Major Cryptocurrencies Form Hammer Pattern

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Summary

  • Cybercriminals hack KuCoin Crypto Exchange
  • Bitcoin (BTC) and Ethereum (ETH) continue to consolidate recent gains.
  • Precious metals underperform major cryptocurrencies on a relative basis.

Cybercriminals owned the headlines this week in the crypto space. Singapore-based cryptocurrency exchange KuCoin was the victim of a large-scale cyber-attack which culminated in the firm losing approximately $200 million worth of customer funds parked in Bitcoin (BTC) and Ether (ETH). Though the finding was disturbing, the exchange has a checkered past. In the last few years, the firm underwent an extensive restructuring and has had to ward off multiple lawsuits.

The silver lining? Major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) barely budged.

If a sizable cyber hack had occurred a few years ago, it might have caused an industry-wide self-off. Not only did BTC and ETH hold well in the face of poor news, but they have also begun to outperform precious metals on a relative basis recently. Gold (@gc) and silver (@si) have started to live below the weekly 10 Exponential Moving Average (EMA) while BTC and ETH have held it so far. The recent action is significant in that it marks a decoupling of the two assets.

This Week’s Topics

  • Bitcoin (BTC) posts the biggest monthly loss since March.
  • Dollar Index (DXY) sees the first monthly gain since March.

Next Week’s Market Forecast

From a macro perspective, global market participants will watch to see how much progress is being made in the fight against the Coronavirus pandemic. Pockets of Europe and North America have seen the number of infected cases rise, though the death rate continues to fall. Markets participants will also be keeping a keen eye on how a contentious U.S election pans out.

Bitcoin (BTC) and Ethereum (ETH) have consolidated in recent weeks. BTC suffered its worst loss in months but perspective matters. Both BTC and ETH are holding above their 10-week EMAs (a popular gauge for the mid-term trend. Last week prices dipped sharply but finished at the highs forming what is commonly known as a hammer candle to technical analysts. A potential leg higher is possible if bulls can push prices above last week’s highs, respectively. f

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