News
Blockchain Rises: 7 Cryptocurrencies Riding the Wave of Trade Fear
Recently, a Forbes article stated that the Federal Reserve is quietly admitting this gold is replacing the dollar, which could have strong implications for cryptocurrencies. While precious metal may be as far from blockchain reward tokens as you can get, the two share strong similarities.
Underscoring the bullish catalyst for both asset classes is fear trading. Of course, the so-called gold bugs can have a rather apocalyptic vision. However, at the heart of the discussion for both asset categories is the concept that the dollar may not have sustainable value. Therefore, it is imperative to diversify away from greenbacks to protect your wealth.
Traditionally, investors took this protective stance with gold investments. However, for modern market participants, virtual currencies represent a more convenient and easily accessible tool. However, with gold and digital assets rising on the same fear of a dollar devaluation, their long-term narratives could be positive. On that note, below are seven cryptocurrencies to watch this week.
Bitcoin (BTC)
Source: Shutterstock
Priced at $69,150 early Tuesday morning, Bitcoin (BTC-USD) has managed to increase by just over 1% in the last 24 hours. Over the past seven days, BTC has gained around 2%. Currently, the market capitalization of the original blockchain asset stands at $1.36 trillion. In contrast, all cryptocurrencies combined have a market value of $2.56 trillion, with Bitcoin dominance at around 53%.
On the bright side, BTC managed to respond well to the bearish attack that took the digital asset below $60,000 in early May. Furthermore, the resulting rally sees the coin rise above both its 20-day EMA and its 50-day EMA. Bitcoin’s 200-day daily moving average (DMA) stands at $54,768, implying that the long-term uptrend is intact.
On the not-so-pleasant spectrum, acquisition volume has been declining since late February this year. Typically, investors will want to see increasing volume levels confirm the sustainability of a price rally. Since we haven’t printed this dynamic yet, conservative investors are probably waiting on the sidelines.
However, BTC’s recent rebound from its 20-day exponential moving average (EMA) suggests near-term optimism. This is one to watch closely.
Ethereum (ETH)
Source: Filippo Ronca Cavalcanti/Shutterstock.com
Priced at $3,770 around midnight Tuesday, Ethereum (ETH-USD) has not been as lucky as Bitcoin and other cryptocurrencies, losing about 1% in the last 24 hours. During the last one-week period, ETH experienced a 2% decline in market value. Currently, the second-largest decentralized digital asset has a market capitalization of $453.3 billion. The coin accounts for approximately 18% of the virtual currency market share.
Ethereum is in a distinct if not unique position. As with other cryptocurrencies, ETH has experienced a sharp decline since the late February/early March cycle. However, in the subsequent rally, Ethereum managed to rise higher thanks to a very high acquisition volume. This is significant because it indicates that the rally is built on solid foundations.
However, the not so great part is that now that ETH has jumped above the $3,700 level, it has been somewhat directionless. Ideally, you would like to see the cryptocurrency jump above $3,800 in an attempt to reclaim $4,000. Unfortunately, the price action from May 21st onwards appears thoughtful.
With no big signals to work with, conservative investors may be waiting for a better read. This could manifest itself in the form of higher-than-expected inflation (i.e. devaluation).
Tether (USDT)
Source: Wit Olszewski / Shutterstock.com
As stablecoins, Bind (USDT-USD) is not the most monitored asset in terms of market performance. After all, since one of the cryptocurrencies is pegged to the dollar, the value should remain stable. However, since the market is a dynamic place, especially for virtual currencies, a perfect peg is never achieved indefinitely. Instead, USDT fluctuates and it is these fluctuations that can help guide investors.
Again, since the perfect peg is never achieved indefinitely, it necessarily means that at any point in time Tether is one of three things: dollar-aligned, worth more than the dollar, or worth less than the dollar. As a cryptocurrency supporter, you will naturally want the USDT to consistently be worth more than its peg. In this way, the dynamic indicates that people feel comfortable investing their wealth in a decentralized form.
However, when the dollar is worth more, this picture suggests the opposite. People are less comfortable with cryptocurrencies and would prefer the security of traditional assets: dividend stocksgovernment bonds, even just the parking of cash funds.
For much of this week, Tether has been trading below its peg level. It’s just something to recognize and look at.
Solana (SOL)
Source: Rcc_Btn / Shutterstock.com
Early Tuesday morning, Solana (SOL-USD) represented one of the top players among the main cryptocurrencies. In the last 24 hours it has gained 2.2%. However, performance over the past seven days has been less impressive, up only about 0.2%. However, SOL right now is trading at a respectable $167. This translates to a market capitalization of $76.7 billion. It represents approximately 3% of the cryptocurrency market share.
On the plus side, Solana’s bullish narrative mimics that of Bitcoin. From around mid-March to the end of April SOL underwent a strong downward trend. However, on May 1, SOL soared from an intraday low of $118.58. At the short-term peak, the cryptocurrency managed to briefly break above the $188 level.
However, on the not so encouraging aspect, a familiar air of skepticism emerges. Since the mid-March session, the volume of acquisitions has significantly decreased. During the rally that began on May 1, volume levels did not really perk up.
Volume levels aren’t everything, but traders like to see confirmatory evidence before making big moves. However, if the dollar’s devaluation turns out to be worse than expected, Solana will be able to fly. That’s why it might be helpful to keep an eye on gold.
XRP (XRP)
Source: Shutterstock
At the time of writing, XRP has reached 52 cents. This means that it has increased by 1% in the last 24 hours. However, over the past seven days, the cryptocurrency has fallen by about 1%. It’s been a disappointing and frustrating series of sessions for XRP holders. Currently, the digital asset has a market capitalization of $28.9 billion. XRP controls 1.12% of the broader blockchain ecosystem.
In terms of positive developments, it’s hard to find much encouragement here. Yes, incurring a double whammy of catastrophic declines on April 12th and 13th, XRP started to rise. During this time, some bullish speculators were buying the discount. There are believers here.
On the other hand, before the aforementioned crash, XRP was trading at around 61 cents. This is the base level that the bulls need to reach. However, as stated earlier, XRP is at 52 cents, down about 15% from its target.
Worse, while XRP was trying to gain momentum in late May, the bears moved in and took the wind out of the bulls’ sails. Currently, the asset is struggling to break above its 50 DMA. It is well below the 200 DMA, which stands at 57 cents. It’s a name to keep an eye on unless we see strong confirmation signs.
Dogecoin (DOGE)
Source: Orpheus FX / Shutterstock.com
Early Tuesday morning, Dogemoneta (DOGE-USD) was trading at just under 16 cents. It has recently been one of the most volatile cryptocurrencies. Over the past 24 hours, DOGE has slipped about 1%. However, over the past seven days, it has lost more than 3% of its market value. Right now, Dogecoin has a market cap slightly less than $23 billion. It commands 0.89% of the blockchain ecosystem.
For speculators there is a mix of positive and negative signals that can influence the final decision. Optimistically speaking, Dogecoin responded well to the volatility that began in late March and early April. Specifically, after falling to an intraday low of 12 cents on May 1, DOGE eventually managed to reach the point where it is now.
However, from a pessimistic point of view, the volume of acquisitions has been clearly declining since the end of February this year. Furthermore, this is really pronounced erosion, which is not surprising. After all, DOGE is a meme coin and is subject to periods of emotion-driven trading. It can get old after a while.
Investors may be better served waiting for a strong signal. Therefore, they should look for clues in the gold market.
Cardan (ADA)
Source: Stanslavs / Shutterstock
At the price of 45.93 cents, Cardan (ADA-USD) appears to be one of the best performing assets among the major cryptocurrencies. Over the past 24 hours, ADA has gained 2.4%. During the final one-week period, it returned just over 1% of market value. Currently, the popular asset has a market capitalization of $16.4 billion. Compared to all other virtual currencies, Cardano holds 0.6% of the industry.
In terms of overall reception, ADA seems aligned with XRP. Both saw terrible drops in value in the April 12 and 13 sessions. After a line was drawn in the sand, the bulls attempted to push the price forward, with little success. Before the April crash, ADA was trading at around 59 cents. This is the baseline.
On the pessimistic view, Cardano’s 20-day EMA and 50-day DMA have consistently imposed upside resistance. This is angering bulls because cryptocurrencies generally do not move sideways indefinitely; it’s shooting for the moon or diving without a parachute.
As with other decentralized assets, Cardano is also suffering from declining volumes. Therefore, it is probably best to wait for a confirmation signal.
As of the date of publication, Josh Enomoto held a LONG position in BTC, ETH, USDT, and XRP. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Guidelines for publication.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major deals with Fortune Global 500 companies. In recent years he has provided unique and critical insights to the investment markets, as well as various other industries, including legal, construction and healthcare management. Tweet it to @EnomotoMedia.