SEC Filing Against Ripple Doesn't Affect Rest of Crypto World Negatively – Price Analysis, 28 Dec 2020
Last week the US Securities and Exchange Commission (SEC) accused Ripple of selling unregistered securities. On December 22, SEC filed a lawsuit against Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen:
According to the agency, for seven years, the company had sold unregistered securities to retail investors in the form of XRP tokens and raised $1.3 billion during this period.
In response to the SEC decision, Brag Garlinghouse compared the lawsuit against Ripple with an attack on the cryptocurrency world:
Because of this event, the price of XRP has sunk from $0.70 to less than $0.30. However, the situation with Ripple didn't affect the rest of the cryptocurrencies negatively. For example, last week, the price of Bitcoin registered a new all-time high – BTC/USD smashed the psychological levels of $25,000, $26,000, $27,000, and $28,000. The market cap of Bitcoin has been even able to surpass $500 billion.
The current BTC rally is sustainable because it is supported by retail investors and not institutional ones, according to Hashcash inventor Adam Back:
After the exceptionally positive past week for Bitcoin, the crypto market starts the current week with some mixed price movements. At the time of writing, according to Coin360.com, one Bitcoin costs €21,797.89 (-3.17%), one Ethereum – €597.14 (+14.61%), and one LINK – €10.23 (+16.64%):
Source: Coin360.com (Daily crypto market performance)
Now let's analyze the price charts of the leading cryptocurrencies against the euro.
Recently some people started claiming that the price of Bitcoin will undergo deep correction very soon because of the already significant increase.
However, if we have a look at the price chart of BTC/EUR, we can see that Bitcoin continues to draw solid bullish candlestick with ascending local lows and ascending local highs – a clear bullish signal:
Moreover, if we compare the current market situation with the local highs from December 2017 and June 2019, we can conclude that the circumstances are very different. These local highs formed after candlesticks with tall upper shadows – an indicator for substantial price resistance. The current monthly candlestick has a very small upper shadow – an indicator for almost absent price resistance.
Please note that there are a few more days until the end of the month, and the current monthly candlestick may change.
In the 4-hour chart (4H), ETH/EUR managed to exit the Ascending Triangle:
According to the technical analysis theory, an Ascending Triangle is a typical trend continuation pattern. Hence, it seems that ETH/EUR has been able to renew the uptrend.
With this in place, we think that ETH/EUR will try to reach the level of the local high from May 2018 or approximately €694 per one digital coin:
In the daily chart (1D), a breakdown took place, and LINK/EUR has exited the Ascending channel (uptrend) in the downward direction:
Therefore, LINK/EUR has formed a Falling Wedge in the 1-hour chart (1H):
For the price chart to return to the Ascending channel, it needs first to overcome the resistance from the upper line of the Falling Wedge.
In our estimation, as long as LINK/EUR remains within the trajectory of the wedge, opening a long position is quite risky.
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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.