Bitcoin price may have taken a temporary breather, but the sharp correction below $ 30,000 did little to discourage the bullish sentiment of crypto market participants.
The CME Bitcoin futures market hit a record volume of $ 2.7 billion on January 4 and LMAX Digital also hit a record high of $ 2.62 billion in traded volume on the same day. This massive increase in trading activity suggests that institutional investors are continuing to invest in Bitcoin (BTC).
Due to institutional adoption, analysts believe that Bitcoin could soar to $ 100,000 by 2021. However, JPMorgan Chase analysts led by Nikolaos Panigirtzoglou take a slightly different view, believing that Bitcoin’s volatility should converge with that of gold to result in a “crowding out of gold”. Until then, the analysts don’t expect Bitcoin to rise above $ 146,000 this year.
Even if Bitcoin is taking a breather from its recent upward trend, there are a few tokens that have continued their upward movement unabated. Let’s take a look at the possible fundamental reasons behind their rally and establish the technical levels to look out for.
LRC / USD
The price of Ether has skyrocketed in recent days, as has activity on the Ethereum network. This has stimulated gas charges on the network by a huge margin. While the higher fees may not bother the wealthy, the smaller traders will likely find it difficult to execute lower value trades.
To save on skyrocketing gas costs, traders seem to have Loorpring (LRC) on board, which saw stimulated trading volume on the decentralized exchange, and data from Dune Analytics shows the figure is up to $ 5.49 million.
It is only recently that Loopring Exchange v2 was launched based on Loopring Protocol 3.6, and is considering. the current market-wide rally and the rise in ETH gas fees, it couldn’t have come at a better time.
The team also plans launch AMM liquidity mining and a few other programs on January 7 to drive the adoption of zkRollup layer-2 scalability and increase liquidity. Loopring estimates that the annualized returns of the first three SMP pools can be as high as 40%.
If trading activity remains high, the congestion of the Ethereum network may not decrease quickly and that could work in Loopring’s favor. Let’s see how his token has responded to this positive fundamental development.
The LRC price shot up from $ 0.175 on Jan. 3 to an intraday high of $ 0.585 today, up 234% within three days. This rise has pushed the RSI deep into overbought territory, indicating an increased risk of a minor downturn or consolidation.
The LRC / USD pair is currently facing a small resistance, near the 200% Fibonacci expansion level at USD 0.58952.
However, if the bulls continue to buy and push the price above USD 0.509, the rally could extend to the 261.8% expansion level at USD 0.73617 and then the 300% expansion level at USD 0.82681.
With a strong uptrend, the corrections are sharp and short-lived. The first down side is the 38.2% Fibonacci retracement level from the most recent leg of the upward move at $ 0.42838.
A strong recovery from this level will indicate that traders are buying aggressively on dips without waiting for a deeper correction, and this could increase the prospects for a resumption of the uptrend.
This bullish momentum may weaken if the pair moves below the 50% retracement level at $ 0.38.
HEGIC / USD
In a trending market, traders can sense an opportunity to gain excess returns by using leverage. While futures can be an attractive proposition, it is also risky because an increase in volatility or a sharp turnaround can lead to large losses if timely steps are not taken to straighten or adjust the position.
In such times when the market is in a crack, traders prefer options because they have limited risk but great profit potential due to leverage.
Apart from that, several experienced traders also use options to hedge their futures positions or their spot purchases when they are in large quantities. This appears to have been beneficial to Hegic’s trade protocol (HEGIC), which was trading Listing options volumes on January 3.
Token owners who don’t want to trade options can take advantage of providing liquidity to one of the pools on Hegic and earn rewards.
HEGIC rebounded today from an intraday low of $ 0.0751 to an intraday high of $ 0.25, up 232% in just over a week. The sharp recovery from recent lows points to aggressive buys by the bulls.
If the bulls can keep the price above USD 0.24, it will complete a V bottom with a pattern target of USD 0.4049.
However, if the bulls fail to hold the HEGIC / USD pair above USD 0.24, a decline to USD 0.18 is possible. If the price rises from this level, the bulls will try to resume the uptrend again. If they succeed, the couple can form an inverted head and shoulders pattern, which will be a positive sign.
This optimistic view will be voided if the pair stalls and dips below USD 0.16. Such a move could keep the couple range-bound for a few days.
FTT / USD
It’s not just the crypto markets that have seen a strong bull run, even the US stock markets have rallied in 2020. Thus, an exchange that offers its clients varied trading products is likely to benefit.
Currently, FTX exchange offers thematic products such as derivative contracts in the US presidential election, pre-IPO contracts for Airbnb and Coinbase, tokenized shares of cannabis-focused companies, and the recent addition was the spot and futures Products offered by Grayscale Bitcoin Trust, Grayscale Ethereum Trust, and Bitwise Index. Such a wide range of trading products in different asset classes may have attracted different traders.
Additionally, a recent partnership between FTX and Capitalise.ai that allows clients to automate their trading with freestyle text is probably a positive as many traders like to use mechanical trading systems to remove sentiment quotient from trading. Backed by these positives, let’s take a look at how FTX Token (FTT) performed.
FTT is up from an intraday low of $ 4,552 on December 23 to an intraday high of $ 8,112 today, gaining 78% in a short space of time. The long tails on the January 4 and today candlesticks show that bears tried to reverse the rally, but the bulls aggressively bought the dips.
However, the sharp rise in recent days has pushed RSI deep into overbought territory. This suggests that the FTT / USD pair could be ripe for a consolidation or a minor correction.
On the other hand, the bulls can try to defend $ 7 and then the 20-day Exponential Moving Average ($ 5.83). If the pair bounces off either of the supports, it would suggest sentiment remains positive and the bulls are buying on dips.
On the upside, the bulls are likely to face a severe hurdle at the psychological resistance near USD 10, but if the level is crossed the next stop could be at USD 12.
This optimistic view becomes invalid if the price goes down and falls below the 20-day EMA. Such a move suggests aggressive earnings posting by the traders and a lack of buy support at lower levels.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trade move carries risks, you should do your own research when making a decision.