Weekly Forecast: Bitcoin Eyes Corrective Rally as Altcoins Come Off Lows
The cryptocurrency market is coming off yet another down week, but recent movements in the bitcoin price suggest that a recovery may be afoot. This has rubbed off on altcoins and tokens, which on Sunday regained some of their lost market share.
In traditional markets, a potential breakthrough in U.S.-China trade negotiations will headline the agenda this week. Economic data and the minutes of the most recent Federal Open Market Committee (FOMC) meetings will also be on investors’ watch list.
Cryptocurrency Market Searches for Direction
Cryptocurrency prices stabilized over the weekend, as bitcoin eyed a major technical resistance and the broader altcoin universe rebounded from their recent lows. At the time of writing, the combined value of all digital assets was $217.6 billion, which is roughly $29 billion higher than last Tuesday’s swing low.
Bitcoin’s share of the total market has fallen to 51.6% from a high of 54.5%, according to CoinMarketCap. The leading digital currency by market capitalization was last seen trading at $6,492.70 on Bitfinex, having gained 1.6% on the day. The bitcoin price reached a session high of $6,550.
The technical charts continue to favor a short-term breakout. Bitcoin has moved above the 50-period moving average and is eyeing the 200-period MA as the next target. The BTC/USD cross is also showing positive momentum, with the relative strength index (RSI) fast approaching 60.
Beyond bitcoin, altcoins and tokens have also shown signs of stabilizing. All major coins in the top-ten (excluding Tether) had reported gains on Sunday.
U.S.-China Trade Relations
U.S. stocks received a boost on Friday amid reports that the United States and China had agreed to plot a road map for settling a lingering trade dispute. Both sides are attempting to end the trade impasse ahead of a planned summit in November between President Donald Trump and Chinese counterpart Xi Jinping.
As Hacked reported last week, China will send a trade envoy to Washington later this month to begin low-level discussions.
Beijing is looking to ease trade restrictions with the U.S. amid tangible signs that its economy is in a protracted cool down. Last week, a spate of Chinese growth figures missed analysts’ forecasts, with a key measure of fixed-asset investment slowing to a record low.
The Week Ahead
The following is a breakdown of major market-moving events throughout the week.
Blockshow Americas 2018 officially kicks off in Las Vegas on Monday. More than 80 speakers and 1,500 attendees will attend the conference, which has been dubbed “the best place for blockchain business.”
Digital currency exchange Bittrex will also list XRP/USD and ETC/USD trading pairs on Monday, giving investors more access to some of the world’s leading cryptos.
There are no major market-moving events scheduled for Tuesday.
The minutes of the July 31-Aug. 1 FOMC meeting will be released on Wednesday. Although the Fed made no changes to monetary policy earlier this month, it sent a strong signal that interest rate rises are coming.
That being said, the bulls are clearly not out of the woods yet. It remains to be seen whether the recent bout of stability is a symptom of technical re-position or a minor bounce.
A steady stream of economic data will make its way through the financial markets on Thursday, including the latest batches of PMI data for the Eurozone and United States. The U.S. government will also report on initial jobless claims and new home sales.
In monetary policy, the annual Jackson Hole Symposium will kick off on Thursday with speakers and attendees from around the world. The summit will run through the weekend.
The World Blockchain Marvels Summit will begin in Hong Kong on Thursday. More than 1,500 attendees are expected for the two-day event.
On the data front, U.S. durable goods orders and German GDP will headline the economic calendar on Friday.
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.