most important one which is the Etherium, we have a new record in capitalization reached by the stablecoin USDC on July 3rd breaking the barrier of one billion dollars, a milestone that has happened for the first time since the currency was launched in October 2018 by Coinbase and Circle. USDC is the second largest stablecoin behind tether (USDT), which ranks 3rd in the CoinMarketCap’s list. This increase in USDC represents a 144% growth since the beginning of the year. This milestone is comparable to that achieved by its sister stablecoin, the tether when it recently overtook Ripple to become the third largest cryptocurrency.

Three major events may be within this great growth experienced by the stablecoins: the increased demand for low-cost transfers, the financial crisis brought about by the COVID-19 pandemic and the impact of the massive growth of the Compound protocol and its cryptocurrency appearing within the industry, a very interesting matter to be explained in future articles.