The dynamics of the cryptocurrency market are still strongly influenced by the uncertainty factor of the growth prospects of the global economy. These financial assets are fully influenced by the same reasons as other traditional financial instruments - stocks of companies, currencies, and assets of the commodity market.
If the previous markets during the period of soft monetary policy of the World Central Banks, there was a wide interest in cryptocurrencies, the value of which was actively accelerated by speculative sentiments of the market participants due to the lack of volatility in the assets of traditional markets, and recently, investors are clearly reluctant to activate in the current conditions of uncertainty. The global attractiveness of cryptocurrencies, as shown by previous events, was supported not only by speculative interest, but also by the weakness of the US dollar, a decline in interest in gold - assets that do not generate interest income, and wide demand for stocks of companies. But with the beginning of this year, the smooth escalation of the US-China trade confrontation forced investors to "shift" from risky assets, including cryptocurrencies to protective ones, among which the first place was occupied by government bonds of economically developed countries.
However, despite the local decline in widespread interest in these financial instruments, we expect that their active use will continue at present, primarily as instruments for hedging the risks of transactions in traditional assets. For example, one can highlight the importance of buying Bitcoin when hedging deals in stocks of US companies included in the S & P500 broad market index. In the past few months, some similar dynamics of this cryptocurrency and the S & P500 index manifested itself clearly and helped players in US stocks insure their financial risks.
Let's go back to the possible trends in the cryptocurrency market in the near future. In our opinion, the suspended situation in the negotiations between Washington and Beijing on trade, the still remaining strong positions of the US dollar until the Fed's monetary policy meeting this month will restrain investor interest in second-level cryptocurrencies such as Litecoine and Ethereum. We expect continued limited decline to continue, or, at best, until the meeting of the Federal Reserve on consolidation rates near local minimums. Although in the dynamics of Bitcoin, we assume some revival upward due to its attractiveness as a hedging instrument.
Technical picture and trading ideas:
We expect that the Bitcoin / USD pair in the short-term will remain in the range of 9295.50-10900.00 in the wake of expectations of the news from the fields of the trade war between the United States and China, as well as the Fed's final monetary policy decision. We believe that a price reduction below $ 10277.60, the pair will open the way for a local decline to 9295.50.
In our opinion, the Litecoin / USD pair, having failed to increase above the level of 70.50, will be adjusted downward first to 64.00, and then to 61.66. But from a technical point of view, it is necessary to overcome the level of 60.00.
The Ethereum / USD pair also has the potential for a local decline to 164.80 if it falls below 176.35. We believe that, like the two previous cryptocurrency pairs, it will remain in the short-term in the lateral range 164.80-182.50.
