Data shows that $1,000 intraday surges in Bitcoin price often lead to double digit corrections shortly thereafter.
This week Bitcoin price pulled off an incredible rally that appears to have exceeded the expectations of many investors. Data from Cointelegraph Markets and CoinMarketCap shows record trading volume across multiple crypto exchanges occurred as Bitcoin rallied to $9,400 but this doesn’t mean that the long awaited bull market has started.
History shows that whenever the Bitcoin (BTC) price increased by more than $1,000 on a single day, it was susceptible to a major correction. The recent surge from $7,700 to $9,400 and the pattern of corrections identified by analysts suggests a pullback is likely.
Several technical indicators indicate the possibility of a short-term correction. Most notably, the relative strength index (RSI) on the daily chart is at 72, suggesting Bitcoin has become overbought.
Strong arguments for a severe Bitcoin drop
The Bitcoin price surged past three major trend reversal points as it hit $9,400. It surpassed the 200-day simple moving average (SMA), the 200-day exponential moving average (EMA), and the 0.618 Fibonacci Retracement level calculated in between $3,600 and $14,000.
Typically, Bitcoin does not surpass all three key resistance areas in an intraday move without any sign of a pullback. When it does, it leaves the asset vulnerable to a steep drop as traders look to take profit on their positions.
Timothy Peterson, CAIA Manager at Cane Island Alternative Advisors, said that Bitcoin price gained more than $1,000 within a 24-hour span only 14 times in its history.
According to Peterson, after intraday $1,000 moves, Bitcoin price fell by 5 percent, 21 percent, and 38 percent respectively.
The price tends to see major drops after a 10 to 20 percent move because it shifts the market structure in a short period of time. The market often goes from a majority short to majority long, raising the probability of a large long squeeze.
On BitMEX, for instance, the funding rate of Ether (ETH) futures is over 0.11 percent. This means, when a trader opens a $100,000 long position, the trader would have to pay $110 every eight hours, or $330 every day to keep the position open.
When the price of cryptocurrencies begin to fall and lose momentum, the expensive funding rates pressure long holders to adjust their positions, causing a market drop.
Variables to watch out for
The Bitcoin market can remain irrational for extended periods of time. Funding rates can be significantly high and the market can be overbought for days or even weeks before a correction ensues.
Currently, the overall sentiment around high-risk assets is improving based on hopes of reopening economies in the U.S. and Europe. As a result major markets and crypto prices are moving higher.
Bitcoin is likely benefiting from growing positivity in the global equities market, causing it to see an overextended upsurge in a short time frame. Even though Bitcoin appears to have changed its trend from bearish to bullish, any downturn in traditional markets or negative news related to the coronavirus pandemic could easily lead the crypto market to give up its recent gains.
In new legislation, the Cayman Islands is looking to clarify rules on crypto exchanges, including registration and sandbox licensing.
On April 28, the legislative assembly of the Cayman Islands gazetted five new pieces of legislation governing crypto businesses — especially exchanges.
How the new legislation would change the Cayman Islands’ crypto industry
The Virtual Asset Service Provider Bill would establish definitions and registration requirements for companies providing crypto services including exchanges, custodians and decentralized financial operators. Accompanying this bill are amendments to other reigning pieces of finance legislation for securities and stock exchanges.
A provision included in the VASP Bill is the sandbox license. Such licenses would allow companies working on technologies that run risks, including to anti-money laundering requirements, to register for one-year licenses to test out their models.
The press announcement accompanying the legislation describes the proposed system as “a flexible foundation which promotes the use of new technology and innovative enterprise.” Continuing:
“The proposed framework incorporates relevant anti-money laundering, countering the financing of terrorism and counter proliferation financing (AML/CFT/CPF) recommendations adopted in 2019 by the Financial Action Task Force (FATF).”
FATF travel rule and tax haven islands
The Cayman Islands are known for their lenience in business registration. The European Union has placed the country on its blacklist of tax havens. Indeed, the islands are one of the names that crops up as the potential home of Binance’s migrating registration.
The current legislation has only been gazetted and will have to wait for the next meeting of the legislative assembly. Given the global transition to FATF’s travel rule and its establishment of traditional banking requirements for crypto businesses, the Cayman Islands will likely need to change something about their current system.
Fernando Carrillo is looking for opportunities in the crypto sphere after a long-time career acting in TV and film.
Long-time Venezuelan actor and singer, Fernando Carrillo, has announced his retirement from acting. He has decided instead to venture into the crypto business. Starting May 1, Carrillo will become the CEO of Fight to Fame, though his role only extends to Mexico and the Latin American region.
According to an article published on April 29 by the Mexican newspaper, El Universal, Carrillo will lead the Singapore-based crypto firm founded by Morgan Shi. This company is known for issuing the FF Token.
Actor sees Blockchain as the “future”
Fernando, who is known for serial dramas such as “Siempre te amaré” and “Maria Isabel,” and films like “Pit Fighter” and “Gone Hollywood, “plans to get married and start a family, running his career in the world of cryptocurrencies.”
Carrillo spoke about the FF Token, praising its success in Asia. He also believes that the blockchain is the future. As such, he will be working to make the token a direct competitor from Bitcoin (BTC).
With regard to FF Tokens in the Mexican market, the actor commented:
“It is a world that I am getting to know, wonderful, just as you can win, you can lose. We are going to launch 40 million cryptocurrencies to the Mexican market, taking into account that we sold 37.5 million in Peru (…) Now we want to expand in Latin America.”
A fraud scheme?
The founder of Fight to Fame has been the subject of controversy in recent years. Some allegations claim that the company is a fraudulent scheme.
According to a Wall Street Journal report in 2019, Morgan Shi’s real name is “Shi Jianxiang,” who is a fugitive from Chinese authorities. He is accused of committing fraud and causing “trillions” of dollars to vanish.
Interpol issued a global wanted-persons notice against Shi in 2017 at the request of the Chinese government, who accused him of “crime of illegal fundraising by fraudulent means.” Despite the accusation, a spokeswoman for the FBI claimed not to have a warrant for Shi.
Carrillo’s defense on Shi
On the controversial reports on the legal status of Shi’s activities, Carrillo came to his defense:
“Morgan (Shi) lives in Los Angeles. Communist China persecuted many wealthy people to expropriate their wealth, but he was able to get out of there. If you search for his name on the internet, there will be some accusations that he is searched by Interpol, but it is a montage. Since working with him, he has been a righteous person, who has brought me knowledge, riches. I believe in what he’s doing.”
Cointelegraph reported in 2019 that former world boxing champion, Mike Tyson, refuted his involvement with Fight to Fame. The company was accused by the crypto research and analysis firm, Cointelligence, who called it a “total fraud.”
Chinese Anhui province gov launches its first blockchain platform.
The government of Anhui, a province in eastern China and a part of “Yangtze River Delta Economy Region”, has officially launched its first blockchain platform for providing government services. The launch occurred on April 30, according to local news reports.
Starts with local law sector
“Blockchain + Electronic Certificate and License” is also the first application being launched on the government’s blockchain platform, says the report. The application will initially place lawyer’s practice licenses on the blockchain. This will help to provide better transparency and authentication in the sector. The license explains that:
“[...]The newly-online electronic license has the functions of viewing usage records and management records. Each authorized action system will automatically record and store certificates, and all usage actions. This will prevent fraud, enhance the security and credibility of the electronic licenses.”
According to the report, The Provincial Data Resources Bureau and the Provincial Department of Justice are also carrying out similar pilot projects in Bozhou city on judicial administrative certificates and licenses. The government plans to extend these applications to the Yangtze river delta region.
The local government aims to adopt more e-government blockchain applications on the platform in the near future. Their goal is to more fully digitize the government’s infrastructure, reduce bureaucracy, and provide more efficient services. The report added that:
“[...]It lays a foundation for cross-departmental and cross-regional joint maintenance and utilization of government data and improves cooperation.”
Blockchain adoption in China has grown throughout April
As Cointelegraph reported, China launched its nationwide Blockchain-based Service Network for commercial use a few days ago. The Industrial and Commercial Bank of China, or ICBC, released the first blockchain white paper for the bank sector. The city of Chongqing also launched its first provincial-level Blockchain Innovation Alliance.
The crypto market has been subjected to immense volatility throughout 2020, with Bitcoin plummeting to lows of $3,800 in mid-March before incurring an intense rebound that has since led it all the way up to highs of $9,500.
It appears that this immense volatility — and especially that seen throughout the past couple of days – has sent crypto traders into hiding, as the benchmark cryptocurrency’s open interest has been diving while traders flee BitMEX.
This occurrence is likely to favor bulls in the near-term, as the majority of spot traders tend to lean towards taking more passive positions, meaning that the crypto’s volatility may soon subside as it enters a stable mid-term uptrend.
Bitcoin open interest craters as traders flee crypto market
Active margin traders have been subjected to multiple unprecedented movements in recent times that have cost the majority of them large sums of capital.
The meltdown in mid-March created a cascade of liquidations on BitMEX, leading traders in long positions to rapidly be liquidated as buying pressure all but evaporated.
Trading on the popular platform was then shut down temporarily due to a reported “hardware flaw” – although some have speculated that the liquidations would have continued pushing Bitcoin lower had BitMEX not halted trading.
Although there are many other platforms besides BitMEX, the effects this occurrence sent shockwaves across all exchanges, even leading Bitcoin’s spot price to drop towards $4,000 for a short amount of time.
In the time following this movement, the cryptocurrency’s open interest dived before stabilizing around the $500 million level until yesterday, when Bitcoin’s rapid rise to highs of $9,500 liquidated another over $100 million in short positions.
This led BTC’s open interest to decline towards $400 million, a sign that traders are fleeing the crypto market for the time being.
Recent liquidation imbroglio sparks exodus away from BitMEX
Part of the reason why Bitcoin’s OI on BitMEX has been declining is because the platform is seeing large BTC outflows as it loses its market share.
Larry Cermak – the director of research at The Block – spoke about this trend in a recent tweet, explaining that the crypto trading platform lost 50 percent of its market share in the time since November of 2019.
“BitMEX has been drastically losing market share in the last 6 months. By the end of November, BitMEX had 41.6% of the total open interest and now only less than 21%. So they lost ~50% of their market share now. Eventually if you don’t innovate, you will be overtaken.”
If the crypto market’s mid-term trend is governed more by retail investors than by margin traders, this could lessen the volatility and help increase the sustainability of its future uptrends.
Nasdaq is partnering with the blockchain solution provider R3 to build institution-grade digital assets and marketplaces.
The world’s second-largest stock exchange and capital markets technology company, Nasdaq, has entered a partnership with enterprise blockchain solutions platform, R3.
R3 announced the partnership on April 29, 2020, stating that Nasdaq will use its blockchain software, Corda, among other services. Their intention is to help financial institutions easily build and deploy institutional-grade digital assets.
This is a long-term, non-exclusive partnership between the two firms, which means Nasdaq can still collaborate with other blockchain solution providers to work on new projects.
R3’s compatibility with highly regulated environments inspired the partnership
Johan Toll, the head of digital assets at Nasdaq, said that they entered into a partnership discussion with R3 due to the platform’s compatibility with highly regulated environments that have a high threshold for the quality of services.
“Their platform fits well into Nasdaq’s technology ecosystem and by connecting to the platform, we can harness the power of a scalable design that delivers a new level of interoperability and ease of integration to any current legacy technology system.“
Nasdaq, along with R3, plans to bridge the gap between financial institutes and blockchain-based digital asset solutions. They will help organizations issue tokens and build digital asset marketplaces. They will also support these organizations through various processes such as issuance, trading, settlement, and custody.
Eyes on the future
Nasdaq is preparing to deliver its services to organizations as they realize the potential of digitization and move from manual processes to digitized means.
Toll predicts that in the near future, we will see various financial and non-financial marketplaces for trading tokenized physical assets. This, he adds, will increase the transparency in the market and reduce friction by setting aside third parties.
There’s a great future for blockchain and digital assets in the financial sector but we first need to tackle blockchain’s interoperability issues, mentions Toll. Even the World Economic Forum recently published a white paper explaining that blockchain’s lack of interoperability is a major hurdle for enterprise use.
The current financial situation will become virtually impossible to maintain in the very near future. In Lebanon, the situation is already getting out of hand following the domestic fiat currency crashing.
Various countries are struggling to ensure their fiat currency has real world value.
Lebanon Faces two Crises at the Same Time
This is primarily apparent in African countries, as well as regions such as Venezuela, Argentina, and so forth.
Even in Lebanon, things have gone from bad to worse in very quick succession.
The local currency crashed significantly driving up prices of general items such as food and beverages.
This has resulted in riots breaking out throughout the country, albeit some regions have it far worse than others.
Local banks are being smashed to pieces and cars are being set on fire as the riots grow more violent in nature.
It is expected that these anti-government protests will resume for some time to come.
A crashing domestic currency during the coronavirus crisis is a cocktail for disaster.
Unfortunately, it does not appear as if the domestic currency will bounce back soon.
Addressing this situation becomes of the utmost importance, although not much can be done.
Printing even more money in Lebanon would devalue the currency even further.
Bitcoin has seen some immense bullishness throughout the past couple of days, with the benchmark cryptocurrency incurring a notable uptrend that allowed it to climb from lows of $7,700 to highs of $9,500.
This upwards momentum has marked a significant extension of that which was first incurred when BTC dipped to lows of $3,800 in mid-March, and the crypto has now erased virtually all of the losses that were incurred during this meltdown.
Analysts are now growing increasingly bullish on the cryptocurrency, explaining that its extreme strength in the face of a backdrop of global bearishness is allowing it to quickly becomes a higher version of gold.
There are, however, a few key hurdles Bitcoin must first jump over in order for this possibility to be validated.
Bitcoin’s Uptrend Highly Bullish Despite Retrace from Daily Highs; Claims Analyst
At the time of writing, Bitcoin is trading up just under 6% at its current price of $8,900, marking a massive climb from recent lows of $7,700 and only a slight retrace from daily highs of $9,500.
These highs were set last night when bulls overextended themselves, propelling the crypto before quickly losing their momentum.
Bitcoin’s ability to hold strong within the upper-$8,000 region does appear to be an overtly bullish sign, as it indicates that bulls have begun establishing some notable support within this area.
One analyst on Twitter explained why the benchmark crypto is still highly bullish even in the face of this morning’s retrace, pointing to its low open interest and only minor uptick in funding rates to justify this notion.
“Despite the morning crash, the BTC move was very bullish. Funding barely increased, aggregated OI didn’t increase by much, and Bitmex OI decreased. That speaks of the move driven by spot buyers rather than excessive leverage. The 50% retracement was welcome after +20% in 24H,” he explained.
BTC’s Strong Performance Against Global Markets Bolsters “Gold 2.0” Narrative
The “digital gold” narrative that many investors had subscribed to throughout the past few years is finally showing some signs of being validated, as Bitcoin is now trading up significantly against virtually all major assets.
Another respected analyst mused this narrative’s validation in a recent tweet, explaining that all BTC needs to do now is capture more market-share, and then it will be well on its way to becoming a “higher beta gold 2.0.”
“Even with this recent correlation, Bitcoin is still making quite a case for itself as a higher beta gold 2.0. All it needs to do is capture a bit more market-share. I think over the next 10 year period it is one of the best performing assets,” he explained.
Image Courtesy of Skew
If this trend of outperformance in spite of the global turbulence persists, BTC could quickly validate that it is largely decoupled from the traditional markets.
Featured image from Unplash.
Blockchain scalability solution Matic launched a privacy-focused coronavirus tracking mobile application.
Blockchain scalability solution, Matic, launched a privacy-focused coronavirus tracking mobile application.
According to an April 29 announcement, the new app — dubbed Tracy — leverages the Matic network for contact tracing and quarantine management. The solution also uses decentralized data storage solution, MóiBit, to store sensitive data.
Per the announcement, Tracy is the first blockchain-based solution that was developed for quarantine management and contact tracing. The application is meant to let users understand how likely they are to have come in contact with somebody who tested positive for the coronavirus.
Matic is a second-layer scalability solution that uses side chains to move computation off-chain. The solution leverages the Plasma network alongside a network of proof-of-stake validators for asset safety.
Matic did not answer Cointelegraph’s inquiry by press time.
Blockchain’s relationship with the coronavirus
As the world struggles with the ongoing pandemic, the cryptocurrency and blockchain industry attempted to help address the issues and — in some cases — capitalize on the crisis. For instance, as Cointelegraph reported earlier today, Block.one — the firm behind the EOSIO software — recently invested $50,000 into a blockchain-based coronavirus tracking application.
The Waves-based decentralized exchange, Waves.Exchange, recently launched a prediction market allowing users to bet on whether the spread of the coronavirus pandemic has passed its peak.
A subsidiary of Satoshi Labs, Trezor manufactures hardware wallets where users’ private keys are stored in the device. Satoshi Labs was founded by Pavol Rusnak and Marek Palatinus, and produced the first Trezor prototype in 2012. They launched Satoshi Labs in 2013 and also began fundraising. Trezor offers two products, the Model T and Trezor […]
Genesis Global Trading has reported a 100% jump in new loan originations in the first quarter. The cryptocurrency lender and trading platform added a record $2 billion in new loans in the three months leading to March 2020, up from $1 billion from the previous quarter. BTC accounted for 44.8% of the loans and bitcoin cash (BCH) 5.8%.
In a recent update, Genesis said new loan issuances soared 354% from a year ago. Active loans outstanding briefly touched $1 billion around the middle of February, before falling to $649 million at the end of the quarter.
Quarter-on-quarter, active loans rose 19% from $545 million previously, it said. That’s despite a 50% intra-day drawdown in the price of BTC in mid-March. Altogether, the lender has originated $6.2 billion in loans and borrows since it started operations in 2018.
Genesis provides loans to corporate borrowers such as hedge funds and trading firms in the form of cryptocurrency or cash. Most of the funds that the lender provides as loans are borrowed from elsewhere at lower rates of interest, before charging higher rates when it lends.
Nine months ago, BTC-denominated loans dominated the company’s loan portfolio. But that has gradually declined to 44.8% in the review quarter, as more borrowers take up cash. Loans issued in BCH have risen from just 0.5% in June last year to 5.8%. Ethereum-based loans account for 5.6% of the issuances while ETC, XRP, and the LTC share is just under 5%.
Genesis Chief executive officer, Michael Moro, said the performance was encouraging against a backdrop of global economic uncertainty brought on by Covid-19.
“Despite being in the epicenter of the global pandemic and experiencing first-hand the volatility and unpredictability of the market, we have never felt better about our business … experiencing no defaults, capital losses or delinquencies at any point over the period,” he said.
What do you think about the cryptocurrency lending business at a time of massive stimulus? Let us know in the comments section below.
Sygnum Bank will allow its users to invest in Ripple’s XRP token via their e-banking portal.
Sygnum Bank, the first crypto bank licensed by FINMA, announced on April 30 that Ripple’s XRP tokens are now available through its banking services platform. Users can access deposit, exchange, and credit services using the popular digital currency.
Based in Switzerland, the bank will now allow the third most capitalized digital token behind Bitcoin (BTC) and Ethereum (ETH) to be used by clients seeking to diversify their direct investments in digital tokens, in conjunction with other asset management products offered.
Sygnum customers can use deposits in traditional currencies, such as the Swiss franc, the Euro, the Singapore dollar, and the US Dollar, to buy, hold and trade XRP tokens backed by the Ripple protocol.
Increasing liquidity in the banking portfolio
Additionally, customers can transfer XRP tokens to their Sygnum deposit account or increase their liquidity in traditional fiat currencies with a Lombard loan granted against XRP.
Mathias Imbach, co-founder of Sygnum, praised the announcement and commented as follows:
“We were impressed with Ripple’s excellent performance globally - they now have more than 300 financial institutions in their global payments network, RippleNet. The XRP-based solutions developed by the company resolve weak spots in the growing global remittance market of $ 700 billion. The low cost of transfers makes it an ideal tool to facilitate payments in emerging economies.”
The bank also highlighted that the Ripple protocol provides instant cross-border transfers at a low cost, rather than the traditional way of sending money abroad.
Sygnum’s customer assets are held in separate, highly secure individual portfolios. They are available in one click from each customer’s e-banking platform, and accessible anywhere in the world.
Interest in banks towards Ripple’s protocol
It is not the first time that a bank incorporates Ripple’s protocol in its operations. Cointelegraph reported on April 10 that Azimo, a digital money service, partnered with Siam Commercial Bank in Thailand to launch an instant cross-border payment service through RippleNet.
MoneyGram said in February that it received funds from the blockchain-based payments firm, Ripple Labs, to continue scaling the use of blockchain capabilities in its services.
CoinCorner reports that Google Ads is running a phishing ad despite the firm being unable to use its service.
While Google’s subsidiary, YouTube, is facing a lawsuit for promoting cryptocurrency scams, Google’s advertising platform continues to display fraudulent crypto ads through its advertising network.
According to a report by Bitcoin (BTC) crypto exchange, CoinCorner, Google Ads was running an ad for CoinCorner’s phishing clone website, CoinCornerr.com. The issue was reported by CoinCorner’s marketing manager, Molly Spiers, on April 30.
Google Ads promotes a crypto scam but doesn’t want to promote a real firm
Spiers told Cointelegraph that CoinCorner’s team first noticed the fraudulent ad on Thursday morning after searching for “CoinCorner” on Google.com and Google.co.uk. According to the executive, the phishing ad was promoted by Google. CoinCorner has struggled to place ads on Google Ads for years.
The Isle of Man-based crypto exchange has been restricted from advertising on Google Ads since Google put a blanket ban on crypto ads back in 2018, Spiers said. Although Google subsequently announced a partial reverse of the ban, CoinCorner is still among the crypto firms that are not allowed to use Google Ads. Prior to 2018, CoinCorner was a loyal user of Google Ads.
“We have previously had full access to the GoogleAds platform - we were loyal customers for 4 years, from when we launched CoinCorner in June 2014 to when Google updated their Financial Services policy in June 2018 [...] We have contacted Google a number of times to ask for updates on the UK, but to date, GoogleAds is still not available to us.”
The fraudulent CoinCornerr.com website is currently unavailable. Its Google Ad has purportedly been taken down at the time of publication. According to domain registration data, the fraudulent domain was created on April 29.
Does Google actually allow crypto ads?
According to Google’s advertising policies, the platform does allow some crypto ads. Specifically, Google Ads service accepts ads for crypto hardware products and crypto exchanges.
However, crypto exchanges are subject to specific requirements and purportedly only allowed to be promoted in the United States and Japan to date. Cointelegraph tried to reach out to Google for comment and will update if we hear back.
Google’s crypto exchange ad policies. Source: Google
According to Spiers, the fraudulent website successfully bypassed Google Ads’ restrictions by not mentioning Bitcoin or cryptocurrency in their advert at all. The executive elaborated that any adverts that contain crypto-related keywords, like Bitcoin or crypto, are automatically disapproved. “They’ve used the same text as us but removed any mention of Bitcoin, which, at a quick glance, could easily be mistaken for our site,” Spiers explained.
Crypto scam issues intensify on Google and YouTube
CoinCorner’s case is not the first time users have caught Google advertising a crypto scam. In March 2020, Google Ads was promoting a fake Ledger Wallet extension designed to steal crypto from users. To Google’s credit, we reported in mid-April that the company removed 49 Google Chrome web browser extensions after receiving reports of phishing activity.
Cypherium blockchain joins Microsoft for Startups program looks to explore new use cases with BaaS giant.
Cypherium blockchain joins the Microsoft for Startups program with the goal of becoming a part of the company’s blockchain-as-a-service, or BaaS, offering in the coming months.
Cypherium blockchain uses a combination of proof-of-work, or PoW, and HotStuff consensus algorithms. The latter is also used by Facebook’s Libra project.
In a Cointelegraph interview, Cypherium CEO, Sky Guo, said that with the recent changes made to the Libra whitepaper, his project is seemingly the only permissionless platform to use HotStuff:
“Also Libra originally planned to become permissionless in the next five to three years. But recently in their new whitepaper, they abandoned that. So now, Cypherium looks to be the only permissionless HotStuff based blockchain.”
Discussing the benefits of the Microsoft for Startups program, Guo noted the importance of its network:
“They organize meetings and conferences with venture capital firms and also enterprise clients. And also they connect us with the Microsoft executives, so last time we had an online conference with the Microsoft’s CTO.”
The corporate BaaS space is getting crowded as all the tech heavyweights like Amazon, IBM, and Oracle have numerous offerings. Yet, Sky believes that Cypherium’s unique features make it an attractive addition to the Microsoft’s BaaS:
“Cypherium is the next generation Byzantine fault tolerant algorithm [BFT], and it features instant finality. What's unique is that it offers linear complexity, that means no matter how many nodes in the network, it will run at the top speed. While the classic BFT algorithms can only scale to about 20 nodes and with more nodes, it will crash because the communication is too complex.”
According to Guo, his company has been in discussion with various national governments about the possibility of using the Cypherium blockchain. He looks forward to exploring new use cases with Microsoft.
Recently, Microsoft reported that quarantined gamers were straining its Azure cloud service, which serves as a backbone to its BaaS. Hopefully, Microsoft has been able to address these issues.
Ripple publishes the quarterly XRP Markets Report to voluntarily provide transparency and regular updates on the company’s views on the state of the XRP market, including quarterly programmatic and institutional sales updates, relevant XRP-related announcements such as Xpring and RippleNet partnerships and commentary on previous quarter market developments. As an XRP holder, Ripple believes proactive communication is part of being a responsible stakeholder. Moreover, Ripple urges others in the industry to follow its lead to build trust, foster open communication and raise the bar industry-wide.
Market Snapshot: Crypto as a Safe Haven Asset Class
Since the advent of bitcoin, digital assets are often referred to as safe haven assets, or assets that market participants can turn to during turmoil in the financial markets, due to their presumed lack of correlation to traditional markets. Born out of the 2008 financial crisis, digital assets put the safe haven label to the test. That was all about to change on March 12, 2020, or what some describe as “Black Thursday.”
In the days preceding Black Thursday, digital assets began the week holding firmly along with gold and trading as a safe haven asset, while equity markets were seeing the beginning of COVID panic. However, as the S&P dipped below 3,000 on Black Thursday, unprecedented volatility spread through digital asset markets. Bitcoin (BTC) saw its largest one day move ever, losing over 50% of its market value in a matter of hours—a decline accelerated by billions of USD worth of liquidations on leveraged derivative venues and lending platforms.
As digital asset holders rushed to transfer digital assets to either meet margin calls, sell out of their positions, or take advantage of price dislocations, the BTC and Ethereum (ETH) networks became overwhelmed and suffered performance issues. According to Coin Metrics, “median transaction fees measured in dollars for both Bitcoin and Ethereum shot up almost five-fold.” While the entire crypto market, including XRP, experienced volatility, the performance of the XRL Ledger (XRPL), such as transaction pricing and speed, remained stable making XRP the preferred digital asset for funds transfer.
Fast forward five weeks, and as of April 17, 2020, the S&P 500 is down 11% on the year, WTI Crude is down almost 70% YTD, Gold is up 10%, and total crypto market capitalization is up 7.3%. Given the recession and continued uncertainty about the extent of the long-term economic impact this global crisis will impose, we expect continued market volatility and a sustained test for crypto as to whether it performs as a ‘safe haven’ asset class.
Disciplined, Responsible Stakeholders: Continued Pause in XRP Programmatic Sales
As readers may recall, in Q2 2019, Ripple shifted to a more conservative volume benchmark for XRP sales, away from CoinMarketCap and to CryptoCompare Top Tier (CCTT) and significantly reduced XRP sales. In Q3 2019 and Q4 2019, Ripple further reduced XRP sales and paused programmatic sales. Ripple maintained this approach throughout the entirety of Q1 2020.
In Q1 2020, total XRP sales were $1.75 million (USD) vs. $13.08 million the previous quarter. In addition, Ripple continued the pause of programmatic sales, focusing solely on its over-the-counter (OTC) sales to build XRP utility and liquidity in strategic regions including EMEA and Asia. Total sales (OTC-only, given programmatic pause) ended the quarter at 0.6 bps of CCTT. This is compared to total sales in the previous quarter (OTC + programmatic) of 8bps of CCTT, representing a 99.3% drop QoQ.
Sales Summary (dollars in millions)
Institutional direct sales (OTC)
Global XRP volume
ADV XRP (dollars in millions)
Total XRP volume (dollars in billions)
Total sales as % of total volume
* Percentage is calculated by dividing actual Ripple dollar proceeds by total reported XRP volume in dollars.
Note: In Q4, effective Q1 2020, CCTT changed the methodology it uses to determine which exchanges it lists in the TopTier, which is reflected in the numbers above. CryptoCompare did not retroactively update its data for the change. Ripple continues to evaluate its benchmarks given challenges, such as fake volume, that continue to persist in the industry.
CCTT’s reported daily volume for XRP increased in Q1 2020 from Q4 2019. The average daily volume reported at $322.66 million in Q1 versus $187.34 million in Q4, and above Q3’s reported $198.10 average daily volume.
XRP’s volatility of daily returns over Q1 is 6.2%, representing an increase in volatility from Q4’s 3.1%. XRP’s volatility over the quarter was higher than that of BTC (5.8%), and lower than that of ETH (7.3%)
Correlations with XRP
After showing signs of decoupling from large cap digital assets, correlations of XRP with other large capitalization digital assets spiked towards 100% following Black Thursday’s Market Meltdown.
In Q1 2020, three billion XRP were again released out of escrow (one billion each month). In total across the quarter, 2.7 billion XRP were returned and subsequently put into new escrow contracts. Note: All figures are reported based on transactions executed during the quarter.
Monitoring Escrow Activity
Last quarter, Ripple re-shared details on escrow to provide clarity on its mechanics and timeline. To provide further transparency, Ripple created @XRP_EscrowBot. This Twitter bot monitors and posts the monthly escrow movements. Anyone on Twitter can follow this account to track escrow activity.
As a reminder, every month, the escrow mechanism releases a total of one billion XRP to Ripple. The portion of XRP leftover each month is placed into a new escrow to be released in the following months. For more information on Ripple’s escrow, please see here.
On-Demand Liquidity (ODL)
Customers continue to see the value of XRP through significant cost-savings by eliminating the need to pre-fund international accounts. From Q4 2019 to Q1 2020, RippleNet’s On-Demand Liquidity (ODL) service tripled in transaction volume, and the dollar value transacted increased by more than 294%.
Of note, Ripple and Azimo, a UK-based digital money transfer service, announced their partnership to use the digital asset XRP in cross-border payments. Azimo launched its service to send payments to the Philippines and, within a few months, ODL saved the company 30%-50% when arranging currency transfers between customers in the Philippines and those in the UK and Europe.
XRP Integrations and Liquidity Update
As mentioned in a recent Insights blog, liquidity is the key to exchanging any asset. The more liquid an asset is, the more efficiently it can be exchanged. Therefore, it goes without saying that XRP liquidity is the lifeblood of Ripple’s On-Demand Liquidity for cross-border payments.
In addition to being bolstered through new use cases for XRP outside of cross-border payments, liquidity is increased by the variety and diversity of exchange tradable instruments. In the case of XRP, Q1 saw the integration of XRP into a number of additional exchanges and liquidity instruments.
The open-source community of developers continues to build products and support innovation on the XRPL through improvements to the technology. Last quarter, Xpring launched new tools, services and documentation for developers including XRP Ledger Mainnet support in the Xpring SDK and support for Interledger Protocol (ILP) STREAM on Testnet in the xpring.io wallet.
In addition, Xpring partner Anchorage announced support for custody of XRP, enabling its growing roster of enterprise customers to securely store XRP for various use cases. The popular wallet BRD also announced support for XRP.
The Monetary Authority of Singapore granted temporary relief to certain market participants from the newly adopted licensing requirements under the Payment Services Act. The relief will allow firms to operate until July 2020, after which time they must obtain a license.
The Indian Supreme Court overruled a ban on cryptocurrency activities that was imposed by the Reserve Bank of India in April 2018. A few days later, the RBI announced its intent to return to the Supreme Court to challenge this ruling.
The CFTC released interpretive guidance for when “actual delivery” occurs for retail crypto transactions involving leverage or margin. This guidance is another step taken by the CFTC to provide clarity to market participants regarding activity that falls within their jurisdiction.
Amid the pandemic crisis, the U.S. Congress discussed the creation of a “digital dollar” and related accounts as a way to speed stimulus payments to households that need support.
SEC Commissioner Hester Peirce proposed a 3-year safe harbor period for crypto token sales. The safe harbor proposal provides relief for issuers from being considered in offering illegal securities.
Brazilian Central Bank announced an initiative to allow payments between retail customers and businesses to be processed within seconds. This initiative is part of the Central Bank’s overall initiative to improve open banking within Brazil.
SWIFT’s messaging upgrade to ISO standards was delayed by one year, and is now set to finish by 2025.
Worldline purchased Ingenico for $8.6 billion, continuing the consolidation trend of payment players. Ripple expects to see consolidation continue in 2020 as legacy players try to digitize and protect market share against fintechs.
Facebook altered its plans for its Libra whitepaper due to regulatory pressure and political pushback. Unsurprisingly, Facebook’s Libra project shifted focus and will support both existing government-backed currencies and the Libra token.
The number of crypto wallets containing one bitcoin (or more) continued to rise and hit an all-time high on March 11.
Binance, one of the largest cryptocurrency-trading platforms, acquired CoinMarketCap.com for an undisclosed price and, in the face of criticism, affirmed their intent for the site to be a neutral provider of data.
Binance and OKEx overtook BitMEX in the bitcoin futures market this past quarter as volume on crypto exchanges reached a record high in mid-March.
Though YouTube has restored many banned crypto channels, CryptosRus remains sidelined with little information.
While many other accounts have seen reinstatement shortly following their bans in recent days, YouTube has still not brought the CrytptosRus channel back to life. It has now been three weeks since the channel creator's original petition for reinstatement.
"My channel is still banned," CryptosRus host, George, told Cointelegraph in an April 28 email, adding that YouTube has not updated him on the situation. "I appealed the decision three times now," he said.
The latest rally in Bitcoin has caused the Relative Strength Index to reach shocking highs. Such a reading would typically indicate a pullback is due, however, it can also be a signal that the bull market is back in full force.
Comparing the RSI to past Bitcoin bear and bull cycles, provides clues as to what may happen next for Bitcoin price, as the asset inches ever closer to its block reward halving.
Bitcoin Price RSI Reaches Insanely Overbought Conditions Following Latest Rally
After a chaotic collapse in mid-March on a day now known as Black Thursday, Bitcoin plummeted to under $4,000.
The drop caused shock and awe across the crypto space, as the record-breaking collapse wiped out all of 2020’s gains and then some.
Once the low was hit, Bitcoin price has been on a strong and steady rise ever since. The first-ever cryptocurrency is up nearly 150% from the lows, rocketing to over $9,400 in an overnight push last night.
The explosive rally has caused the RSI to reach the highest level since the June 2019 top when Bitcoin reached $14,000.
Such an overbought reading on the technical analysis indicator created by J. Welles Wilder Jr. who also created the Parabolic SAR, and Average Directional Index, would normally suggest a pullback or reversal is due.
But when it comes to Bitcoin, RSI readings that high may be a sign the bull market is back.
Relative Strength Index Remains Overbought in Bull Markets
The Relative Strength Index – or RSI for short – is a momentum indicator that measures the strength of price action, letting analysts understand when assets become highly overbought or oversold.
The indicator provides a visual representation on a line chart that oscillates back and forth. When an asset reaches 70, it is considered overbought, and 30 represents oversold levels.
Traders can adjust this according to risk appetite, but the idea remains the same: any extreme deviations above 70 or below 30 mean a change in direction is likely.
Related Reading | Bitcoin Price Sets Longest Stretch of Positive Weekly Growth Since May 2017
But when it comes to Bitcoin during a bull market, the RSI can reach wild extremes, and the price can keep rising for a lot longer than expected.
In the chart above, each red verticle line represents a large spike in RSI during a bull market. Notice how each peak in RSI rises far above the 70 mark, and oftentimes, the price keeps on rising, even if the RSI is dropping.
RSI peaking ahead of the price of an asset often signals a divergence and is a more accurate sign of a reversal during a bull market than simply reaching overbought conditions.
At the top of the 2017 bull market, RSI peaked ahead of the $20,000 top, and RSI never reached that high again, until the 2019 June top, and again now. Is the bull market truly back for Bitcoin?
Ethereum saw a massive rejection from its overnight highs that led it to reel lower today, erasing part of the gains that were incurred during yesterday’s uptrend
This has caused the crypto to flash signs of technical weakness, especially while looking towards its Bitcoin trading pair
One analyst is also pointing to an extremely bearish XRP fractal pattern that ETH has been closely tracking as a potential reason why lower lows are imminent
Ethereum incurred a massive uptrend yesterday alongside Bitcoin and the aggregated crypto market, climbing from daily lows of under $200 to highs of $230 overnight.
This uptrend allowed it to erase a good bulk of its recent losses and has put it back into firm bull territory.
Despite this, the cryptocurrency’s technical situation is showing signs of growing incredibly weak, and some analysts are now looking towards a fractal pattern seen between ETH and XRP for insight into where the second largest crypto may trend next.
Ethereum Reels from Overnight Highs as Technical Situation Degrades
At the time of writing, Ethereum is trading up just over 2% at its current price of $212.60, marking a notable decline from daily highs of nearly $230 that were set late last night.
This upside movement came about in tandem with that seen by Bitcoin, with the benchmark cryptocurrency pushing as high as $9,500 overnight before losing its momentum and declining back into the upper-$8,000 region.
ETH is significantly underperforming BTC at the moment, trading down over 5% against its Bitcoin trading pair due to the heavy retrace seen in the time following yesterday’s downside movement.
It now appears that bears could be well positioned to push Ethereum even lower in the days and weeks ahead, as the crypto lost a key technical level that now opens the gates for a downside movement to its first key support.
One popular pseudonymous trader on Twitter spoke about the loss of this level in a recent tweet, offering a chart showing that ETH may retrace to 0.0235 BTC – down from its current price of 0.0241 BTC. If this near-term support is lost, it may continue declining to 0.021 BTC.
“ETH bulls don’t want to lose this level,” he warned.
Image Courtesy of Teddy
This Fractal Spells Trouble for ETH
Fractal patterns can be hit or miss – with some offering incredible insights into an asset’s future trend, while others are quickly invalidated.
There is one interesting Ethereum fractal, however, that has shown a striking similarity to previous price action seen by XRP.
Another pseudonymous trader offered this pattern in a tweet, explaining that it could signal that new lows within the sub-$100 region are imminent for ETH.
“Euphoric day for the bulls, but keep in mind, just because we’ve nearly fully retraced the dump, doesn’t mean the bottom is in and we’re headed for all-time highs. Fractal featuring XRP and ETH,” he said while pointing to the fractal seen below.
Image Courtesy of Calmly
Featured image from Unplash.
Cointelegraph joined the Webit Virtual fireside chat with Roger Ver, who believes that cryptocurrency, but not Bitcoin, is the way forward in a post-Coronavirus world.
On April 29, Cointelegraph participated in a fireside chat event organized by the Webit Foundation. The panel, with the title of “Can blockchain be a solution for the upcoming economic crisis,” featured Roger Ver from Bitcoin.com as the main speaker.
Like all events during the Coronavirus pandemic, the panel was held virtually, with its participants dialing in via video conference. The talk was hosted by Dr. Plamen Russev, executive chairman of Webit Foundation. The chat featured Roger Ver, Bitcoin.com’s executive chairman, and Kristina Lucrezia Cornèr, managing editor at Cointelegraph, as a Q&A moderator.
Ver’s answers at the panel can be summarized as a deep belief in freedom and libertarian economics. He believes these ideals to be the answers to the crisis at hand. He also focused on censorship — an issue that has regained relevance amid the Coronavirus pandemic.
Debunk, don’t censor
Ver was greatly disturbed by the harsh censorship policy enacted by Youtube in response to the COVID-19 pandemic. He cited an example of two doctors who made statements going against the mainstream narrative behind the pandemic, and whose video was deleted a few days after it was published.
The policy is allegedly the culprit behind a new wave of bans to crypto content creators, which recently hit high-profile influencers like Tone Vays and Crypto Lark.
Ver explained his view against censorship:
“I think the solution to people saying crazy or wrong things is other people being able to rebut those things, not massive censorship.”
When discussing censorship, Ver also threw several jabs against the Bitcoin community, and said that his biggest regret throughout the years was “not being even louder when speaking out against censorship in the cryptocurrency community.”
This refers to 2015, when the moderators of the /r/Bitcoin Reddit forum began censoring any discussion relating to Bitcoin XT — a proposal for larger blocks in Bitcoin (BTC) that can be considered as the ideological ancestor to Bitcoin Cash (BCH).
Bitcoin is not useful for the future world
Ver holds a utilitarian view of the purpose of cryptocurrency, focusing heavily on its use as a censorship-resistant payment system. He emphasized that it is free trade that creates wealth in the world, while the lockdowns destroy the ability to trade freely and thus, the economy. He also considers the multi-trillion dollar stimulus package to be theft of a similar nature to counterfeiting money.
Cryptocurrency, as the freest form of money, would be the best tool to escape the government’s excessive control, according to Ver. But he also believes that it can only happen when cryptocurrency is used for payments, which is something that Bitcoin is no longer useful for, he claimed:
“The sad part about what everybody is calling Bitcoin today, it doesn’t have those characteristics that made the early investors and adopters so excited about it early on. Most of those people are now working on things like Bitcoin Cash or Ethereum.”
He claimed that most of its current supporters are either speculators betting on future speculation, or people who “still didn’t figure out that the project is no longer trying to be cash for the world.”
Ten days were not enough for blockchain developers to win a new Bitcoin (BTC) contest, launched by Paul Sztorc, an independent BTC researcher, and tap into a BTC 6.1 (USD 53,600) prize fund. However, contestants still have at least 12 days to go.
The contest started last week and includes potential total rewards of up to BTC 6.1 for developers who are able to successfully
During the discussion, CZ addressed concerns from the crypto community regarding the size and influence of Binance amid the firm’s increasing acquisitions and horizontal expansions.
CZ: ‘the free market works’
On the topic of Binance’s increasing presence within the crypto ecosystem, CZ stated: “I think basically there's two sides to it.”
“So there’s the worry about are we too big or not, and then there is why are users choosing us? If we abuse the power that we have, and then abuse our influence, then people would not choose us.”
“So we are quite big, but the reason we're growing is not because we are abusing a monopolistic power,” he stated, adding: “There’s like thousands of other exchanges, the competition is very fierce.”
“People naturally have those kinds of worries. But rest assured, we want to continue to provide value to his users, not destroy value. And the free market works — if we abuse it, people will leave.”
Binance is ‘tiny’ compared to tech giants
CZ also asserted that “Binance is still very small, stating: “in terms of market cap compared to any traditional organization, we are tiny.” He continued:
“Even in terms of the number of users where we're tiny as well — all of the crypto users combined is like one one-thousandth of traditional populations, and there are much larger organizations which take one-third of the population, like Facebook.”
“In a free market, [...] people will naturally gravitate toward the guys who are providing better products, better services,” he concluded.
‘Sometimes you get lucky’
During CZ’s fireside chat with the hosts of Virtual Blockchain Week, CZ stated that he never expected to ascend to comprise the top-ranked crypto exchange so quickly — with Binance having risen to become the largest exchange by trade volume within six months of its launch in 2017.
CZ stated that when the platform launched, there were “only two crypto-to-crypto exchanges that were big at the time — they were only English, and only on the web.” With no mobile apps and no major exchanges targeting users outside of the West, CZ stated that he “thought there was definitely room for another exchange.”
“At the time, our goal was ‘let’s try to reach number one in three years’ [...] But y’know, sometimes you get lucky.”
Neither the crypto bear market of 2018 nor the current mainstream financial crisis have stopped crypto exchange Binance from expanding.
Over the past three years, Binance has expanded its operation, even through a major crypto bear market. This trend has continued into the current coronavirus-induced mainstream financial crisis.
"We always continue to expand even during the bear market in 2018, which is when we launched our community blockchain initiative, Binance Chain," Binance co-founder Yi He told Cointelegraph. "Also, we began exploring partners around the world for local fiat-to-crypto access, licensing our technology and operating in their respective jurisdictions."
Growing through tough times
Although a difficult time for crypto space participants, the 2018 crypto bear market was not nearly as widespread as the current economic difficulties. Coronavirus prevention measures and fears have caused significant mainstream market downturns, business difficulties, and lay offs.
Binance, however, still shows growth. Yi mentioned the "Open Platform" Binance started in 2020, also noting the company's desire to lend its liquidity and systems via Binance's cloud and broker program.
"During the bearish markets this year, we continued to develop and expand," He said, pointing toward the outfit's acquisition of CoinMarketCap, as well as Binance's work with African payment platform Bundle.
"For people who believe in blockchain, there is no difference between bulls and bears," He said, adding:
"We have been steadily recruiting excellent talent and developing new businesses, undeniably. We believe that in this current moment, it is easier to find outstanding talent and investment/M&A opportunities."
Bitcoin’s intense volatility seen yesterday didn’t let up overnight, as the benchmark cryptocurrency pushed as high as $9,500 before facing a swift rejection
The crypto has been able to stabilize within the upper-$8,000 region in the time since
Analysts are now noting that this strong upwards momentum could lead BTC as high as $10,000, although it may face a brutal rejection at this level that leads it significantly lower
Bitcoin and the aggregated cryptocurrency market incurred an intense uptrend yesterday that allowed the benchmark crypto to rally from lows of $7,700 up to highs of $9,500 all in the span of a short 24-hour period.
This overtly bullish price action fundamentally altered BTC’s market structure, leading many analysts to grow increasingly bullish.
In the short-term, this bullishness may be enough to push the crypto significantly higher – even potentially sparking a movement to $10,000 – although analysts do not believe that this level will be easily surmounted.
Bitcoin Forms Bullish Undercurrent as Analysts Watch for Further Upside
At the time of writing, Bitcoin is trading up over 7% at its current price of $8,800 – marking a notable climb from recent lows of $7,700.
This also marks a slight decline from highs of $9,500 that were set overnight when the crypto’s momentum reached a boiling point.
It is important to note that this overnight extension of the crypto’s momentum was short-lived, and ultimately resulted in Bitcoin declining back down to the upper-$8,000 region – where it has apparently been able to establish some support.
One popular pseudonymous options trader shared his thoughts on Bitcoin, explaining that high liquidity and fresh demand could be two factors that help push BTC well into the $9,000 region, and possibly even as high as $10,600.
“BTC long update: Tightened up stop, maximum loss 0.3R. Reasoning for this trade: Liquidity + fresh demand, a previous monthly open, and 0.5 retracement. All this taking place in a strong uptrend. My targets are 92xx, 94xx, and a moonbag for 10.6K,” he explained.
Image Courtesy of Chase_NL
BTC Could See Dire Rejection at $10,000
Even if Bitcoin’s rally does extend significantly further and pushes the crypto up towards $10,000, the intense resistance at this psychologically important level could be enough to spark a dire selloff.
Another popular cryptocurrency analyst on Twitter mused this possibility, offering a chart showing BTC making a bid at this level before retracing back into the mid-$8,000 region.
Image Courtesy of Mac
If this possibility does unfold, yet another rejection at the five-figure price region would be grave, as BTC has historically struggled to stabilize within the region.
The short-lived pump in late-2019 led the crypto as high as $10,500 before it began retracing, ultimately dropping as low as $3,800 in mid-March.
Unless bulls garner sustainable buying pressure, similar price action could soon unfold.
Featured image from Unplash.
CoinMarketCap’s traffic decrease from China coincided with similar action on leading Chinese cryptocurrency exchanges.
CoinMarketCap, which recently became a Binance company, released a report on Q1 crypto market performance, as seen from its perspective. One of the more interesting details is the significant decrease in users from China.
As revealed by the report, published on April 30, China fell from 13th to 24th position in the country rankings by page views. A less dramatic but sizable decrease was also seen from South Korean users, who fell by 3 positions to the 19th place.
Furthermore, CoinMarketCap noted that the decrease largely occurred in the period between Jan 14 and 25, after which its ranking remained stagnant.
The report connects this to the Coronavirus pandemic and resulting country-wide lockdowns, with the events largely unfolding in that period, culminating in the Jan. 23 lockdown of Hubei, the epicenter of the disease.
The report speculated that part of the reasons may be due to increased censorship from the Great Firewall.
Were Chinese traders less active?
The explanation behind this decrease is not immediately apparent, as forcing people to stay at home would naturally result in increased usage of the internet. However, the effect of economic uncertainty from the lockdowns would act in the opposite direction, discouraging traders from participating in high-risk activities.
Amey Wang, chief editor at Cointelegraph China, believes that Coinmarketcap’s hypotheses are valid. “Because of the coronavirus, the firewall is more serious than before,” she said. Many VPN services suffered outages in China as the country’s officials sought to restrict outside access.
But she also said to have observed people having “more time to speculate in the cryptocurrency market because of the coronavirus.”
It is difficult to access statistics about trading volume in China, due to the fact that cryptocurrencies are officially banned. Exchanges like Huobi and OKEx, while incorporated outside of China, are nevertheless mostly used by Chinese traders.
According to data from Similarweb, both Huobi and OKEx saw decreases in their share of Chinese users from February to March. Data for January is not available, but their overall traffic figures were in fact growing throughout January and February.
Similarweb data from Gate.io, which also sees a lot of traffic from China, shows a similar decrease in traffic share from February. A deep trough in traffic from December to January could support CoinMarketCap findings, but this dip is also partially seen in Western-centric exchanges like Coinbase.
It appears reasonable that crypto trading activity slowed down in China during the lockdown, but CoinMarketCap’s figures could also have a different explanation.
CoinMarketCap saw significant growth in the number of female users, averaging +48% since Q4 2019. In terms of age, two polar opposite categories saw the most growth: the 18-24 bracket and 65+ group, with +46% and +41% growth, respectively.
The report also analyzed the price performance of crypto assets, which had a highly volatile period. It noted that some assets managed to post positive growth over the entire period, despite the March 12 crash.
The company also noted that the pandemic put Bitcoin’s safe haven asset theory to the test, concluding that “it is still too early to foretell the role and fate of crypto.”
Two separate charts taking a top-down view across the wider crypto market may provide clues as to where the altcoin asset class is headed.
Each chart shows that altcoins are at potentially their most critical moment yet, and are facing the most important weekly close yet at the end of this week.
Altcoins Start 2020 Strong, But Black Thursday Crypto Collapse Backtracked Breakout
As 2020 first got underway, altcoins broke out from two-year downtrend lines and carried on into the stratosphere with powerful recovery rallies.
The likes of Ethereum, Tezos, and Chainlink greatly outperformed Bitcoin, but eventually, all assets were caught up in the Black Thursday destruction that occurred in mid-March, wiping out all of the early 2020 gains and sending these assets tumbling back to extreme lows.
Related Reading | Buy Signal on Litecoin Paves Way For Astronomical Crypto Altseason
While many individual assets had broken out of long-term trendlines, the overall altcoin market cap paired with USD was showing that the downtrend line was still intact, and could be partly responsible for cryptocurrency falling back to lows.
However, during the collapse, the breakout of the altcoin/BTC chart, depicting Bitcoin‘s dominance over the altcoin market, has held.
Coinciding with another potential, and this time sustainable breakout of the altcoin market cap, a downtrend line on Bitcoin dominance is also holding as support, potentially signaling that this weekly close could be the most critical for altcoins ever.
In the chart above, the downtrend line has been pierced by the most recent price action. The push higher from altcoins was driven largely in part by a massive XRP pump this week, along with another Ethereum rally.
The same downtrend line on the total crypto market cap minus Bitcoin, showing just altcoin market cap only, clearly rejected buyers in early 2020, but the recent price action has resulted in another attempt, that thus far is holding.
In the chart below, which represents the altcoin market cap trading against BTC, also known as BTC dominance, the downtrend line was already broke through and is being retested currently on weekly timeframes.
The line holding for alts could mean that an alt season is just around the corner, and these alternative crypto assets could soon outperform Bitcoin.
But with Bitcoin’s halving, many analysts think that altcoins could get crushed by the volatility in Bitcoin, which would suggest this line does not hold and a fall deeper for alts against BTC is likely.
Related Reading | Altcoins Could Get Crushed By BTC Halving Volatility, Here’s Why
However, if the BTC dominance downtrend line holds, altcoins would have no further diagonal resistance to contend with, and would have a lot larger of a chance of reclaiming higher horizontal support levels, and pushing much higher.
But it all depends on this weekly close, which is critical for both Bitcoin and alts.