Technical analysis

Bitcoin’s uptrend driven by the regain of interest from institutional money

Julien Moretto – 22 Jan 2020

This week was mainly a week of consolidation in the cryptocurrency market. Bitcoin is stable over the last seven days, losing just 1%. Sideways action continues around €7,800 ($8,600). This consolidation pattern is still positive for the uptrend that began in early January, as long as the price remains above $85,00. A breakout of the €8,400 ($9,200) level would open the way to a run at the symbolic $10,000 level.

The best performances remain on the altcoins market. Assets such as Ethereum Classic or Dash gaining respectively 37% and 24% over the week. Volumes on Bitcoin derivatives, which are appreciated by institutional investors, are up sharply. Some statistics provided by the CME Group show an increase of long positions on Bitcoin. Here is ou market analysis.

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  • According to CoinGecko, market capitalisation remains stable at around $240 billion.
  • Bitcoin’s dominance is down slightly to 65.7%, from 66% last week.
  • The two best performances of the week in the top20 are Ethereum Classic (ETC) with +37% and Dash with +24%. Bitcoin SV (BSV) corrected strongly and dropped 27% over the last seven days.
  • The fifth European anti-money laundering directive came out on January 10. Companies involved in the crypto market are forced to tighten their KYC (Know Your Customer) policy.

We invite you to discover our complete analysis in video (in french and dated from January 21):

Bitcoin (BTC)

Coinhouse recommendation: 
Hold

  • Our recommendation on Bitcoin does not change compared to last week, as the course has mostly done sideways action. We still recommend to hold on the positions. As long as the price consolidates between the €7,700 ($8,500) support and the €8,400 ($9,200) resistance, the short-term uptrend is not invalidated.
  • To break up the resistance at around €8,400 ($9,200) will not be easy. The 200-day moving average is also holding back prices at this level. If this resistance is broken, the price will certainly retest the $10,000 (corresponding to €9,200) psychological level. At the moment, we think this is the most likely scenario.
  • On the contrary, a break down of the €7,700 ($8,500) support will lead us to caution. The previous €7,100 to €7,220 ($7,800 to $8,000) resistance will then be an interesting area to buy.
  • In the weekly timeframe, we would like to see more significant volumes to confirm the launch of a new long term uptrend.
  • Finally, we are still monitoring the potential bull cross on the MACD indicator in the weekly timeframe. If this cross is accompanied by a sustained installation of the RSI in the overbought zone in the daily timeframe, then many signals of a real reversal pattern will be confirmed.

Ethereum (ETH)

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Coinhouse recommendation: 
Wait

  • Ethereum remains highly correlated with Bitcoin and is therefore stable over the week: +1.5% in 7 days, at €153 ($168) on January 22.
  • We keep the same recommendation on Ethereum: those who wish to position themselves on a long term perspective must wait. The first buy signal will be taken on a bullish break of the key level at €165 ($180).
  • As long as the price stays in the €145 to €160 ($160 to $180) pivot zone, the trend remains bullish, but it must be confirmed with the break of a major resistance.
  • Ideally, the break of this resistance should be accompanied by an installation of the RSI indicator in the overbought zone on the daily timeframe.

Tezos (XTZ)

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Coinhouse recommendation: 
Buy on breakout

  • Tezos continue ses bonnes performances mois après mois. Il s’apprécie encore de 16% cette semaine pour coter désormais à 1,40€ (1,54$) ce 22 janvier.
  • Tézos présente également un autre avantage : il est peu corrélé au Bitcoin comparé à d’autres cryptomonnaies et fait donc office d’actif intéressant pour diversifier son portefeuille.
  • D’un point de vue chartiste, le cours a repris appui sur la zone pivot des 1,10€ (1,30$) début janvier pour initier une nouvelle hausse. La résistance des 1,45€ (1,60$) est désormais à surveiller.
  • Deux cas de figure : soit le cours offre un repli sur la zone des 1,10€ (1,30$) qu’il faudra alors acheter, soit il casse directement la résistance des 1,45€ (1,60$) ce qui obligera ceux qui veulent prendre position sur Tezos à acheter sur cassure. Le premier objectif sera alors le plus haut de 2019, à 1,70€ (1,90$), une zone qui devrait à minima ralentir la progression du cours.
  • Si le cours franchit le niveau des 1,70€ (1,90$), il faut s’attendre à une accélération de la hausse, avec un RSI qui s’installera en zone de surachat dans sur l’unité de temps journalière.
  • Tezos continues to perform well month after month. the asset is up by 16% this week and is now trading at €1.40 ($1.54) on January 22.
  • Another advantage of Tezos is that it has a low correlation with Bitcoin compared to other cryptocurrencies, making it an interesting asset to diversify your portfolio.
  • From a chartist point of view, the price retested the €1.10 ($1.30) pivot zone at the beginning of January to then start a new uptrend. The €1.45 ($1.60) resistance is now to be monitored.
  • Two likely scenarios: either the price will fall back to the €1.10 ($1.30) zone which is interesting to buy, or it will directly break the €1.45 ($1.60) resistance, which will force those who want to take a position on Tezos to buy on breakout. The first target will then be the 2019 high of €1.70 ($1.90), an area that should at least slow the price’s progression.
  • If the price crosses the €1.70 ($1.90) level, we should expect an acceleration of the bull run, with an RSI that will settle in the overbought zone in the daily timeframe.

Top & flops of the week (top 50 marketcap)


Tops

1- Ethereum Classic (ETC) : +36,2%
2- Dash : +24%
3- Zcash (ZEC): +20,8%


Flops

1- Bitcoin SV (BSV): -25%
2- Bitcoin Gold (BTG) : -21,7%
3- MKR (MKR): -8%

Hot crypto news

  • A property was tokenized and sold in Zurich, Switzerland for USD 134 million.
    Only institutional investors were able to participate in this sale.
    The original owner company retained 20% of the tokens sold.
    Eventually, the tokenization of assets could open up illiquid markets such as real estate to a new range of investors.
    It would also promote the emergence of transparent and auditable secondary markets.
  • The Fifth European Anti-Money Laundering Directive is taking its first victims.
    It came into force on 10 January 2020.
    It requires operators of companies involved in cryptomoney to collect extensive information on their users, their transactions and even their taxation.
    The Kyberswap exchange and the derivatives manager Deribit thus decided to move abroad.
    Other companies have even completely ceased their activities.
  • DigixDAO is over.
    The token holders voted to reimburse the initial investors and redistribute 380 000 Eth.
    The value of the token was based on physical gold.

Investors’ attention is drawn to the fact that the content of the articles does not constitute investment or financial advice. Investing in cryptocurrencies involves a risk of total capital loss. For more information, please do not hesitate to contact our support department.

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