Bitcoin, Litecoin Take the Reigns Again as Crypto Bulls Eye New Highs
Are bitcoin (BTC) and Litecoin (LTC) set to break out again? The technical charts seem to say yes.
Bitcoin’s 50-day and 100-day moving averages on the three-day chart are approaching a golden cross formation for the first time since October 2015, a possible precursor to a more sustained rally.
Litecoin has corrected lower from overbought levels, but is still trading well above a key technical resistance-turned-support that could attract a new wave of buyers.
Both cryptocurrencies emerged as standout performers in a week of spotty price action for most of top 20 coins.
Bitcoin Eyes Bigger Gains
Bitcoin’s price was back on the offensive this week, gaining more than 4% between Fridays and setting the stage for another re-test of the $8,800-$9,000 resistance.
If you’re Fundstrat technical analyst Robert Sluymer, now is the ideal time to accumulate more bitcoin. In a research note published earlier this week, Sluymer advised clients to “increase exposure” now that relative strength index momentum has shifted back in favor of the bulls.
Although Sluymer works for a company that lives on in infamy for its dismal price predictions (see: Tom Lee), his analysis of the bitcoin market has been extremely accurate. As our allies at CCN recently pointed out, Sluymer successfully predicted the bitcoin crash of late 2018 and its subsequent breakout in early May.
Bitcoin’s price is trading comfortably above $8,400 at the time of writing. Immediate support is located at the 30-day exponential average (EMA), which has proven near impenetrable in recent months. The leading digital currency remains in strong accumulation, a sign that more investors are buying and holding BTC as a store of value.
Litecoin Maintains Leadership Pace
The cryptocurrency market’s hottest performer in 2019 experienced a major breakout this week. Litecoin, now the fourth largest crypto by market cap after swiftly overtaking bitcoin cash (BCH), catapulted toward $150 for the first time since April 2018.
The rally was a tad overdone, resulting in a swift correction back down toward the low-to-mid $130 range. But even with the correction, Litecoin is up nearly 15% over the past week for a market cap of $8.2 billion.
A confluence of technical and fundamental indicators are driving Litecoin’s price higher ahead of a highly anticipated halving event later this summer. In 52 days, the Litecoin block mining reward will decrease to 12.5 LTC from the current rate of 25 LTC. Demand for the cryptocurrency is expected to surge in the meantime.
Crypto Market Cap Grows
Taken as a whole, the cryptocurrency market booked solid gains this week. Although the rally was driven primarily by bitcoin and Litecoin, majors like Ethereum (ETH), bitcoin cash and Cardano also posted positive returns.
Ether’s value rose 2.5% during the week and was last seen hovering north of $256. Bitcoin cash posted weekly gains of 2.6% to reach $411. Cardano’s ADA currency advanced 2.8% to $0.0883.
Crypto markets recovered more than $23 billion from their Sunday low and were last valued at $266 billion, according to CoinMarketCap. Bitcoin’s dominance rate was back above 56% on Friday after falling to more than one-month lows earlier in the week. Read more: Bitcoin’s Price Sees Renewed Upside Near $8,100 as Dominance Rate Falls.
Facebook’s Crypto Backers
Facebook’s ambitious plan to conquer the digital currency market is getting some major backers.
As The Wall Street Journal reported Thursday, the social media network has signed up more than a dozen companies to back its new cryptocurrency, which will be unveiled next week and launched in early 2020.
Industry titans Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Uber Technologies Inc. are each investing around $10 million in the new crypto consortium. The money will go towards creating the new cryptocurrency, called Libra, which will be pegged to a basket of fiat currencies.
Hacked reported last week that Facebook is set to launch a new whitepaper in support of its cryptocurrency on June 18. The document will likely serve as a blueprint for the upcoming project, addressing the coin’s technical specifications and core functions.
Libra will be rolled out for testing in about a dozen countries later this year before full implementation in the first quarter of 2020.
The Week Ahead and Things to Consider
Let’s just get this out of the way: nobody actually knows where bitcoin will go next. As Forbes recently pointed out, the largest and most influential cryptocurrency is “moving independently of most traditional or expected indicators,” making it especially difficult to predict its future trajectory.
That being said, the technical charts seem to indicate that a breakout is underway. Market sentiment is also shifting back in favor of the bulls with Google search results showing greater interest for terms like bitcoin and cryptocurrency. As CCN reported earlier this week, there are more people searching bitcoin now than at any time during the 2013 bubble.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Charts via TradingView and CoinMarketCap.