The cryptocurrency market is in a nascent stage of growth. Thus, even rumors and developments which are fundamentally unrelated to cryptocurrencies have a huge impact on the prices. How most crypto specialists expect the industry to get matured this year. Notably, Facebook creator Mark Zuckerberg has announced that his company will study cryptocurrencies and try to integrate with the social media platform.
The developments related to Bitcoin indicate the industry may be soon considered on par with equity markets.
Bitcoin
The implementation of SegWit (Segregated Witness) in August has started making a positive impact on the transaction confirmation fees paid to miners. Due to the scalability issue, Bitcoin transaction confirmation increased from approximately 30 minutes to several hours. For quick confirmations, traders have to pay a higher fee.
Last month, the transaction fee increased to as much as 1,000 Satoshis per byte. Now, several Bitcoin users have started using SegWit addresses, which allow faster and cheaper (up to 6x) transactions. As of date, only 10% of transactions are from SegWit addresses, which usually begins with 3. The transaction fees for Bitcoin transmitted from non-SegWit addresses have already fallen to about 500 Satoshis per byte.
In other news, the New York Stock Exchange has sought approval from regulators for launching Bitcoin Futures ETFs (Exchange Traded Funds). That indicates the interest shown by Wall Street in Bitcoin. Read more here.
Ripple
After rallying to a high of about $3.80 last week, the blockchain platform used by banks for global fund transfer is seeing a huge sell-off. The market capitalization of Ripple has fallen from over $100 billion to about $80 billion. In doing so, it has lost second place to Ethereum. The decline is attributed to government actions taken on cryptocurrency exchanges in South Korea, which usually contributes to the majority of the trading volume.
The market is also seeing profit booking from heavy hitters who had entered at extremely low levels. A year back the coin was trading at less than a cent in the crypto market.
Ethereum
It is one of the well-known cryptocurrencies, which was not affected by the sell-off that happened a day before in the crypto market. Ether briefly fell below the psychological level of $1,000, but quickly bounced back. At the time of writing this, Ether is trading near the crucial Fibonacci resistance level of 1280. Correspondingly, the market cap has almost doubled in the past two weeks to $137 billion.
The introduction of the Casper PoS testnet facility on December 31 is one of the main reasons for Ether to remain resilient to shocks in the crypto market. Further, Ethereum is becoming the preferred choice of DApps (Decentralised Application) developers.
Dogecoin
Dogecoin was created as a joke by forking the Litecoin network. It was intended to serve as a tipping coin. When social media platform users come across any valuable information, Dogecoin was gifted as a token of appreciation. The coin hit a high of $0.0179 to record a market capitalization of over $2 billion this week. Read more here.
Tether
It is a controversial project offering a dollar and Euro pegged token. One USDT will always be equal to one US dollar. Similarly, one EURT will always be equal to one Euro. The coin is now accepted by several exchanges. It is used to circumvent the laws related to the US dollar. A security breach that happened in November resulted in a loss of $30 million worth of tether. However, Omni Protocol, the platform on which tether was deployed, quickly updated the system and froze the coins. Earlier this week tether has announced a transition to the Ethereum network, citing lower fees and faster confirmations.
Our Forex Trading Plan
Ethereum Classic. The original token of the Ethereum chain is trading at about $36. We anticipate a big rally to begin in the coin due to two reasons. Firstly, the rise of Ethereum will certainly influence Ethereum Classic as both share several similar features. Secondly, Ethereum Classic developers have announced that the Emerald Project, which is expected to resolve the issue of transaction verification in a trustless way, is near fruition. Thus, we expect a rally in the ETCUSD pair.
Technically, the ETCUSD pair is trading above the 50-day moving average. Further, the positive reading of the moving average of the oscillator also confirms bullishness in the cryptocurrency pair. Thus, we anticipate a rally to begin soon, and to gain from the uptrend, we wish to go long in the ETCUSD near 34, with a stop-loss order below 30. A profit booking order will be placed near 42.
Our Binary Options Trading Plan
Bitcoin. Although it remains range-bound between 12,000 and 17,000, Bitcoin is now descending after touching the 17,000 level on Sunday. The stochastic oscillator is also descending towards the bearish zone. Thus, we expect the BTCUSD pair, which is currently trading at about 14,400, to decline further.
To profit from the probable downtrend, we are planning to invest in a put option valid for one week. The option will be bought from a reliable binary broker when the BTCUSD pair trades near 15,000 in the major cryptocurrency exchanges.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
