A sea of green washes over the top 20 cryptocurrency tokens again today, as this bull run opens up. Bitcoin has been sliding higher and looks like it ought to have another leg up shortly. We have a short term target on the potential blowout through the $10k level to stop somewhere between $10,600 and just under $11,000.
The fear and greed index remains relatively neutral for crypto, suggesting that the move could really have some legs. We are not quite in the ballpark for it yet, although maybe there is a FOMO rally to be had there somewhere – we will take a look at volumes next.
We noted in an earlier newsletter that some leveraged trading venues were beginning to build significant open interest in Bitcoin. That note was a billion dollars of open interest at BitMex that has already boosted to 1.5 billion.
Volumes in spot markets were higher January as expected. There has been a similar start to February.
BSV did eventually make a move higher, which we had pondered about, leaving it a competitive 5th in highest market capitalisation. BSV and BCH are both due to have halving events before Bitcoin; at this rate both are likely to make the cut as viable cryptocurrencies.
Bitcoin Cash is now up 125% on this particular move having a cracking run, although it looks likely to improve further.
Litecoin and Ethereum have both almost made it a 100% move
XRP is struggling to make it the same way as the others. Ripple had recently released another 500 million XRP, potentially linked to their listing on BitMex around the same time. It is the token that looks the most limited from a technical perspective.
The list of top tokens has changed a lot across the board with Tezos, Dogecoin and Bitcoin Gold gained > 10% in moves that do begin to look like FOMO – Bitcoin diamond has done 33% – or something else altogether.
‘KickToken’ is up 50% and Lisk is up almost 26% today.
It has been an interesting place for the market to turn around, already sitting within the range that had been made after the highs of 2019. Each new major low that is made brings a pile of pressure on the positions taken in the bull-run. Major investors piling hundreds of millions of dollars into the assets are taking a look at these assets and projects with a highly resourced, sophisticated view. The understanding of what Bitcoin is has been permeating, and a paradigmatic break-out of the asset into wide acceptance by traditional finance is highly likely in the case that it breaks 2019 highs. All of these things shape up early in the year to frame a very interesting 2020.
It had been reported that a billion dollars worth of tokens are now locked up in DeFi contracts, up from $700 million dollars in only December. Although the number is great, it likely represents the increase in the price of assets rather than participation within DeFi. It goes without saying that hurdles remain in satisfying compliance and regulation in DeFi, however significant attempts are being made in the space. Creative solutions for privacy, compliance and regulation will be the keys to continuing a decentralised revolution in these more nuanced and complex applications.
Another data analysis report courtesy of reddit says that 26,000 Bitcoin have been locked for a year through the ‘Grayscale Bitcoin Trust’ worth around $260 million dollars the time of writing.
Regulation and Compliance
A major development occurred in regulation and compliance this week. As recently as mid-2019, the regulatory environment appeared hostile to crypto projects and it changed almost overnight. The SEC Commissioner formally proposed a ‘safe harbour’ for Crypto projects in decentralised token projects for 3 years.
This type of leadership in the United States will have implications throughout the rest of the world.
There has also been a tick up in conversations about Central Bank Digital Currencies, prompted by the progress of the Chinese project.