Here is your weekly dose of insightful market analysis and trending stories from last week.
The Highlight of the Week
Did Libra get a worthy rival?
Venus, yet another astrological name was dropped in the realm of stablecoins this week. The news is significant because it is Binance. After the announcement of Binance US to compete against the giant Coinbase, with Venus, Binance plans to take on Libra.
So, does Binance’s stablecoin matter? In the press release, Binance’s co-founder said that governments across the world would move towards central bank-backed digital coins. Central banks across the globe are trying to figure out their digital currencies, and China has already announced that its digital currency will be out sooner than we think. With this backdrop, Binance will likely strike partnerships with some of the governments. It is plausible because Binance possesses the necessary experience dealing with blockchains and stablecoins.
On the one hand, in the backdrop of Facebook fighting its bad image for having reckless data security measures, Binance may steal the show away from Facebook’s Libra. But, on the other hand, Facebooks has an enormous scale on its side. The stablecoin scenario just got more interesting after the launch of Venus.
Top News From Last Week
While Binance announced its services in the US and there is a possibility that Coinbase will lose some customers to Binance, Coinbase is strengthening its position in the custody biz. Xapo is a long-standing cryptoasset custodian known for using physical vaults in Switzerland to store crypto assets. With this acquisition, Coinbase will reportedly have over 860,000 bitcoins which as of writing is over $8 billion.
Bakkt is launching custody and physically settled daily, and monthly Bitcoin futures in partnership with ICE Futures US and ICE Clear US. Bakkt is the first major physically settled Bitcoin futures, and it will increase the liquidity. ICE (Intercontinental Exchange) is the firm that owns and operates the NYSE. Bakkt is working with two companies: Microsoft and Starbucks. While Bakkt is leveraging Microsoft’s Azure, Starbucks wants to make crypto payments more accessible, and there are rumors that it might launch its stable coin with the help of Bakkt. With the sheer scale of these companies, crypto adoption will get another impetus.
Bakkt is also crucial from a competition perspective. Though we have come a long way in terms of custodian infrastructure, one entity controlling the majority of bitcoins is a systemic risk. Bakkt’s physically settled futures and custody services are essential for healthy competition in custody market.
In late 2017 and early 2018, random projects raised money in the name of blockchain buzzword and delivered nothing. The bear market sent a strong message to teams. This time, the investors are smarter. Therefore, what we are witnessing is a flight to quality. Teams will have to try a lot harder to grab investor attention by showing their deliverables. We believe this correction was necessary, and the fact that the broader market is decoupling from random altcoins is a healthy sign for the entire ecosystem.
Weekly Technical Analysis
Bitcoin managed to rebound on the $9.5k after a steep drop, induced by the breakout of the $11k support level.
Since then, Bitcoin has gone back and forth between the uptrend acting as a support and the $10.6k short-term resistance level.
Finally, Bitcoin was able to break out and close above the $10.6k resistance. However we have reasons to question the sustainability of this movement as the volume is still decreasing and the stochastic oscillator is showing a bearish crossover, indicating a high probability of a pullback.
Scenario 1 (most likely): As long as volume remains low, we do not see any sustainable breakout occurring, therefore Bitcoin shall evolve between its uptrend and downtrend in the near future until buyers or sellers take the upper hand.
Scenario 2: Unable to sustain the current rebound, we could see a breakdown of the current uptrend, Bitcoin targetting the $9.5k level and $9k where we could expect buyers to step in.
Summary: Short-term: Bearish - Medium-term: Neutral - Long-term: Bullish
Ethereum managed to break through its downtrend and is now testing the 0.019 BTC resistance level.
This is the second attempt to break through its downtrend for Ethereum, the previous one, ending up in a bull trap followed by a massive sell-off bringing back the coin to its year lows at 0.017.
Volume remains low and decreasing, showing a lack of liquidity in this market.
This move also occurs within a bearish context, Ethereum having suffered from Bitcoin’s dominance since the beginning of 2019.
The stochastic oscillator is showing a bearish crossover that could lead to a pullback in the short-term.
Scenario 1 (most likely): Buyers are unable to sustain the rebound as volume’s momentum is decreasing. Sellers take advantage of the current resistance level to bring back the coin to its yearly lows.
Scenario 2: Ethereum manages to break through the current resistance and target the next resistance level at 0.0197.
Summary: Short/Medium-term: Bearish - Long-term: Bullish
Top Performing Tokens
Top performing tokens from AUG/09/2019 to AUG/16/2019 were:
Worst Performing Tokens
Worst performing tokens from AUG/09/2019 to AUG/16/2019 were:
ROI of Recent IEOs
ROI of recent IEOs until AUG/14/2019:
Tokens With Most Volume
Tokens with the most volume from AUG/09/2019 to AUG/15/2019 were:
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