CRYPTO CURRENCY NEWS:
There is still potential for the price of bitcoin (BTC) to rise before the top of the market cycle, analysts at crypto exchange Kraken said. Meanwhile, ethereum (ETH) has recently seen a strong performance, but is to face tougher competition going forward, they warned.
Commenting on the historical performance of bitcoin in November, Kraken said that it is the best performing month on average, with a 53% average return. However, the report also warned that volatility in either direction should be expected, with November on average being “materially more volatile” than other months.
Broadening the scope to the entire fourth quarter, Kraken said that the last quarter of the year is typically “a favourable quarter for BTC,” returning on average 119%.
However, the underlying data also showed that there are large differences between the best fourth quarters on record and the worst ones. For instance, the fourth quarter of 2018 saw a crash of 44%, while the best fourth quarter on record, the fourth quarter of 2010, saw a spectacular return of 385%.
Bollinger band (+/-4.5 standard deviations) and 1-month RSI for insight,” the report said, referring to the Relative Strength Index.
It added: “Historically, BTC’s cycle tops have coincided with BTC hitting both its upper Bollinger band AND the 1-month Relative Strength Index (RSI) hitting a reading of 96.”
And although the report noted that the monthly RSI is already in ‘overbought’ territory for bitcoin, it also said that history suggests there is still “potential for technical upside.”
According to the report’s data, the Bollinger band sat at USD 112,000, while the RSI hit 71.7, with a reading above 70 usually considered ‘overbought’.
Further, Reyes also pointed to speculations that ethereum could soon have a futures-backed exchange-traded fund (ETF) in the US.
Also more positive on the outlook for ETH than Kraken’s latest report was Mikkel Morch, Executive Director & Risk Management at crypto hedge fund ARK36, who said that ETH is well positioned for further gains now that more institutional investors are entering the digital asset space.
“First, as institutional investors are entering the digital asset market more decisively, they will be looking to diversify their portfolios and invest in assets beyond bitcoin. Ethereum, the second-largest cryptocurrency by market cap, and one with a robust community and a lively ecosystem, seems to be their natural second choice,” Morch said.
At 16: 57 UTC, BTC trades at USD 61,123 and is almost unchanged in a day and a week, while ETH trades at USD 4,495 and is unchanged in a day, while it’s up by almost 5% in a week.
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