Bitcoin to reach $10,000 with the halving effect?

The price of Bitcoin has been breaking resistance on resistance for several weeks now and nothing seems to be able to stop the current uptrend. With another 19% increase over the last seven days, Bitcoin’s price is now at €8,500 ($9,200) on May 6. With the upcoming halving on May 11th, the mood on the crypto market is definitely bullish. The $10,000 on Bitcoin doesn’t seem to be very far away anymore, but we’ll see that this area could also be interesting for sellers.

Altcoins are in the wake of Bitcoin but have been performing less than Bitcoin for the past week, with Ethereum gaining 5%. The correlation between cryptos and equity markets continues, while the US S&P500 benchmark has been on a recovery trend since the end of March. Note that Bitcoin outperforms the stock market indices over the year 2020. Analysis.

• According to CoinGecko, Market capitalization continues to rise with $253 billion, up from $240 billion seven days ago.

• Bitcoin’s dominance increases to 65.5% from 63% last week.

• Ethereum Classic (ETC) offers the week’s best performance of the top 20: +17%.

• A few days before the halving, the computing power on the Bitcoin network breaks a new record, proof of the miners’ confidence in the future.

We invite you to discover our analysis in video (recorded on may 5, in french)

Bitcoin (BTC)

Coinhouse’s Recommendation : 
Hold / Partial profit taking

• Last week, we were advising to take partial profits (e.g. 15 or 25% of a position) after Bitcoin’s nice 21% rise. The $8,000 resistance broke up and the price quickly moved to around €8,300 ($9,000) which corresponds to 0.5 of a Fibonacci retracement of the big weekly bearish move observed since June 2019. The current bullish trend has been going on for weeks now. For those who haven’t taken profits yet, we advise you to do so. For those who would have already done so, we advise you to keep it.
  
• Bullish scenario: we break resistance again and the price still rises, despite the presence of a downtrend line on current levels, to move towards the €9,200 ($10,000) zone. It will then be necessary to think of taking partial profits again because it will be a technical zone likely to interest the sellers.
  
• Bearish scenario: the price clearly reverses to the daily unit of time. The first level to observe for buying will then be between €7,000 and €7,200 ($7,700 and $8,000). If this support doesn’t hold, then the €6,600 ($7,200) area will be a good area for buying.

Ethereum (ETH)

Coinhouse’s Recommendation : 
Partial profit taking

• Ethereum is following Bitcoin this week, but with a less strong trend: +5.3% over one week. ETH remains around €189 ($208) on May 6th. An end of the uptrend is to be watched.

• Last week, we were saying that Ethereum still had bullish potential to reach the resistant zone, located around €200 ($225). We’re there now, so we have to take partial profits on Ethereum this week. We’ll be watching the indicator in particular in the coming days. If the reversal of the trend is confirmed on the daily time unit, the chartist levels of €160 then €140 ($180 then $160) will surely support a rebound in the price.

• Conversely, if the price continues to rise, the €240 ($260) technical zone remains an area to watch for new profit taking.

Litecoin (LTC)

Coinhouse’s Recommendation : 
Wait

• Litecoin (LTC) is the least performing asset compared to Bitcoin and Ethereum: +2.6% this week, at €43.50 ($47) on May 6.
  
• The Litecoin price has struggled to show an uptrend since its March 13 low. The rebound is much weaker than on Bitcoin as Fibonacci retracement levels show that the Litecoin’s rebound has only regained 20% of the early March decline, compared to 65% for Bitcoin. Thus, LTC offered an interesting pivot zone for purchases around €35.50 ($40). But its break up did not cause any particular bullish acceleration, demonstrating a weakness of this crypto compared to others. We therefore advise not to buy on Litecoin as long as the price shows such weakness.

• For those who have already bought Litecoin, we advise you to keep it but the break at the bottom of the 35.50€ ($40) support will be a signal of sale.

Top & flops of the week (top 50 marketcap)

Tops

1- Digibyte (DGB) : +108%
2- Ethereum Classic (ETC) +17,6%
3- Bitcoin (BTC) : +16,2%

Flops

1- Algorant (ALGO) : -4,5%
2- Lisk (LSK) : -3,6%
3- Icon (ICX) : -3,6%

Latest crypto news

• Bitcoin has outperformed both the S&P 500 and gold since the beginning of the year with the halving date approaching. Prices have resisted well to the 5.5% drop in the S&P between April 30 and May 4. Correlation remains at record levels, however.

• The uptrend is mainly driven by the United States.
  In particular, some US citizens had been using government stimulus cheques to buy Bitcoin. These investors currently enjoy a 35% return on investment. The value of their stimulus has therefore increased from $1,200 to $1,610.
  
• Vitalik Buterin announces that money creation in Ethereum 2.0 will be at maximum 2 million per year, and probably much less. The founder of Ethereum has thus stated that he wants to drastically reduce the current creation. Good news for ether owners, whose assets will be better valued. Less good news for the future participants in the Ethereum 2.0 proof of stake mechanism, who will have "only" two million ethers to share annually. He also announced the possibility of variable block sizes and ether destruction mechanisms during periods of high volumes.

• Universal Market Access (UMA), inaugurated a new way of conducting fundraising.
  After the ICOs, UMA’s teams raised funds directly through the decentralized Uniswap marketplace. UMA is a set of financial contracts on Ethereum. They are positioned on the synthetic assets market, such as for Synthetix Network, and on the Oracle market, such as ChainLink.
  
• Bitcoin on Ethereum, we’ve been talking about it for a long time.
  A new project is born, tBTC, which proposes to represent bitcoins in the form of ERC20 tokens. tBTC is more decentralized than previous projects, and could be favoured by the community. Moreover, it will be available very soon on the MakerDAO and Compound platforms.

• More news about Bitcoin in Ethereum: wBTC, another representation of Bitcoin on Ethereum, is now available on MakerDAO as collateral for loans. MakerDAO aims to offer new types of collateral to the system but also to stabilize the DAI price, which is slightly above the dollar for more than a month.

• The ICO Telegram continues Under pressure from American regulators, the whole project could collapse definitively. Telegram is now forecasting a launch in April 2021, but is also envisaging a cancellation and the reimbursement of investors.

• Sales of XRP by Ripple Labs fell dramatically by -87% in Q1 2020 compared to Q1 2019.
  1.75 million in revenue compared to $13.08 million the previous year. Ripple Labs can sell up to 1 billion XRP token per month. These tokens are bought by institutional investors or market places. Jeb McCaleb, co-founder of Ripple, who has moved away from the project to focus on Stellar Lumens, sells 1.8 million XRP per day. He is therefore creating more downward pressure on assets than Ripple itself. He still has XRP 76 million.

• ChainLink is partnering with Smart Chain Arena and Cryptonomic to integrate their service with Tezos. This will allow application developers on Tezos to use ChainLink as an off-chain information source for their decentralized applications.

Few numbers:

• The Ethereum blockchain has just reached 10 million blocks. This is much more than Bitcoin, since it produces one block every 15 seconds instead of one every 10 minutes.

• The Bitcoin hash rate is at its highest, proof of miners’ confidence in the future. It has reached 139 EH/s

• The development of the Bitcoin protocol is accelerating: April 2020 is the month with the most updates.

• 74% of the energy used to mine Bitcoin is renewable.

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Investment in cryptocurrencies carries a risk of total capital loss.
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