InvestMacro

By ForexTime

• Bitcoin Cash, Dogecoin each climbed over 130% so far in 2024
• Futures for Dogecoin, BitcoinCash, Litecoin to start trading on US exchange this month
• Bitcoin “halving”, due in late April, may boost other cryptos

Of the 11 crypto CFDs offered by FXTM, Bitcoin Cash is leading the pack with about 160% in year-to-date gains.

That 160% is far superior compared to the “OG” Bitcoin’s 64% year-to-date gains.

BITCOINC (Bitcoin Cash) has now touched the $700 mark for the first time since November 2021, before the crypto world fell into the infamous crypto winter of 2022.

What is Bitcoin Cash?

According to CoinGecko data, Bitcoin Cash is the world’s 14th largest cryptocurrency, with a total market value (market capitalisation) of US$13.4 billion.

Created in August 2017, Bitcoin Cash is an offshoot of the original Bitcoin, with the former intended to be the faster and cheaper version of the latter.

Dogecoin is not far behind in 2nd place (for now), having soared about 140% so far in 2024.

What is Dogecoin?

Dogecoin is now the 9th largest cryptocurrency in the world, according to CoinGecko, with a market cap of nearly US$30 billion.

Created in December 2013, this cryptocurrency began as a “joke” off the popular meme featuring the Shiba Inu dog.

Today, it is mainly used as a tipping system on some social media sites, positioning it as the “internet currency”.

More recently, in March 2024, Elon Musk hinted that Dogecoin could be used to buy Tesla cars “at some point”.

Even Litecoin has had an Easter weekend to remember.

This crypto has punched its way to a 9-month high, now trading above the psychological $110 level for the first time since July 2023!

What is Litecoin?

Litecoin is the world’s 22nd-largest cryptocurrency, with a market cap of just over US$ 8 billion, according to CoinGecko.

This peer-to-peer cryptocurrency was created in 2011, as a faster version of Bitcoin and intended to act as a “digital silver” compared to Bitcoin’s “digital gold” status.

Why are Dogecoin, Bitcoin Cash, and Litecoin soaring?

Last month (March 2024):

• BITCOINC skyrocketed 125.8%
• DOGECOIN soared 83.7%
• LITECOIN climbed 31.2%

1) Futures contracts to begin trading in April 2024

The derivatives arm of US-based crypto exchange, Coinbase, has obtained approval from the Commodity Futures Trading Commission (CFTC) to launch futures contracts for Dogecoin, Bitcoin Cash, and Litecoin.

And those futures contracts are set to begin trading this month!

Note from the charts above, how this piece of news in March helped awaken Dogecoin, Bitcoin Cash, and Litecoin prices from their respective slumbers in the months prior.

Furthermore, these cryptos may have also been jolted by the revived excitement and mania surrounding memecoins and altcoins.

How could the futures contracts impact the underlying crypto’s prices?

Having a futures contract go live could boost the underlying cryptocurrency’s prices.

Here’s how Bitcoin and Ether prices fared when their respective futures contracts went live:

• Bitcoin prices rose 45.5% in December 2017, the month when Bitcoin futures first started trading.

  That added to the gains already garnered in the prior months (51.4% in November 2017, and 52.9% in October 2017).

• Ether prices rose over 9% in February 2021, the month when Ether futures first started trading.

  Ether then went on to climb even higher in the ensuing months: up 37% in March 2021 and up another 42.5% in April 2021.

In short, the rollout of futures contracts has historically proven to be a price booster for the underlying crypto.

And this could be due to a variety of reasons, such as:

• increased demand for the underlying cryptocurrency for arbitrage/hedging purposes by institutional investors
• increased liquidity, legitimacy, and transparency stemming from CFTC’s approval, ultimately boosting the appeal for these cryptocurrencies

But wait, there’s more …

2) Bitcoin “halving” could push wider crypto prices even higher!

Of course, the much-anticipated Bitcoin “halving”, which happens once every 4 years, is due later in April 2024.

A “halving” is when the rewards for mining new Bitcoins are halved, which in turn reduces incoming new supply.

And if demand for Bitcoin holds up post-halving, coupled with lessened supply, such dynamics tends to push prices higher.

Note also the positive correlation between Bitcoin and Dogecoin, Bitcoin Cash, and Litecoin.

Over any 5-day rolling period over the past 5 years, these cryptos have moved in the same direction as Bitcoin:

• Dogecoin: 90% of the time
• Bitcoin Cash: 54% of the time
• Litecoin: 48% of the time

That means, when Bitcoin prices go, these 3 cryptos tend to follow, and vice versa.

IMPORTANT: Cryptocurrencies are volatile!

Note how the 14-day relative strength index (RSI – a popular technical indicator) of the 3 highlighted cryptos are close to the 70 mark which denotes “overbought” conditions.

This suggests that a technical pullback is likely due over the immediate term!

Still, it’s these heightened volatility (wild price swings) where traders find the greater opportunities.

Using Crypto CFDs, traders stand to potentially profit in both environments, whether prices are rising or falling.

Overall, if these futures contracts, as well as the Bitcoin halving”, have the expected impact on crypto prices …

this should lead to further gains for Dogecoin, Bitcoin Cash, and Litecoin!

Of course, if the ongoing meme-mania persists, buffered by risk-on sentiment, that should lend a helping hand for these crypto bulls.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By ForexTime 

• Solana skyrocketed by as much as 1155% this year
• Technical pullback warranted after such eye-watering gains
• This crypto still holds year-to-date gains of about 950% despite recent drop
• Solana likely surged as crypto sector recovers from FTX/SBF saga, amid Bitcoin ETF hype
• Further declines may hark back to key support levels from Q1 2022, before potentially pushing back higher

Of the 11 cryptocurrency CFDs offered within the FXTM universe, this year’s standout performer is clearly Solana!

Solana is a blockchain, featuring its SOL payment token, that’s touted for its high speeds (can process a lot more transactions per second) and low fees, which enables the creation of decentralized applications.

At the time of writing, and with only a handful of trading days left in 2023 …

Solana has a year-to-date climb of 952%!

Its year-to-date advance had reached as high as 1,155% earlier this week, before undergoing a technical pullback in recent sessions.

Solana’s 14-day relative strength index (RSI) is now on course to dip back below the 70 threshold which marks “overbought” conditions.

Why has Solana surged this year?

There are a few major reasons being bandied about for Solana’s stunning rise in 2023:

1) Solana moving on post-SBF/FTX

The disgraced founder of the FTX exchange, Sam Bankman-Fried a.k.a. SBF, had previously publicly advocated the merits of the Solana blockchain.

Hence, markets had associated Solana with SBF.

When SBF and FTX fell hard in 2022, so too did Solana, with the crypto losing almost all (94.1%) of its value last year.

But as the crypto world took strides in moving beyond the FTX carnage, so too has Solana’s fortunes recovered.

2) Alt-coins resurgence

Besides Solana, other alt-coins have also have a year of recovery.

The likes of Avalanche, Chainlink, and Cardano also respectively posted triple-digit year-to-date gains!

Cryptocurrencies, overall, are enjoying a resurgence, thanks to the rising anticipation surrounding a first-ever Bitcoin exchange-traded fund (ETF) that could be approved by the US Securities and Exchange Commission (SEC) as soon as January 10th, 2024.

Such excitement surrounding that first-ever Bitcoin ETF has spilled over into the broader crypto universe, and helped push prices higher.

3) Fed pivot in 2024 encouraging risk appetite

Looking at the Solana chart above, its steepest ascent appear to have commenced after the Federal Reserve’s (US central bank) latest policy meeting in mid-December.

Fed officials forecasted several rate cuts in 2024!

Riskier assets, including stocks and even cryptos, have rejoiced at the prospects of the US central bank lowering its benchmark rates, with the first rate cut expected to occur in March.

After all, lower interest rates have the potential to boost liquidity across global financial markets.

And as we know …

Market liquidity is a core pillar for crypto prices to move higher.

Hence, in light of the market’s forward-looking nature (today’s prices reflect tomorrow’s expectations), existing market participants have pushed crypto prices higher recently, in tandem with other riskier assets including the SPX500_m and the NQ100_m indices, on hopes for improved market conditions in 2024.

Though to be clear, liquidity within crypto markets are still yet to recover to levels prior to the crypto winter of 2022.

Where to next for Solana prices?

At the time of writing, Solana appears to be currently testing support around the $105 region.

Just this past Tuesday, Solana had already bounced off the psychologically-important $100 mark in a rather violent Boxing Day session.

Should the $100 fail at the second time of asking, traders may have to hark back to price action from Q1 2022 to draw further lines of support.

If the ongoing pullback is extended further …

Solana may eventually see stronger support around the psychologically-important $80 region.

However, once the ongoing technical pullback has run its course and the froth has been cleared from its eye-watering surge this year, the eventual equilibrium price may form a stronger base from which Solana can move higher.

Further gains for Solana however may require that the appetite for cryptos can make a sustainable comeback, especially if the positive inflows into that Bitcoin ETF does materialise.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By George Prior

Bitcoin topping $40,000 is because – not despite – the recent scandals are clearing out the bad actors from the market, says the CEO of one of the world’s largest independent financial advisory, asset management and fintech organizations.

deVere Group’s CEO Nigel Green is speaking out as the world’s biggest cryptocurrency hit as high as $41,700 on Monday, its highest since April 2022.

Last month, Changpeng Zhao, better known as CZ, the founder of Binance, the largest cryptocurrency exchange in the world, pleaded guilty to money laundering violations and agreed to pay a $50 million fine and step down from his role as the company’s chief executive.

The company itself also pleaded guilty and agreed to pay $4.3 billion in fines and restitution to the government, according to federal authorities.

Nigel Green comments: “The CZ/Binance scandal and the FTX collapse which resulted in a month-long trial which convicted the FTX founder Sam Bankman-Fried of seven counts of fraud and conspiracy, triggered some short-term volatility, but the crypto market has continued to remain bullish.

“In fact, Bitcoin is up by over 150% so far this year.

“It appears that law enforcement and regulatory authorities worldwide are cracking down on executives and companies of digital currencies. This greater regulatory scrutiny is seemingly appealing to investors who are piling into the likes of Bitcoin.

“It would also be attractive to institutional investors who bring with them huge amounts of capital.”

Microstrategy, the software developer and the largest corporate holder of Bitcoin boosted its holdings recently, buying some 16,130 BTC, worth around $610 million at current prices.

BlackRock, the $9trillion asset manager, alongside WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise and Valkyrie Digital Assets, have published Bitcoin ETF applications waiting to be approved by the US Securities and Exchange Commission, the SEC.

“We believe that Bitcoin ETFs are an imminent inevitability, and this would help drive crypto prices and mass adoption,” says the deVere CEO.

“Should SEC approval happen, it would be a landmark moment for Bitcoin.  The approval by the financial regulator of the world’s largest economy of this spot ETF would show that Bitcoin is, without any question, part of the global mainstream financial system.”

Spot ETFs invest directly in underlying assets, typically stocks or bonds, at the current market price (spot price). They aim to replicate the performance of a specific index or asset class by holding a portfolio of the actual securities that make up the index.

“In addition, expectations the Federal Reserve and other major central banks are done hiking interest rates are fuelling Bitcoin prices,” he adds.

Also in the mind of investors is next year’s Bitcoin halving event. One of the key features of Bitcoin’s monetary policy is its limited supply. The total number of Bitcoins that can ever exist is capped at 21 million coins.

Its issuance is also predictable. Through a process called mining, new Bitcoins are created and added to the circulating supply.

However, the rate of issuance is programmed to decrease over time. Initially, miners were rewarded with 50 Bitcoins for each block they successfully mined. This reward is halved approximately every four years in an event known as the ‘halving.’

“The next halving is expected in April 2024.  The lead-up has typically been the most profitable time for crypto investors.”

Nigel Green concludes: “Scandal-triggered crackdowns, expected central bank plans, and next year’s halving event are fueling Bitcoin prices. We expect this trend to continue for the rest of this year and into 2024.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.