Altcoin Analysis: Cryptocurrency Review — August 2019
September 2, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
The general correction in the market has been going on for more than two months. According to the results of August, the indicator of total capitalization lost about 7.4%, dropping to the value of $248 billion.
As in previous months, altcoins noticeably lagged behind the flagship of the market represented by BTC. In view of this, August was remembered for reaching the Bitcoin dominance index to the values of its two-year highs.
Most of the time, the external background remained relatively neutral, while the incoming news flow decreased noticeably. The first decade of the month, after a number of experts expressed their opinion on the topic of regulation of the cryptocurrency industry in the Senate Banking Committee of the United States, there were good conditions for market recovery and most of the coins were able to show even some growth.
However, the “bearish” moods have returned, and they were associated with the lack of a clear positive after another June growth. Participants continue to take profits, as the significance of the news occasion in the form of a trade war between the US and China is gradually declining.
In the total market capitalization, BTC increased its weight by 4.65%. At the same time, ETH, XRP and LTC lost 1.18%, 0.8% and 0.51% in weight, respectively. The dynamics at which BTC is gaining weight due to other cryptocurrencies have been observed for a long time. Apparently, investors are avoiding risk, preferring quality, and still consider BTC as a safe asset that has the best prospects.
The Google Trends indicator, reflecting the number of inquiries on the subject of Bitcoin, against the background of the ongoing market correction, also fell to its lowest level in the last year.
Bitcoin
According to the results of August, the price of the first cryptocurrency decreased by 5%, which turned out to be slightly better than the average market indicator. The growth of quotations in the first week of the month corrected the boundaries of the downward channel, as a result of which the angle of the trend decreased.
At the end of August, the chart is approximately 6% of the support level of $ 9000. Among the reasons for strengthening the position of BTC, experts call the Fed rate cut, as well as rather complicated negotiations between the US and China on trade.
From a technical point of view, the growth potential of BTC in the current situation is limited by the upper limit of the downward channel, so buying from support does not significantly exceed the potential profit over the risk. At current levels, there is no noticeable increase in activity by the bulls, and most participants prefer to remain outside observers, regardless of the view of the market as a whole. The question of at what point the formation of the reversal pattern will begin remains open, while it is worth noting that in case of a breakdown of the level of $9000, a further reduction in price to the region of $8000 is possible.
Ethereum
According to the results of August, the second cryptocurrency by capitalization lost about 21%, showing a result that is clearly worse than the average market. As a month earlier, traders, making operations with this coin, do it with an eye to the dynamics of BTC. This time the negative was added by the public recognition of Ethereum developer Vitalik Buterin that the blockchain is almost completely filled and there are problems with the network scalability. From a technical point of view, the price of a coin broke the trend line in the first half of the month and approached support around $160. After that, sales stopped, however, there is no rebound yet. In the event of a breakdown of support, it is highly likely to see prices well below current prices. Whether a reversal pattern will be formed at current levels will become clear after some time. Market participants are now in a state of uncertainty,
Ripple
Like last month, the coin lost about 20% of its capitalization. The chart came close to a significant level of support. But without internal drivers, in the presence of a moderately negative external background, given the long-term pressure on the price of the instrument from the side of a large seller, it is impossible to draw a rebound. Thus, the conditions for opening a position for the medium term are simply absent. To change the situation from a technical point of view, growth from current levels is needed, supported by a good amount. At the same time, if the growth is caused by positive changes in the market as a whole, then more interesting and understandable ideas will probably appear.
According to a number of experts, it is precisely the lack of consensus regarding industry regulation that is a factor constraining market growth and the growth of altcoins.
Today, different countries adopt completely different standards and rules not only for regulation, taxation but also for attributing cryptocurrencies to one or another class of financial instruments. All this makes some confusion in pricing, although it is worth noting that there are still significant advances in this matter. In this situation, it is not surprising that most investors prefer BTC to other market instruments; nevertheless, the era of digital money began precisely with it.
Speculators differ from holders in that they are highly flexible and can adapt to any market situation, regardless of whether they believe in the long-term future of one or another coin or not. The payment for such an advantage is patience and periodic forced waiting for a convenient market. Today’s situation is proof of this.
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Author: Marko Vidrih
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