CryptoCurrency Market Outlook October 2017

Headwinds And Catalysts

The cryptocurrency market has recovered from a recent correction. This correction was driven, caused rather, by China’s decision to ban ICO’s and rumors it would ban all cryptocurrency trading. The correction deepened as rumor after rumor surfaced in the market finally reaching an extreme just prior to confirmation of the news. In retrospect, and hindsight is always 20/20, it was a classic sell the rumor/buy the news event but now that it’s over what comes next?

The crypto currency market has largely recovered and is trading at levels seen just prior to China’s announcement last month. It may just be me but I suspect a bit of manipulation on China’s part as they induced their people to sell all digital tokens when they were all trading at all time highs. Regardless, with the market trading at these levels it can begin to move up off of what was already firm support and has now been tested and tested again.

Looking forward there some hurdles that, when crossed, could turn out to be the catalysts to drive the market higher. For starters Bitcoin is expected to implement the second of two hardforks as part of its Segwit upgrade. The first resulted in the formation of Bitcoin Cash, this the second is not expected to do the same but it is expected to help increase the number of transactions BTC can handle per second. This will speed up the blockchain and make the coin more valuable. Likewise Ethereum is expected to launch the Byzantium upgrade soon. This is the first of two parts of the Metropolis hard fork expected to be completed later this year. This too will increase ETH’s security and speed, making it a more valuable token as well.

Other coins expecting major catalysts are Litecoin, Omisego and the Basic Attention Token. Litecoin is expecting a hard fork to enhance its functionality while Omisego and BAT are both expecting the launch of platforms they are intended to service. Omisego is a payment platform aimed at the greater Asian economic arena and the largest ICO to date, it is expected to launch sometime this quarter. BAT is meant to power the Brave browser, an identity protecting browser that pays users to watch ads. It is also expecting to see the launch and roll out of its features over the next few months.

Bitcoin And Ethereum Analysis

Bitcoin is consolidating above $4000 after testing support at $3200 and then retesting at $4000. The coin is poised to move up and retest resistance at the all time high, near $4800, but must first cross above near term resistance at $4400. The indicators are showing some weakness but with prices holding at near term highs is more consistent with consolidation before continuation than it is with reversal. A break above $4400 will be bullish and very likely carry the token up to $4800 very quickly. A break above $4800 would break it out of a trading range and confirm continuation of long term uptrends.

ETH is consolidating at strong support levels and above the up trend line consistent with levels seen prior to the China driven sell off. The coin is confirming support with price action and stochastic RSI which has fired a bullish crossover in today’s action. A move up from this level will be bullish and trend following but face resistance at near and short term targets. These are $320, $360 and near the all time high around $400.