MAX Digital Asset Weekly, Mar 8 2019

MAX Digital Asset Weekly, Mar 8 2019

Digital Assets recovered some of last week’s declines to finish up +2.5%. Trading this week remained active, ending on par with the previous week at a daily average of US$28B. Sentiment improved slightly with 75% of the top 40 coins ending above their 50 day moving averages.

Headlines this week were generally positive with 1) An Argentinean government fund teaming up with Binance on venture projects, 2) Kraken announcing a slew of new executive hires, 3) Jack Dorsey revealing recent BTC buying and 4) TUSD making plans to support real time US$ audits. Canada dominated negative news flow this week with new allegations of improprieties being leveled against digital asset exchange QuadrigaCX and reports that crypto investors are being targeted with audits from the Canadian Revenue Authority.

Trading remained very active this week and is probably the most convincing sign we have that the 2018–2019 crypto winter is beginning to thaw (chart 5). Trading in BTC in the first week of March is already on pace for US$8.6B — the 3rdbest reading on record. Likewise, volume in ETH and LTC are also on pace for the best monthly ADV since 1Q18.

Volatility across the space pulled in significantly this week with Bollinger Bands contracting to a 5-week low as BTC struggled to break above $4,000 resistance. Contracted Bollinger Bands and low volatility normally foreshadow significant price moves. Given a significant uptick in volume over the previous few weeks, a sharp decrease in leveraged longs/shorts (the RSI on leveraged longs is at 30) and the recent drop in volatility — continue to think that risk is skewed to upside and could likely manifest itself as squeeze through $4,000 resistance.

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