Digital Assets gave up some of last week’s gains falling -3.5% this week on another week of active trading. Overall turnover this week continued to build, ending up +10% to a daily average of US$28B. Sentiment remained positive with 70% of the top coins and tokens ending the week above their 50 day moving averages — though down from a high of 93% earlier in the week.
Volume continued to be a highlight of trading with a long list of coins on track for one of the best months of trading ever. ZEC continues to track its best month of ADV ever while Eth and LTC are on pace for their 2nd best months. Active trading this week brought BTC’s Feb daily average above US$7B — putting it on track for its 4th best month on record.
News flow this week was much lighter than recent. Headlines were led by 1) More US Tech leaders offering positive comments on BTC (Apple’s Wozniak), 2) US Government returning stolen BTC to Bitfinex, 3) Coinbase roundly criticized for acquiring ‘Hacking Team’ backed blockchain surveillance firm Neutrino and 4) reports that Jihan Wu may be leaving Bitmain.
Looking ahead into next week, ETH will likely be the focal point with tomorrow’s Constantinople and St Petersburg hardforks. Given very active trading this month, a lack of historical volume between the current price and $200, a decrease in ETH inflation rate with Constantinople implementation and general pessimism in the wake of earlier Constantinople delays — the path of least resistance is probably higher for ETH. In addition, a significant support line has been built up ~ $100 level after several weeks of very active trading. This week’s pullback has also allowed some steam to escape from across the space after hitting an 11-month high RSI of 74 last week. If Constantinople is implemented relatively smoothly, we think there’s a possibility that ETH could lead a pick-up in sentiment across the space and a resumption of the rally started earlier in the month — allowing the broader space to make an attempt to fill the Nov gap lower, for BTC to make a push to ~ $5,200 and ETH to attempt a break of $200.