31 December 2020 | ZebPay Trade-Desk
The Bitcoin price gains this month are backed by strong fundamental metrics on the network. The price of Bitcoin hit high’s of $29,244. This took place after Bitcoin’s price broke the $17,000 and then $19,000 levels within the same month. The market capitalization of Bitcoin also hit its all-time high this week at about $400 billion. Analysts remain bullish, and claim that with retail on-ramp platforms becoming more prevalent in 2021, Bitcoin’s price could break $30,000. With more institutional investors entering the Bitcoin market as well as miners not liquidating their positions, it appears likely that price will continue to trend positively over time.
December saw Bitcoin’s price reach new 2020 highs. The trend has been such since the month of October, after PayPal announced support for cryptocurrencies. Bitcoin saw its price increase by ~35%. The second-largest asset by market cap, Ethereum, also saw upward movement, with Ethereum price up ~45%. Much of Ethereum’s rally can be attributed to the launch of Ethereum 2.0, and the anticipation of its success in revolutionizing the Ethereum blockchain. The Securities and Exchange Commission (SEC) announced that it has filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering, leading to a fall in XRP price by ~60% month on month.
In terms of market capitalization, Bitcoin regained its momentum and continues to have a strong outlook. As of now, Bitcoin accounts for ~68% of the total crypto space. If we combine Bitcoin, LiteCoin, Monero, Ethereum, and other significant cryptocurrencies, the total value comes to ~$325 billion, which accounts for ~85% of the total global crypto market which currently stands at ~ $520 billion.
On the Macro front, Bitcoin looks like an increasingly attractive asset to add to portfolios as it is among the few assets (including traditional) whose supply is limited. Covid-related money printing has also added a tailwind to crypto assets, especially Bitcoin. Large Fiat debasement is underway across all economies, adding new flows to Bitcoin. On the performance side, Bitcoin has outperformed key traditional assets for the month of December.
December at ZebPay
It’s been an exciting past month at ZebPay. Along with our daily trade analyses, we explored a range of topics to help our clients better understand the crypto space. In case you missed the action in December, here is everything you need to know about what has happened this month—from launches, to news updates, technical analysis and more.
December Fundamental Snapshot at ZebPay
The ZebPay trade desk also conducted research on broader, fundamental investment topics this month. We looked at how Rupee Cost Averaging (RCA) can help an investor maximise returns, what smart contracts entail, as well as, how an ICO might differ from an IPO. Here is a quick glance of what these reports entailed.
RCA (Rupee Cost Averaging) in BTC and ETH:
RCA is an investment strategy in which an investor divides a certain amount of money to be invested over a certain period of time. This helps to reduce the impact of volatility of the overall purchase, but also helps protect liquidity for the investor. The purchases occur irrespective of the underlying asset’s price, and at regular intervals.
Investing using the RCA strategy, provides a great avenue towards building wealth over a period of time. It helps to mitigate risk, reduce volatility and most importantly preserve liquidity in the hands of investors. Over time, wealth accumulates, and ROI’s see significant improvements. Returns are significant, despite smaller sums of money being invested on a monthly basis. RCA reduces or eliminates the risk that comes with timing the market, averaging is one of the most efficient low risk ways to get exposure to an asset, especially for volatile assets like crypto currencies.
To read our in-depth report on RCA, please click here.
Smart Contracts
A smart contract is a self-enforcing piece of software that is managed by a P2P network of computers. Smart contracts are essentially management tools that provide a coordination and enforcement framework for agreements between network participants, without the need of traditional legal contracts. They can be used to formalize simple agreements between two parties, the bylaws of an organization, or to create tokens.
It can be said that tokenization of digital securities indeed has the potential to transform the future of the finance sector, among others. Yet, to do so, the Blockchain community must be able to come up with efficient solutions to the existing issues which are highly detrimental to the security, as well as, adaptability. As many have pointed out, there might be the need for developing Blockchains, optimized solely to digitize securities using smart contracts.
To read our in-depth report on Smart Contracts, please click here.
ICO vs IPO
In an IPO, an investor receives stocks/shares in exchange of an investment. The Initial Public Offering (IPO) is a well defined and documented process initiated by a private company in order to expand and become publicly traded. It involves some formalities in the duration of the process. IPO refers to the public sale of the shares of a company, with the goal of collecting funds for development.
In the case of an ICO, there are no shares, but instead companies raising funds via ICO provide a blockchain equivalent to that (a cryptocurrency asset). In most cases, investors pay in a popular existing token such as Bitcoin or Ethereum and in return receive ‘n’ number of new tokens in exchange.
To read our in-depth report on ICO’s and IPO’s, click here.
December Technical Analyses
Results
For the first week of December we published technical analysis on 5 coins, namely BTC, ETH, BAT, COMP, USDT/INR. Based on our Analysis we were bullish on 4 coins except for USDT/INR. Consistent with our Analysis BTC, ETH, BAT and COMP rallied.
For the second week, we covered 4 coins; BTC, ETH, BAT and USDT/INR; technical analysis led to a bullish view on ETH, BAT. Our bearish call on BTC failed to materialize for the week with BTC rallying. BAT and ETH along USDT/INR behaved as expected
For the third week, we covered BTC, ETH, BAT, and USDT/INR. Our technical analysis was bullish on all except BAT. All the 4 coins covered that week. With BTC starting to make new highs each day.
For the fourth week we covered BTC, ETH, BAT and USDT/INR and we were bullish on all coins covered except for USDT/INR. BTC and ETH have rallied after a correction to trade near all-time highs , USDT rallied to unchartered territory. BAT is mildly up from last week.
Out of 17 coin specific analysis over the month 13 analysis were strongly consistent with actual moves, market moves were opposite of 4 analysis.
| Coins Covered | Outcome Aligned | Outcome Opposite | Aligned with Miniscule Deviation | |
| Week 1 | 5 | 4 | 1 | 0 |
| Week 2 | 4 | 3 | 1 | 0 |
| Week 3 | 4 | 3 | 1 | 0 |
| Week 4 | 4 | 3 | 1 | 0 |
| Total | 17 | 13 | 4 | 0 |
Weekly Technical Analysis
Cryptos gave a good present to holders for Christmas. The situation is positive and markets have touched all time highs in BTC, Alts are looking good as well, Let’s look at what we have in store for a trade set-up.
Bitcoin (BTC) Technical Analysis and Chart
At the time of writing, Bitcoin is trading around $28,994 reflecting a profit of 3.07% approximately over the period of 24-hours.
BTC has continued its rally after breaching $20,000 level, barring few intra day corrections the rally has been unabated.
On the Technical front, the picture is not as positive as last week, as we have pointed out in our previous reports, after a strong rally RSI becomes an important indicator, on a weekly chart RSI is still is way beyond the overbought levels, unlike last week when it was below overbought levels.
Institutional flows remain strong, yet we tilt on the bearish side in the near term as the start of the new year may bring mild rebalancing. Analysis will be negated if BTC breaches the $30,000 levels convincingly.
Ethereum (ETH) Technical Analysis and Chart
At the time of writing, Ethereum is trading around $741.9 reflecting a profit of 1.39% approximately over the period of 24-hours.
ETH has followed the BTC on stairs and seems to have taken an escalator recently. Trading in $700 levels after a long time
On the technical side, just unlike BTC, the price levels here looks better supported technically, with MACD flashing green both MACD line and histogram front and RSI below overbought levels despite a 20% rally over the past 3 days, telling there’s more fuel left in the rally.
We lean on a bullish front on ETH, with any dips from these levels very good price for accumulation.
Basic Attention Token (BAT) Technical Analysis and Chart
At the time of writing, BAT is trading around $0.1991 reflecting a loss of about 1.49% approximately over the period of 24-hours.
BAT after existing the bearish trend since Aug has been largely sideways, currently trades close to support levels.
The technical front picture has some positives with the MACD line and histogram in positive territory, RSI is getting close to oversold levels. After failing to breach the resistance of $0.25 price remains supported on these levels.
We continue to lean on the bullish side with BAT, with next resistance at around $0.20 levels. On the downside if price falls below $0.18, analysis will be negated.
Monthly Trade Summary Sheet
Monthly Price Analysis
| USD ($) | November | December | Previous Month | Current Month | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $19,625.84 | $28,840.95 | 46.95% | $19,749.26 | $13,243.16 | $28,937.74 | $17,619.53 |
| ETH | $614.84 | $751.62 | 22.25% | $621.17 | $371.31 | $754.30 | $533.00 |
| BAT | $0.23 | $751.62 | 320924.04% | $0.2867 | $0.1748 | $754.3000 | $0.1823 |
| ATOM | $5.55 | $5.44 | -1.98% | $6.460 | $4.220 | $5.800 | $4.240 |
| XRP | $0.66 | $0.21 | -68.11% | $4.8000 | $0.2288 | $0.6792 | $0.1748 |
Monthly Volume Analysis
| Cryptocurrency | 1w – % Vol. Change (Global) |
| Bitcoin (BTC) | 7.20% |
| Ethereum (ETH) | -5.37% |
| Basic Attention Token (BAT) | 319.40% |
| Cosmos (ATOM) | -8.37% |
| Ripple (XRP) | 31.13% |
Monthly Price Pointers
| Resistance 2 | $33,500 | $841 | $0.2550 | $6.70 | $0.2800 |
| Resistance 1 | $30,000 | $782 | $0.2330 | $6.14 | $0.2700 |
| USD | BTC | ETH | BAT | ATOM | XRP |
| Support 1 | $26,880 | $684 | $0.1900 | $5.24 | $0.1500 |
| Support 2 | $24,000 | $635 | $0.1830 | $5.02 | $0.0200 |
Market Updates
- Although DeFi’s market cap has surged by 2,100% over the course of 2020, critics argue that the industry needs to evolve to be on a more sustainable footing.
- Major exchanges scramble to disassociate themselves with XRP as Ripple tries to regain control of the narrative.
- According to AssetDash, Bitcoin is now the 11th-most valuable asset by market cap, with a $500-billion valuation.
- A crypto bank has begun opening physical branches in India through a joint venture between Cashaa and United Multistate co-op society. Customers can open bank accounts, buy and sell cryptocurrencies, obtain crypto-backed loans, as well as learn about crypto.
- The Securities and Exchange Commission announced today that it has filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.
- The crypto mining industry has had a phenomenal record of growth and innovation, over the past decade, but this is just the beginning.
January Outlook
Bullish run has continued for cryptos, especially our favorite inflation hedge BTC in the month of December, which is likely to continue in January as well. We expect strong institutional flow to get even stronger over the near future. With Crypto assets especially BTC not only competing and beating equity but also Gold on the performance front.
Crypto’s mainstream adoption is accelerating with Wall Street banks coming up with research reports on cryptos, especially BTC . With credible fund managers and economists like Druckenmiller ,Tudor Jones, Massmutual, Guggenheim partners, Eric peters ect investing and holding BTC, we expect inflows to continue. Speaking of which at this point balance sheet allocation to BTC has been rewarded by pump in share prices of companies.
Lastly we expect mainstream adoption of cryptos to improve further with Square and Paypal already allowing for BTC payment for purchases, a luxury car dealership in Nevada (Vegas Auto Gallery) has started accepting BTC payments for luxury cars. January is looking bright for cryptos.
Conclusion
This concludes our ZebPay December Monthly Analysis report. The report aims to provide its readers with some insight into what the month has been like for us at ZebPay, and dive into some outcome as a future approach on what we expect to happen next. The trade desk has put together a snapshot for our investors to understand both the fundamental and technical analysis for better trading and investment decisions, coupled with some market updates and key events that readers can refer to to get a glimpse of the key developments taking place in the crypto world and how this is shaping markets.
Happy Trading with ZebPay!
References:
*Sources of charts: https://cryptowat.ch
Disclaimer:
This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum etc.are very speculative and are subject to market risks. The analysis by Author is for informational purposes only and should not be treated as investment advice.
