The year 2020 will have been eventful but ultimately positive for the cryptocurrency market. Bitcoin signs another week of growth, up 18% to €19,000, or $23,000 on December 23. Now in price discovery, the best attitude to adopt as an investor is to determine in advance psychological price levels on which you will gradually exit your buying position. Strong price corrections, in the order of 20 to 30%, will be opportunities to position or reinforce your purchases. However, beware of the coming month of January, which has often been a bearish month on the market. In addition, the current uptrend has been extending since the beginning of October, a pro-rata correction of the rise would not be surprising. We see in the detailed analysis the possible key signals and levels to intervene.
The altcoins are less at the party. Ethereum has the greatest difficulties to follow Bitcoin. It’s worse on the XRP side: negative news with the SEC, seems to be catalyzing a sharp drop in the price.
Nevertheless, we are entering 2021 on a very positive touch for the market. The macro-economic context and recent statements by investment professionals on Bitcoin suggest that the asset will still be highly sought after in 2021 in view of its performance in recent months. Finally, since this is our last analysis of the year 2020, we wish you a happy holiday season and look forward to seeing you in 2021 to continue to follow this exciting market!
- According to CoinGecko, market capitalization is growing rapidly, at $656 billion compared to $600 billion last week.
- Bitcoin’s dominance increased sharply to 66.7% from 62.3% last week.
- The best performance of the top 50 is to be attributed to Ziliqa (ZIL) with +68% over one week.
We invite you to discover our analysis in video (in french and dated from December 22) :
- Bitcoin thus reached €19,300 ($23,500) on December 23, a 20% increase over 7 days. We are now in price discovery, which is obviously the most bullish market configuration. We won’t try to sell, even partially, without prior reversal signals. The price is currently on a weekly Fibonacci extension zone: that of 1.618 to €19,400 ($23,700). We see that there is resistance on this zone, but no strong rejection either.
- So we hold this week. The most prudent ones will be able to take partial profits. If a marked correction takes place, the first price zone to buy back is the retest of the old historical high, between €16,000 and €16,500 ($19,200 and $19,700). As always, we will wait for a price reaction in this zone before intervening.
Hold / Profit taking
- The situation is more complicated for Ethereum (ETH), up 4% over the week to stand at €496 ($605). The false break of €520 ($623) does not bode well for the moment. We also keep Ethereum this week without making new purchases. Same thing for the most cautious: partial profit taking. It is not impossible that the course will go back to the €440 ($540) support in the next few days, or even the €395 ($490) support if the correction is more pronounced. These zones remain buying or strengthening opportunities to play a continuation of the rise towards the large resistant zone of $700 to $800.
- XRP is down more than 25% this week and is back to €0.26 ($0.30). The news around the SEC has been a bearish catalyst and makes XRP’s rise unsustainable once again. The $0.65 was a favorable selling area. Bullish Fibonacci retracement levels between $0.44 and $0.50 were pushed lower. The price is now back on a polarity zone between $0.30 and $0.35. The best was to sell on our identified profit taking zones. We are now waiting to see how the price reacted in the current zone and advise against buying XRP until a first significant rebound is observed.
Tops & flops of the week (top 50 marketcap)
1- Ziliqa (ZIL) : +68%
2- Theta Network (THETA): +50%
3- Synthetix Network (SNX): +40%
1- XRP : -27%
2- WAVES : -19%
3- Filecoin (FIL) : -15%
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