Crypto market update. 31st August to 6th September
Within the last days of the week there was a dramatic drop in the BTC price very close to the $10,000 support line. The question is whether this line is really as strong as it was thought weeks ago or whether it is going to break easily.Source :fxempire.es
In fact, in just 3 days the BTC price has lost more than 20% falling from $12,042 to just under $10,000 (to about $9,980),with some recovery of about 2.3% right after touching support.Source: CoinMarketCap
In response to the question whether the 10,000 USD support is still solid, analysts are already projecting other support line following "the Fibonacci sequence" (which is roughly a short-term projection that extrapolates past performance into the future, when a major trend change is detected). According to the analysts, the new possible support line would be at 7,000 dollars, and they even think that this would still be healthy before a new "bull run" occurs.
After saying this, there are two possible scenarios:
- A support of 9,600 dollars or
- A support of $7,100 according to the Fibonacci sequence.
So, it can be said then that if the price does not maintain the first support of $9600, the BTC price can set a new support close to $7000.
If the BTC has this performance, what is going on with the Altcoins?
This deep drop, as usual, drags the other altcoins with generalised downward prices, but with less dramatic drops than the main cryptocurrency.
And as we have said before, when there is a big drop in the BTC price, this is transferred to the altcoins starting with the first altcoin of the crypto market, the Etherium, and in this case the drop has also been quite drastic, with a 40% correction going from 486 dollars to 319 in just 4 days.
Some traders blame what they call the bursting of the "DeFi bubble" (Decentralized Finance based on Etherium mainly) (see DeFi article). This opinion is quite drastic because the DeFi market has only just begun to expand.
Again the downward trend has been interrupted and it has recovered more than 8% in the last day of the week following again the correlation with the bitcoin.
Next we will show the 5 cryptocurrencies that have had a great performance this week in a context of great falls in most of the altcoins:
1st) Augur (REP): with a 34% increase. This is an Etherium based ecosystem for making sport betting predictions especially for the American Football League. An industry with a great potential and high turnover.Source: Criptonoticias.
2nd) Enjin Coin: a game platform and tools to create them, whose token increased in value by 27.87% more this week. Possibly the reason for this increase is due to the listing of this token in the Swiss Crypto Exchange.
3rd) Monero (XMR): a highly private and decentralized crypto that has had an increase in more than 16%, due to the rebound produced after falling from 95 to 60 dollars during last August. This recovery may be due to the use of this crypto from start-ups that give incentives in XMR to coffee producers in developing countries.
4th) KuCoin (KCS): it is the native token of the exchange platform with the same name that grew more than 12%, growth that became more remarkable from the beginning of September, when its token burning plan has been carried out after the purchase of 78,000 tokens, which is a way to increase the value of circulating tokens.
5th) Etherium Classic (ETC): with a growth over 10% this week, possibly after the announcement of a hard fork in its network (see BTC fork article), which makes the price rise just before this remarkable event occurs.
Apart from the remarkable performance of these 5 altcoins according to “Criptonoticias” in a context of generalized downtrends there are other less known altcoins that have also had a great increase in spite of the circumstances, they have experienced very interesting recoveries. Two of these values are related to DeFi and the third is a classic cryptocurrency.
The three remarkable cryptocurrencies are NEM (XEM), and Loopring (LRC) and UMA, these two from DeFi protocols.
- The Crypto XEM could recover a 7% thanks to a new listing on an exchange and the recovery of stolen funds from hackers worth 500 million dollars.
- Loopring (LRC), with an increase in 18%, which has integrated the Band protocol to provide data to help make predictions about cryptos that support the protocol.
- UMA, token that increased almost another 18%, and whose protocol is in charge of building infrastructures for Smart Contracts of a very high value in ETH.
Such drastic corrections of the whole market are something manageable for the most experienced traders, not so for those who have only recently entered the market, and it is perfectly logical that these corrective movements occur when the values have had a great upward trend for many weeks in a row
There are news that make us think that the massive adoption of cryptocurrencies is going well, some of them can be the following:
- Visa and Mastercard are allied with startups related to cryptocurrencies.
- Governments are using the seized cryptocurrencies, which implies their acceptance as financial assets.
- Many tools of the blockchain of certain cryptos are used for many processes of great added value, for example for product traceability, developments for intelligent cities, internet of things, traceability of containers in international trade transport of goods, for transparent voting, and much more.
- In some states of the world, taxes can already be paid with BTC or ETH, and they use the blockchain of some cryptos for administrative processes of different types.
In conclusion, it can be seen that there is still much more to be done to attract large financial capital from traditional markets to the crypto market, but it is a process that is taking place and this is why very interesting correlations are being created between both financial markets.