The cryptomarket turned green on Monday after news emerged that Bank of England Governor Mark Carney, chair of the Financial Stability Board, stated that cryptocurrencies do not pose risks to global financial stability at this point in time. The market was also buoyed by the news that demand for hardware wallets, which are used for cold storage of Bitcoins and other cryptocurrencies, has increased in South Korea as awareness spreads among users.
The cryptocurrency market continues to face the daunting task of fighting unwanted regulation on one side and hackers on the other side. While regulators and the crypto community may arrive at an understanding in the future, the issue of hackers needs to be sorted out at the earliest as it hinders the growth of the sector as a whole. One of the best ways to prevent hacking is through the use of hardware wallets, instead of depending on online wallets and cryptocurrency exchanges for storage. Chartists believe the recovery seen for the past two days will not last long and further decline is possible. Read more here.
Bitcoin (BTC): Fundstrat Global Advisors’ head of research Tom Lee has predicted Bitcoin to reach $91,000 by March 2020. The prediction includes stunning images, statistics, and data on Bitcoin in a detailed manner. Furthermore, the report also enables visualization of short-term and long-term trends. This includes mining costs and trends based on multiple time frames.
To take advantage of the possible rise in the value of Bitcoin, Bladetec, a British IT hardware supplier is planning to build the largest Bitcoin farm in the UK. The £10 million Bitcoin farm will be set up in the South East of the UK. The founder John Kingdon has joined hands with Envestry, an FCA (Financial Conduct Authority) regulated firm. Read more here and here.
Ethereum (ETH): Ethereum dipped below $500 on Sunday, before bouncing back above the crucial psychological level. Analysts have provided three major reasons for the weakness in Ethereum. Firstly, the issue of subpoenas by the US SEC has resulted in a decline in the ICOs (Initial Coin Offerings). Ethereum is the major smart contract platform used by most of the developers. Therefore, the demand for the platform has declined, leading to a decrease in the price of Ether.
Secondly, Eos (EOS), a smart contract platform that currently runs on the Ethereum mainnet, is going to move to its own mainnet. Eos offers solutions to problems such as scalability, which is currently faced by the Ethereum network. Eos developers have also moved their holdings of 400,000 ETH tokens to cryptocurrency exchanges. Cryptocurrency traders widely believe that they will dump it before moving to their own mainnet. That will further tank the price of Ethereum. Finally, several projects have migrated from Ethereum to other networks such as NEM (XEM) and Neo (NEO) in the recent past. All these factors have made Ethereum weak. Read more here.
Our Forex Trading Plan
Litecoin. (LTC) is forming a descending triangle pattern, as shown in the image below. The money flow index indicator is also declining. Therefore, a continuation of the current downtrend can be expected.
The downtrend can be traded by going short in the LTCUSD pair near 170, with a stop-loss order above 185. Once the short position is opened, we would place a buy order near 130 to book profit.
Our Binary Options Trading Plan
Bitcoin Cash. This fork of Bitcoin looks extremely weak in the chart. As we had mentioned many times in our previous articles, a steep decline in the transaction costs and faster confirmation times of Bitcoin (BTC) has taken the sheen off Bitcoin Cash. The crypto-token faces huge resistance at 1,170. Furthermore, the momentum indicator is moving downwards, below the reading of 100. On the downside, the next major support exists only at 570. Therefore, we are expecting Bitcoin Cash to remain in a downtrend.
Investing in a put option contract would enable us to profit from the cryptocurrency’s decline. If the put option contract offered by a binary broker is valid for a period of one week, then we may consider purchasing it. Additionally, we prefer Bitcoin Cash to trade at about $1070 in the cryptocurrency market.
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.
