MaiCoin Digital Asset Weekly, Oct 4 2019

MaiCoin Digital Asset Weekly, Sep 4 2019

Commentary

Digital Assets ended the week little changed — digesting last week’s ~20% sell off. Volumes were slower as well falling -21% from the previous week. Breadth was better, though, with ~67% of the top 200 coins and tokens ending the week higher.

News flow this week was largely infrastructure and regulatory focused. One of the key themes was a focus on yield producing products with custodian BitGo announcing 7–13% annual returns for savers of select Digital Assets and Coinbase announce 1.25% annual returns for USDC depositors. Outside of that we also had reports of OKeX launching a compliance focused SRO and Coinbase, Cumberland, Kraken and others teaming up to form a Crypto Rating Council — an attempt to offset a lack of SEC clarity with stronger industry standards.

EOS’ relatively small $24M settlement with the SEC (relative to their >US$4B ICO raise) was seen as clearing a significant overhang and helped drive optimism that there could be a path forward for ICOs, IEOs and STOs. Smart contract protocols (upon which ICO type products are built) and projects with ‘unregistered security’ overhangs mostly outperformed; TRX +10%, EOS +5%, ETH +5%, XRP +3%.

Looking into next week, ETH will likely be in focus with Devcon 5 scheduled for October 8. As mentioned below, am a bit concerned that any strength into Devcon will likely be seen as a buy the rumor sell the news type event.

BTC +1% squeaked out modest gains this week after last last week’s dump. Price continues to consolidate just south of the 200 day moving average of $8,500. Continued declines in the 20 day moving average are a bit concerning — especially because it looks like there’s potential for the 20 day moving average to cross below the 200 day over the next couple of weeks. This would be viewed as a strongly negative technical signal. One possible reason for optimism, though, is renewed CNY weakness (Chart 7). The CNY : BTC relationship has broken down somewhat over the last 5 or 6 weeks, but another drop in the CNY should stimulate gains in BTC. Will be interesting to see what news comes out of US/China trade talks next week.

Autoregressive Neural Network analysis from MaiCoin Contributor Andrew Jim this week suggests that over the next 20 days BTC would trade in the $7,600 ~ $10,000 range at a 68% confidence level with a 95% confidence band of $6,000~$11,700. The analysis’ mean price path for the next 20 days is $8,700. The mean level for the longer 100 day forecast hints at a steady price recovery over the next 3 months to around $9,900.

Hope springs eternal!

Thoughts

  • I’m a bit wary of ETH bounce into Devcon…

ETH is enjoying a pretty decent bounce the past 2 weeks after being hammered -50% over the past 100 days (vs BTC -28%).

Devcon. 5 is scheduled to start Oct 8. Historically, Devcon has marked an inflection point for ETH. Either it pumps ahead of Devcon and is sold afterwards or vice versa.

Outperformance into Devcon 5 would make me very wary of the potential for market disappointment around annoumcnets coming out of the event.

News

Charts

Chart 1. Price % change matrix

Chart 2. This time last year…
– BTC, LTC, & BNB trading at their beset levels for this point in past Octtobers

Chart 3. Price vs Volume
– Most coins / tokens in the upper left quadrant — better price, weak volume

Chatt 4. Weekly price performance

Chart 5. Volume Z Score
– Volumes light across the board. TRX trading a bit more than usual.

Chart 6. Average Daily Volume — By Month
– Volumes tracking lower almost across the board in the first few days of Oct

Chart 7. CNY vs BTC
– CNY weakness reaccelerated this week
– Most analysts look for CNY to go to 7.2 by the end of the year

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