PayPal's Decision to Enter Crypto Market Spurs Enthusiasm – Price Analysis, 26 Oct 2020
Last week PayPal, which has over 300 million users worldwide, decided to enter the cryptocurrency market. On October 21st, the company announced that it would integrate cryptocurrency into its digital wallet and allow customers to buy, sell and hold Bitcoin, Bitcoin Cash, Ethereum, and Litecoin:
Immediately, the cryptocurrency market reacted positively. The prices of the four cryptocurrencies that PayPal is going to support went up by between 15% and 25%. The price increases triggered a lot of positive vibes among crypto enthusiasts. For example, Hashcash inventor Adam Back applauded the $1K intraday move of Bitcoin:
Well-known Bitcoin investor and former Goldman Sachs banker Michael Novogratz said in an interview on CNBC that after PayPal, it is now time for Visa and MasterCard to join the crypto market. In a podcast on 'What Bitcoin Did' Gemini co-founders Cameron and Tyler Winklevoss outlined that now the question is not "if Bitcoin will reach $500,000, but how fast it will happen".
After a very positive week for the market, now the major cryptocurrencies are consolidating. At the time of writing, according to Coin360.com, one Bitcoin costs €11,031.59 (+1.45%), one Ethereum – €342.85 (-0.29%), one Litecoin – €48.98 (+1.95%), and one LINK – €10.22 (-1.45%):
Source: Coin360.com (Daily crypto market performance)
Now let us analyze the price charts of the top cryptocurrencies against the euro.
In the weekly chart (1W), BTC/EUR has formed a bullish candlestick that has a closing price above the level of the closing prices of the candlesticks in the local high from 2019:
From a technical perspective, this is a very positive signal indicating that the bulls are gaining traction.
That is why we think that BTC/EUR will continue to move upward within the trajectory of the Rising Wedge in the daily chart (1D):
We view the lower line of the wedge as solid support and the upper line as significant resistance. Hence, the current support level is at approximately €9,800, and the current resistance level – at €12,000.
In the 4-hour chart (4H), ETH/EUR has formed an Ascending channel (uptrend):
As can be seen from the chart, right now, ETH/EUR is consolidating at the level of the first local high in the Inverted Ascending Triangle or approximately €340.
We estimate that when the consolidation ends, ETH/EUR will increase up to the level of the next local high in the Inverted Ascending Triangle or approximately €375.
We consider the lower line of the Ascending channel as a solid support level for the price of Ethereum.
In the 4-hour time frame, after the exit from the Bullish Flag, LINK/EUR continues to move within the newly formed Ascending channel (uptrend):
Because of the high correlation among the prices of the major cryptocurrencies, in our estimation, LINK/EUR will remain in the uptrend at least in the next couple of weeks. Therefore, the closest support is at approximately €8.60 and the closest price target – at €11.20.
Last week Litecoin was able to make a very interesting move. LTC/EUR formed a solid Bullish Engulfing in the weekly chart (1W):
As can be seen in the chart, because of the recent substantial price increase, now LTC/EUR is challenging the resistance line. If a breakout happens, then a new uptrend may start, and that may finally put an end to Litecoin's price lethargy.
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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.