Can coronavirus affect the crypto market?

While a wave of panic is affecting stock exchanges, the crypto market is also in decline but seems to be resisting better. The following days will be interesting: Bitcoin is down 10% in one week and is on the €8,300 to €8,500 ($9,200 and $9,400) level which should act as a support to confirm the long term bullish recovery initiated at the beginning of the year. If the coronavirus crisis continues, we will see if Bitcoin’s price moves in line with the major world stock exchanges or if it differs completely, which will validate or invalidate its safe haven asset status.

The altcoins that were the best performers for weeks have started more severe corrections. Tezos (XTZ) loses 20%, Ethereum (ETH) loses 15%. But they are already arriving at interesting levels for buybacks. Prices were showing first signs of bounce on the afternoon of February 26.

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• According to CoinGecko, market capitalisation has dropped sharply this week to $262 billion from $300 billion seven days ago.

• Bitcoin’s dominance is on the rise again because Altcoins are suffering bigger losses: 64.3%, compared to 62.4% last week.

• In this bearish context, only Algorand (ALGO) is doing well in the top 50 of the market with +5% in one week.

• Billionaire Tim Draper claims to have closed all his stock positions 6 months ago and strengthened his Bitcoin positions, targeting a price of $250,000 in 2022.

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Bitcoin (BTC)

Coinhouse’s Recommendation : 
Buy

• The correction that we anticipated last week did take place. The decline has accelerated since the beginning of the week and the price has already come in contact with the €8,300 to €8,500 ($9,200 to $,9400) level. This area was our first point for buybacks. We are keeping some capital to buy, just in case the decline continues and brings the price in another interesting zone: the €7,700 to €7,800 ($8,500 and $8,600) level.

• The RSI in the 4-hour timeframe came into the oversold zone on the afternoon of February 26, which caused a bounce. It remains to be seen if this bounce will be sustainable, as the MACD momentum has not yet returned to a bullish trend in the daily timeframe. The bounce will be confirmed if the price closes above €9,100 ($10,000).

Ethereum (ETH)

Coinhouse’s Recommendation : 
Buy on support

• Ethereum (ETH) is down 16% this week, at €218 ($226) on February 26. This correction is logical after the strong uptrend observed since the beginning of the year.

• The situation is more difficult to analyze on Ethereum. There are two levels that seem very interesting to make buybacks: between €205 and €208 ($220 and $225), then between €180 and €183 ($200 and $205). These areas also correspond to key Fibonacci retracement levels, as shown on the chart.

• However, the asset remains in a very bullish momentum and could start to rise again before reaching these levels. If this is the case and our indicators give us confirmation of a bullish recovery, it will be possible to buy when the break up of the €238 ($250) pivot level will occur. The price action that will take place over the next few days will be decisive and will validate one or the other of the scenarios.

Tezos (XTZ)

Coinhouse’s Recommendation : 
Buy

• Tezos (XTZ) is down 20% this week and is now trading around €2.52 ($2.70) on February 26. As with Ethereum, we expected this correction following the parabolic rise observed in Tezos’ price in January and February.

• Since the price of Tezos had not reached these price levels for several years, we use Fibonacci retracement levels to identify potentially attractive buyback levels. A first level already seems to be reacting on February 26th: the €2.40 ($2.58) level. This corresponds to a 50% retracement of the parabolic rise initiated since the beginning of January.

• Tezos has been one of the best performing altcoins since the beginning of the year. There is a strong probability of a marked bounce at this level. If this bounce fails, we will watch for the next Fibonacci retracement level (0.618) at $2.26.

Top & flops of the week (top 50 marketcap)

Tops

1- Algorand (ALGO) : + 4,9%
2- Leo Token (LEO) : -5,4%
3- Crypto.com (CRO) : -10,5%

Flops

1- NEM (XEM): -27,5%
2- NEO : -27,1%
3- Dash : -25,3%

Latest Crypto News

• The fear of coronavirus is spreading worldwide. Stock markets are plummeting  for fear of an economic downturn. Yet Bitcoin is not benefiting from this, despite the fact that it is often promoted as a safe haven asset such as gold, which is rising sharply. Studies have shown that the correlation between gold and Bitcoin prices is declining. It is therefore ultimately possible that Bitcoin is not following the stock market or precious metals, but its own path.

• In an interview, billionaire Tim Draper claims to have closed all his stock positions six months ago. Tim Draper is known to be particularly fond of cryptocurrencies and Bitcoin in particular. As a result, he has greatly increased his Bitcoin positions, targeting a price of $250,000 in 2022.

• China is often criticized for concentrating almost all mining capacity. An American company, Layer 1, plans to repatriate some of the capacity to the United States. It is expected to reach 2% in 2020, then 30% of capacity by 2021.

• MKR holders have been very reactive to exploited vulnerabilities in bZx contracts via flash floans. MakerDAO was able to anticipate a vulnerability that would consist in using flash loans to take control of governance by borrowing more than 9% of the outstanding MKRs. The attacker could then make decisions against the users of the system. To mitigate this risk, a vote was held to impose a 24-hour delay between the MKR holders’ decision making and the implementation of the change voted in the protocol. This therefore allows sufficient time to thwart this type of attack. The MakerDAO protocol strengthens itself and learns from the vulnerabilities of its comrades.

• Tether converts 300M dollars from TRON to Ethereum, that is 30% of the USDT on this blockchain. Ethereum now represents more than 50% of the USDT in circulation. Ethereum still shows that it has become the reference platform for most of the projects developing in the crypto world.

• Cristiano Ronaldo is now tokenized on the Ethereum block. Sorare, the company behind the eponymous collectible card game, has signed with Juventus. Sorare allows users to hold ERC-721 tokens corresponding to their favourite players. Players can bid for them, sell them on secondary markets, or win prizes based on the actual performance of the teams they set up.

• Ripple plans to build a bridge between Ethereum and Ripple, using the Interledger Protocol that the company has developed. They also recognize half-word a weakness in their system, which does not support the notion of smart contracts native to Ethereum.

• On the other hand, Ripple has reported great success in the use of its remittance service. 54M dollars were transmitted from the United States to Mexico during the first week of February. As a reminder, Ripple had invested in the MoneyGram platform and thus imposed its technology for the transfers that this company makes.

• Sweden is the first country to create its state digital currency. Created in partnership with Accenture, e-krona is currently being tested in the country until 2021. The chosen technology is not yet known.

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Investment in cryptocurrencies carries a risk of total capital loss.
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