April 2020 will be decisive for cryptos
Julien Moretto – 1 Apr 2020
Volatility has decreased this week in the crypto market. While a bounce was observed on March 30, Bitcoin’s price has been hitting resistance at the €5,900 ($6,500) level at the beginning of April. On April 1st, it trades around $6200 (€5,700), down 7.4% over a week. The price needs to settle above €5,900 ($6,500) and even above €6,500 ($7,000) to confirm a more sustainable bullish recovery. For now, we are still in a bearish trend in the medium term. April is expected to offer new peaks in volatility as the halving of Bitcoin Cash (BCH) is scheduled for next week, and the halving of Bitcoin (BTC) is scheduled for the first half of May.
While containment continues in many countries to deal with the Covid-19 epidemic, the number of people infected in the United States is rising sharply. The price of oil (WTI) is at its lowest in 20 years, demonstrating the weakness of current economic activity. The rebound in stock market indexes that began 10 days ago seems to be weakening. In this context, the crypto market is still correlated with other assets. We believe that this situation will continue until we emerge from the health crisis. On the other hand, when the time of economic and financial consequences will be here, assets such as Bitcoin could be interesting to diversify your portfolio.
Altcoins do not stand out this week and remain highly correlated to Bitcoin. Let’s look at the significant price levels that may trigger the next price movements.
- According to CoinGecko, market capitalization is down to $176 billion from $188 billion seven days ago.
- Bitcoin’s dominance in the market is relatively stable: 65.4%, compared to 66.5% last week.
- It is Crypto.com (CRO) that performs the best this week in the top 20 with +8%.
- CoinMarketCap was purchased by Binance for approximately $400 million. The Halving of Bitcoin Cash (BCH) is scheduled for April 8.
We invite you to discover our full analysis in video (in french, recorded on march 31)
Coinhouse’s Recommendation :
- Patience is still required this week. The price of Bitcoin remains in its uncertainty zone between €5,600 and €6,500 ($6000 and $7000). On April 1st, sellers have once again demonstrated their strength by defending the €5,900 ($6,500) resistance. We therefore still advise waiting.
- To keep a bullish scenario, the signals are first, a price that rises above €5,900 ($6,500) to turn this level into support. Second, the key resistance to break up is the €6,500 ($7000) to build a longer term bullish trend. Crossing this resistance can be interpreted as a buy signal.
- The bearish scenario remains to be watched. The price can’t break above $6,500, if on top of that it breaks the previous support of €5,300 ($5,700), then the downtrend may accelerate. The previous levels between €4,000 and €4,400 ($4,500 and $5,000) could then prove interesting for speculative buying.
Coinhouse’s Recommendation :
- The price of Ethereum (ETH) remains less volatile: down 6% this week, to trade around €121 ($133) on April 1st.
- The configuration is nevertheless different for Ethereum and may justify purchases. The key support level is €110 ($115). As long as the price remains above this level, it is possible to buy with a view to a bullish movement to regain the €145 to €155 ($150 to $160) pivot. If this pivot is also converted into support, then a longer-term uptrend can be built on Ethereum.
- If Bitcoin drops, Ethereum will probably follow the movement. To protect yourself from the drop, watch out for the €110 ($115) support. This break will be a sell signal and will cause the drop to accelerate. In case of a strong fall, a return of Ethereum’s price to its 2018 lowest of €72 ($80) is possible. Speculative purchases may then be attempted.
Coinhouse’s Recommendation :
- Ripple (XRP), performed better than many other altcoins this week with a 4.2% rebound to €0.15 ($0.17) on April 1st.
- However, XRP remains under the influence of a long-term bearish trend, visible through troughs and descending peaks on the weekly time unit, since January 2018. For long-term investors, we therefore advise you to wait for this trend to reverse on the long time units.
- For those who wish to take a little more risk and enter the market more aggressively, the €0.165 ($0.18) pivot level, which served as a support in December 2019, can be a buy signal if the price crosses above it. On the other hand, if the historical support level of $0.14 breaks, this will be an important sell signal for XRP, which could lead to a further sharp drop in the price.
Top & flops of the week (top 50 marketcap)
1- Augur (REP) : +13,5%
2- Crypto.com (CRO) : +7%
3- ICON (ICX) : +10%
1- Basic Attention Token (BAT) : -11,1%
2- Cosmos (ATOM) : -11%
3- Tezos (XTZ : -11%
Latest crypto news
- Brrrrrr. The sound of the billet board spinning in America.
Two trillion dollars. The White House and the U.S. Congress have come to an agreement. $1200 will be distributed to every american adult. Approximately $250 billion. Where will those dollars go? Some of it will end up in financial products. What if some of it, no matter how small, is invested in cryptocurrencies? That could have a significant effect on the market.
- The Maker Foundation is still on the path of decentralization.
The MKR tokens previously held by the foundation are now under the control of the DAO. The DAO is composed of the holders of MKR tokens. Technically, these tokens are controlled by Ethereum contracts, which in turn are controlled by the DAO.
- The Banque de France launches a call for applications for its digital central bank money.
Unfortunately, we won’t be able to have one in our pocket anytime soon, the idea being to create an asset for interbank transfers, even if eventually a digital currency for the general public could be created. The Governor of the Banque de France has reiterated his desire to ensure that only central banks can issue digital money.
- With the advent of negative interest in US bank accounts comes the question of centralized stablecoins.
While the companies concerned assure that the 1:1 parity with the USD will be maintained, this adds a new problem. Although they are seeking to make their money grow through lending operations, what about the risk of default of payment ? Only assets with a cryptocurrencies underlying such as DAI or sUSD are not affected by this new problem.
- 15%. Readjusting the difficulty on Bitcoin.
As a result of the drop in Bitcoin prices, many miners have had to pause part of their operations in order to remain profitable. No worries for the Bitcoin network, which is adapting as expected. Every 2016 blocks the computing power on the network is analyzed and the mining difficulty is readjusted to maintain a block of trades every ten minutes, on average.
- The Binance exchange platform is in the process of acquiring the site coinmarketcap.com
which is the reference for tracking cryptocurrency capitalizations, for $400 million.
- The United States is thinking about a digital dollar on an Ethereum blockchain.
The project is pushed by US Congressmen and would be managed by the FED. Be rassured, the US authorities will still be able to print infinite quantities.
- The International Organization of Securities Commissions (IOSCO) states in a study that stablecoins based on cash collateral should be considered financial securities and therefore fall under particularly stringent regulations.
Products such as Libra or Tether could be directly affected.
Investors’ attention is drawn to the fact that the content of the articles does not constitute investment advice.
Investment in cryptocurrencies carries a risk of total capital loss.
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