Crypto Market Forecast: The week ahead, 27th May

The past week saw bears again battling to re-establish their position only for the crypto markets to finish the week with explosive gains on Sunday. The bulls enjoyed another green trading week during what has been a bumper month. Market benchmark BTC ended the week up ~8% and is now up ~59% since the start of May. BTC remains on track to post its second-highest quarterly gain since 2014.

The second and third largest crypto assets on Brave New Coin’s market cap table, ETH and XRP were up 3% and down 1% respectively, with the end of week market reversal driving a recovery after a mostly red 7 days of trading. The overall market cap for crypto rose ~5% over the last week.

The upward market trajectory continues to contradict a number of market participants. On major Bitcoin derivatives and options platform, Bitmex, the current ratio of BTCUSD longs to shorts sits at 55% to 45%, suggesting there is still significant short interest, with many traders expecting a pullback or move down. Until the move up on Sunday, short interest grew slightly against longs during the week.

This week the SEC announced another delay to the VanEck-SolidX ETF decision, with a further 35 days added before final resolution. The SEC listed 14 points within the proposal and invited members of the industry and public to review and respond. Questions included the ability of ETF providers to protect institutional and retail traders from market manipulation and irregular price activity on markets outside of regulated Bitcoin futures markets.

Brave New Coin’s CEO Fran Strajnar added to this discussion with new details released over the weekend outlining BNC’s work towards un-qualifying the exchanges that threaten the credibility of the space by reporting erroneous volumes. BNC has also worked towards mitigating the echo chamber of faked exchange data reporting through the liquid indices program. The liquid indices benchmark and report Bitcoin, Ethereum and XRP prices using a multi-factored indexing methodology that considers an exchange’s minimum trading volumes of $USD, $EURO and $BTC. It also considers whether formal Anti Money Laundering and Know Your Customer processes (AML-KYC) have been deployed.

On Friday, the crypto industry learned more about Facebook’s increasingly anticipated cryptocurrency project, Globalcoin. The token will be issued through a Swiss-based subsidiary, ‘Libra’, and is said to have an earliest possible launch date of Q1 2020. The token is expected to be a stablecoin that will have utility as a payment tool within Facebook’s billion user + strong social media platform ecosystem.

High profile industry figures such as Michael Novogratz, Anthony Pompliano and Ari Paul have highlighted the potential importance of Facebook to the crypto industry. They point to the likelihood for Facebook to act as a gateway for millions of its customers to gain a greater understanding of Bitcoin and crypto assets.

This week in crypto events

29th May- Chainlink mainnet activation

Chainlink, the secure blockchain-based oracle network, launches its Ethereum based mainnet this Thursday. Chainlink aims to integrate off chain resources and data which would otherwise be excluded by normal operations on platforms such as Ethereum. The market has responded positively to the event with native token LINK rising over 150% in the last 30 days. A smooth network release combined with positive ecosystem sentiment may suggest further gains and new price discovery.

30th May- Tezos mainnet Athens-A Activation

The Tezos blockchain self amends for the first time this Wednesday following a successful multi-stage stakeholder vote to determine whether it was necessary for the Tezos project to make the changes. The switch will arrive with backward incompatible increases of gas limits and decreasing of roll zize (making it easier to become a self-sovereign block producer). The price of XTZ has grown an impressive ~46% in the last month.

A stuttering week for large cap assets finished strongly with large gains on Sunday, leaving the majority of top 10 assets trading green by the week’s end. Litecoin (LTC) was one of the week’s major winners with anticipation of the Litecoin halving (set to happen in about 70 days) continuing to drive strong medium-term gains. Outside of the top 10, tokens such as Bittorrent token (XBTT) and Maidsafecoin (MAID) were some of the week’s other big gainers.

The BLX price for Bitcoin dropped as low as $7,535 on Thursday before steady recovery towards the $8000 level on Friday and Saturday, and a price and volume spike on Sunday. With the Bitcoin markets continuing to gain through Sunday and technical indications of a bullish weekly close, crypto markets may be set for another strong start to the week.

Bitcoin’s hash rate continues to increase, building on the uptrend that began in December 2018. The most recent difficulty update on May 25th, increased bitcoin mining difficulty by ~5%.