Analyses

Demand for safe haven assets increases – BTC, ETH, LTC price analysis, 27 Jan, 2020

On Thursday, January 23, the European Central Bank (ECB) published its monetary policy decision. The ECB reaffirmed that it will continue to inject liquidity at a monthly pace of €20 billion into the financial system of the euro area:

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Source: ecb.europa.eu

The continuation of the expansionary monetary policy has increased the demand for safe haven assets such as gold. That's why the exchange rate of gold (XAU) to euro (EUR) has hit a new all-time high at a level of €1,435.65 per troy ounce:

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Source: goldprice.org

Taking advantage of ultra-loose monetary policy and increasing demand for safe haven assets, Tether announced the addition of a new product called Tether Gold (XAUT) – a stablecoin pegged to the price of gold:

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Source: Twitter

The crypto community welcomed the launch of XAUT, because such an event may attract traditional gold investors to the crypto world.

The last few days have been positive not only for the gold market, but for the crypto market as well. Many investors consider the major cryptocurrencies as a safe haven asset class. That's why the crypto market starts the week on a positive foot. At the time of writing, one Bitcoin costs $8,641.69 (+3.53%), one Ethereum – $167.10 (+3.97%), and one Litecoin – $56.07 (+4.25%):

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Daily crypto market performance. Source: Coin360.com

BTC/USD

On the 6-hour chart (6H), the price of Bitcoin is trying to resume the upward movement:

 0bd55442da7d5d9e5f89d0c037052cdb.jpg

We expect BTC/USD to continue to fluctuate within the «ascending channel» in the next few days and to reach the «resistance zone» subsequently. The first price target is the lower line of the «resistance zone» ($9,088.20) and the second price target is the upper line of the resistance zone ($9,670.70).

ETH/USD

On the 12-hour chart (12H), the price of Ethereum has remained at almost the same level since last Monday. ETH/USD continues to test the upper line (resistance line) of the «descending channel»:

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If the bulls can push the price above the upper line (bullish scenario), a rally to the level of the previous local high (H1) or $195.21 is possible.

However, if the bears defend the resistance line and regain control over the market (bearish scenario) then we may witness a price decline to the level of the last local low or approximately $120.35.

We still think that at the moment there is neither a clear bullish signal nor a clear bearish signal.

LTC/USD

In the 12-hour (12H) tame frame, the price of Litecoin has been hovering below the lower line of the resistance zone for the last few days:

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Currently, LTC/USD is attempting to cross the lower level ($56.50) of the resistance zone. A move above $56.50 is likely to trigger a bull run during which the buyers may carry the price to the upper level of the resistance zone or $66.75. 

We think that this is the most likely scenario for LTC. However, as mentioned in our previous analysis we believe that the price direction of Litecoin will heavily depend on the price direction of Bitcoin throughout the week.

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The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Bitvalex's content as such. Bitvalex does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.


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