Digital Assets ended the week +2.2%. Trading remained roughly inline with the previous week at a daily average of US$30B. Overall it was a dull week in both price action and news flow. Breadth remained skewed to the positive with 68% of the top 200 coins / tokens ending the week up and 93% of the top 40 coins ending the week north of their 50 day moving averages.
News flow remained light this week. Top stories this week included: 1) Bakkt’s valuation upped to US$700M, 2) Bitmain’s IPO application expiring, 3) Bitwise’s report on industry trading volumes and 4) BitTorent launching a new live streaming service.
Trading remained robust across the space with volume in LTC on pace for a daily average of US$1.8B this month — the best ever; and trading in ETC, ETH, DASH, XLM, EOS all on pace for their 2nd most active months on record.
Given the continuation of low volatility trading this week, our overall view remains unchanged. We reiterate our view that Digital Assets have likely already printed the lows of this cycle (in 4Q18) and that the rest of the year will be characterized by consolidation and an eventual grind higher. The US$135B level (US$4,000 for BTC) remains a key level for Digital Assets. This level is clearly an important psychological level. With the space as a whole continuing to trade above the 20 day moving average and with the 20 day moving average continuing to trend upwards, odds are still supportive of extended gains. As highlighted last week, If the space as a whole can break convincingly above the US$135B level (US$4,000 for BTC), we think that the most likely scenario is for Digital Assets to fill the gap created by the Nov 2018 correction and for a recovery to around the US$200B market cap level (for BTC this implies an initial recovery to around US$6,000). The Nov 2018 correction resulted in a sharp price decline on very little volume. That lack of volume means that there is very little resistance to prevent price from recovering to the US$200B market cap level.