The cryptocurrency market has experienced yet another attempted rally over the past week. As was the case last time around with Ripple, a single crypto, this time Litecoin, triggered a broader spike in market prices across the board. Litecoin, incidentally, hit its highest level since November.
This spike in prices could be due to the news that the creditors behind Mt Gox have presented a ‘Civil Rehabilitation Plan’ to bring the cryptocurrency exchange back online. The movement to revive the infamous exchange is known as GoxRising, and its official website states the following:
“GoxRising aspires to a comprehensive, unified Civil Rehabilitation Plan that stands to maximize creditor recovery through quick payout of the estate’s current $1.2 billion in assets. This includes an ongoing effort to recover and distribute the missing Bitcoin.”
I’m not sure how serious or real this movement is, but from my understanding, Brock Pierce, an early Bitcoin investor, is involved in GoxRising.
Bitcoin’s long road to recovery hit a speed bump over the weekend, as price action narrowed following an explosive rally on Friday. The leading digital currency continues to hold above $3,600 amid the speculation highlighted above that a group of Mt Gox creditors is seeking to revive the exchange and repay victims’ Bitcoin.
At the time of writing, Bitcoin is holding above $3,500 on most major exchanges. The quote price varies wildly across different platforms, but the interval remains between $3,500 and $3,600.
Bitcoin surged more than 8% on Friday to reach its highest level in three weeks. The sudden move higher pushed prices into overbought territory based on the hourly Relative Strength Index (RSI).
Bitcoin is still sitting below the 50-day EMA, although since the price spike on Friday, it has been able to remain closer to the absolutely key $3,700 price resistance level. If Bitcoin makes a move upwards, I would expect it to sit somewhere between $3,700 and $4,100.
If the market takes a turn for the worse during the week, I would expect an exit price level in-between $3,400 and $3,200. If things go very badly, remember Bitcoin is enjoying strong support near $3,200 and at $2,700, which means conditions are favouring sideways movement during the week.
Litecoin experienced a huge rally on Friday, forcing a golden cross on its daily chart and eventually topping $44, its highest level since November.
Once again, the fate of the rally attempt will be decided by the strength of the follow-through action in the market. Although we saw new short-term highs on Sunday, due to the relative weakness of Bitcoin, I remain wary of this move higher, especially in light of the still hostile long-term technical perspective.
That said, the coming week could see some fireworks in the market, and a short-term trend change and a more sustained rally could be ahead, but traders should still consider this a full-on bear market.
Ethereum is also looking quite positive in the short term, as its price is currently holding alongside the 50-day EMA without breaking a sweat.
ETH is trading at around $120, a price we haven’t seen in quite a few trading sessions. Ethereum’s next resistance target is around $140 to $143. A move upwards could take Ethereum to this range, but if the opposite happens, I would expect ETH to fall back to January 2019 levels around $100-$105.
I believe it all depends on how the community will perceive the Constantinople and Petersburg updates scheduled to take place at the end of February 2019.
Both are helping Ethereum to move from a Proof-of-Work consensus protocol to Proof-of-Stake.
Ripple (XRP) has edged down 1% to $0.30, hovering just north of its long-term resistance level.
It seems XRP is now trading alongside a key support level, meaning slight downwards movement could push XRP back to the $0.25 price range.
XRP has been quiet after a recent minor push from $0.29 to $0.30 following the Friday market breakout.
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