Bitcoin, the increase in price drags the sector
Bitcoin, the increase in price drags the sector
Trading

Bitcoin, the increase in price drags the sector

By Federico Izzi - 19 Dec 2019

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After 10 days of suffering, with a strong price increase, the sector led by Bitcoin recovers the weakness accumulated in the last week. Yesterday afternoon, shortly after 15 UTC, the cryptocurrencies driven by Bitcoin scored the best rise in the last two months

A rise that in just under 10 hours sees Bitcoin react from the lows marked by the early hours of yesterday, the lowest price in the last 7 months with the test of the $6,450 area. From there, a reaction started that recovered 1,000 dollars, a step away from 7,500 dollars, cancelling the weakness of the last 10 days. This leads the rest of the industry to benefit from it. 

Source: COIN360.com

More than 85% of crypto assets are in positive territory, an inverse context compared to the last days where negative signs prevailed, with a weekly balance that shows an important recovery especially for the big ones, despite the balance remaining negative, except for Tezos (XTZ) and Cosmos (ATOM), the only two in contrast with positive signs even during the difficult days.

Among the biggest rises, we see Stratis (STRAT) with a +15%. Stratis is a service provider that offers companies the opportunity to build private blockchains. With today’s rise, Stratis is among the top 90. 

Synthetix Network (SNX), Zilliqa (ZIL), Cosmos (ATOM) and Maker (MKR) are also very good, all part of the DeFi sector and earning 10%. 

In the DeFi sector, a record was set with more than 2.9 million Ether locked and a counter value that, however, could not push itself above new records due to the drop in the price of ETH. Compared to the levels of November 30th, ETH was at 150 dollars, while today it is at 125 dollars, the total counter value is 25 million dollars lower and equal to 655 million compared to the absolute record of 687 million set at the beginning of December.

Speaking of records, yesterday Bakkt set a new daily trading record with over 6,600 contracts, for a net value of $47 million. It is a new high for the platform that updates the records of November 27th, in a very similar context, with BTC prices that fluctuated in the $6,500 area. This shows how investors identify the $6,500 area as a very sensitive support that increases trading from investors. 

Trades that as happens during bearish phases, followed by a bullish reaction, see daily volumes rise to over 20%, with trades that return over 85 billion dollars in 24 hours, with peaks of +30-40% compared to recent days. 

At the same time, this is reflected in the sentiment (fear & greed) which, after having reached the lows of the last few weeks, returns to rise again.

Capitalisation returns to above 187 billion after having fallen to 175 billion, the lowest in the last 10 months. The dominance of Bitcoin continues to rise, and this indicates that Bitcoin is always the beacon of general movements, gaining further ground with the dominance that rises to over 68%, highest levels since last September, close to the period highs of 70% and which were not recorded since September 2017. BTC remains one step ahead of the market share record of the last two years. Ethereum and Ripple react negatively, dropping to 7.4 and 4.5% dominance respectively, the lowest levels of the last three months.

Bitcoin chart by Tradingview

Bitcoin (BTC), the price increase

With yesterday’s increase, Bitcoin breaks the bearish trend that characterised a movement in progress since November. With the break-up of the $7,100 area, BTC pushed itself to the highest levels of the last 10 days, a step away from $7,500. This is the crucial level of support in a bi-monthly perspective. At the moment, if the set analysis is corrected, we are nearing the end of the two-monthly cycle that began with the lows at the end of October. 

In the last few hours, the profit-taking of this strong movement prevailed and in 10 hours it led to a 15% gain in yesterday’s day. Prices retrace just over 7,100 dollars. In the next few hours, it will be necessary to assess the resilience of the former dynamic resistance at $7,100-7,200 to understand the resilience of this level of static support. 

To evaluate another signal of a possible bullish reversal, it will be necessary to have a confirmation with extension above the maximums of 7,500 dollars recorded yesterday.

Ethereum chart by Tradingview

Ethereum (ETH)

Ethereum also benefits from yesterday’s rises, yet with a lower intensity. Ethereum yesterday pushed itself to revise the $117 area, the lowest levels since last February. With yesterday’s momentum, it found itself dealing with the former support of 135 dollars, which has now become resistance. Failing to break through this level, ETH returned to $125

To give the first sign of reversal it will be necessary to recover as soon as possible precisely the 135 dollars. Ethereum will have to break out fast from the downward trend that has characterised the prices since June.

Cosmos (ATOM)

Cosmos again achieved a high increase of +8% bringing prices back to the highs reached in recent days in the $4.60 area, providing further confirmation that the setting of Cosmos after the lows of last September, unlike much of the sector still characterised by a bearish trend, is in sharp contrast and in a bullish phase. 

A break of this high over the past six months would take ATOM’s prices above $5. Cosmos has a wide range of coverage in case of a retracement, which would not affect the bullish trend if it remained above $3. 

Federico Izzi
Federico Izzi

Financial analyst and independent #trader – S.I.A.T. & Assob.it partner. He operates actively on stock and derivatives markets (futures and options) since 1997. A precursor of cyclic-volumetric analysis he is known for having identified the most important upward and downward movements in the financial markets of recent years. He participates annually as a speaker at the ITForum in Rimini since the 2010 edition and InvestingRoma and Napoli since the first edition of 2015. He is a guest and market expert on the "Trading Room" and "Market Driver" broadcasts of Class CNBC, Borsa Diretta.tv and on the evening news of Traderlink. Since July 2017 he is a permanent guest on LeFonti.TV, the only weekly national space dedicated to cryptocurrencies alongside the most important international experts in the field. He was interviewed as a cryptocurrency expert for Forbes Italia, Panorama, StartupItalia and DonnaModerna. He was recognized as the first Italian technical analyst to have published the first secular cyclic analysis on Bitcoin. Periodically publishes articles on ITForum News, Sole24Ore, MILANOFINANZA, TrendOnLine and Wall Street Italy. Federico Izzi is... "Zio Romolo".

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