Kategorie: Crypto Analysis

• US inflation remains well above the Fed’s target
• The disinflationary momentum continues  
• US dollar buyers are likely to emerge as more rate hikes are likely 

Last week, the Federal Reserve of the United States signaled its willingness to pause the rate hiking cycle. It said that the committee would remain data dependent. 

Well, data shows that the Fed is likely to keep raising rates. Yesterday, the US inflation report for April was released. 

While the annualized inflation keeps decreasing, it remains well above the Fed’s target. Coupled with the resilient jobs market, it gives the Fed the green light for more tightening. 

Bitcoin followed a similar path to fiat currencies. The US dollar is up and trending higher, as seen by the AUD/USD exchange rate unable to keep above 0.68 and down now about 100 pips points. 

But for Bitcoin, the bearishness appears to be more accentuated. A head and shoulders pattern indicates a drop to $24k, should the US dollar’s momentum continue. 

Bitcoin chart by TradingView

Technical analysis favors a drop to $24k

Bitcoin failed at 30k after a strong rally in 2023. One can spot a bearish technical pattern – a head and shoulders. 

The measured move, seen in blue, points to a drop to $24k, an area that offered resistance in the past. Therefore, according to the interchangeability principle, it should offer support the first time it will be retested. 

Bitcoin followed the US dollar, and the events in the traditional financial markets influenced how Bitcoin moved. Yesterday’s inflation report shows that the Fed will likely continue to raise interest rates, so the downside is the path of least resistance for Bitcoin. 

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• Coinbase reported strong results for its first financial quarter last week.
• HCW analyst Mike Colonnese now sees upside in “COIN” to $77.
• Coinbase stock is already up about 85% versus the start of the year.

Coinbase Global Inc is trading up this morning after an H.C. Wainwright analyst raised his price objective on the largest U.S. based crypto exchange.

Coinbase stock has upside to $77

Mike Colonnese now sees upside in the Coinbase stock to $77 that suggests it could climb another 25% from here.

The bullish call arrives only days after the crypto company reported solid results for its first financial quarter. What thrilled this analyst in particular was improvement in terms of the retail take rate.

Coinbase increased spreads to drive over a 13-bps sequential increase in blended average retail take rate to 1.68%. So, we view its pricing power as very encouraging.

Colonnese is bullish on Coinbase Prime as well that saw record volumes in the first quarter. Shares of Coinbase Global Inc are already up 85% for the year at writing.

Coinbase shares have positive risk-reward

The H.C. Wainwright analyst now expects the Nasdaq-listed firm to generate $3.04 billion in revenue this year.

Earlier this year, Coinbase received a “Wells Notice” from the U.S. Securities and Exchange Commission. But Colonnese remains constructive based on what executives said on the earnings call.

Management said the company is 100% committed to U.S. and is optimistic on U.S. getting crypto regulation right, citing strong bipartisan support to introduce new legislation.

All in all, he sees positive risk-reward in the Coinbase stock especially considering the ongoing recovery in crypto prices at large and the international exchange this company launched earlier this month in Bermuda.

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• AltSignals’ token sale has already raised $723k or 67% of the initial target.

• The success is mostly because of the artificial intelligence hype in the industry.

The artificial intelligence (AI) hype continued this week as more companies announced their plans about the industry. For example, Palantir stock price surged after the company announced strong earnings and demand for its AI products. 

At the same time, IBM decided to relaunch Watson as an AI development studio. WatsonX will be a platform that will help companies launch their AI projects. IBM will offer the service as well as consultations on the same. 

AltSignals token sale continues

Analysts believe that artificial intelligence is the most disruptive technology in modern era. Some analysts see it as the iPhone moment that disrupted the mobility industry forever. That’s because AI will disrupt specific industries like health, education, and even journalism. For example, doctors are now using AI models to diagnose diseases while journalists are using AI to write content.

The ongoing AI hype explains why the AltSignals token sale is going on so well. The developers have already raised $723k from investors from around the world. This means that the developers are approaching the 70% mark since the first phase seeks to raise $1 million.

An ASI token is going for just $0.015, making it highly affordable to most people. Like in other token sales, the developers are expected to hike the price in the next stage of the sale. 

What is AltSignals?

For starters, AltSignals is a company that has been in existence for a while. It is a profitable company that provides trading signals for traders in the forex and cryptocurrency industry. These signals, which are highly accurate, are sent to thousands of traders every day. They are developed using technical indicators like moving averages and the Relative Strength Index.

As part of its growth, the developers have announced plans to leverage artificial intelligence in its process. This AI will leverage other technologies like natural language processing, machine learning, regression, and predictive modeling among others.

In addition to trading signals, the AI layer of the network will have more features including an AI members club, trading tournaments, and community governance among others.

According to its white paper, the second quarter will have several events in the ecosystem. The most important one will be the token launch and listing it on Uniswap and other exchanges. The developers will also expand the team, secure OTC partnerships, and introduce the sentiment analysis engine. 

AltSignals (ASI) price prediction

It is hard to make a precise ASI price prediction since the token is yet to be launched in exchanges. However, judging by history, there are several reasons why the AltSignals price will rise after being listed. First, in most periods, tokens tend to rally after being listed in exchanges. This happens mostly because of the overall hype.

Second, AltSignals is in industry that is expected to grow rapidly in the coming years. We have seen this with the success of other AI tokens and companies that are betting on the industry. Further, AltSignal will likely rise ahead of the AI layer launch. 

However, like other cryptocurrencies, ASI will always have its ups and downs. As such, it makes sense to only allocate funds you can easily afford to lose. You can buy the AltSignals ASI token here.

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Key Takeaways

• USDC’s market cap has dipped from $54 billion to $30 billion in the last eight months
• The stablecoin has lost market share since March, falling from 32% to 23%
• Regulatory concerns and the fallout from the SVB collapse have plagued the stablecoin, whose struggles signify the capital flight out of the crypto industry as a whole

Crypto prices have been on the rise over the past couple of months, but that is not to say that all is well in the sector. As I have analysed before, capital has flooded out of the space at a scarcely believable pace, with $22 billion in stablecoins alone leaving exchanges in the last five months. 

USD Coin, the world’s second largest stablecoin, illustrates the struggle well. The Coinbase-backed cryptocurrency held a market cap of $54 billion last August. Today, it is below $30 billion. 

The coin has had its fair share of battles. The first is, well, it is a cryptocurency, and that means it operates in an industry that has been ravaged. Last year’s scandals hurt the space deeply, none more so than FTX’s startling collapse in November. Since the exchange went under, liquidity has poured out of the industry. Plotting USDC’s fall against the total market cap of all stablecoins shows that, while USDC has been worse, the entire sector has been hit.

However, USDC has faced other battles, too. In March, Silicon Valley Bank failed in the US, guilty of mismanaging its risk in the face of rising interest rates, ultimately succumbing to mismatched duration as its bonds sold off fiercely amid the swiftest interest rate hiking cycle in modern times. 

The problem for USDC was that part of its reserves were held in this bank, throwing panic into the market. Later revealed as only 8.25% in SVB, the market went into a flurry, selling off the stablecoin in masse. The peg dipped down to 88 cents. 

While the US administration stepped into guarantee all deposits at SVB a few days later, and the peg hence restored shortly thereafter, the dip in market cap didn’t fully recover. Prior to the SVB collapse, its market share among stablecoins was 32%. Two weeks later, it was 25%. 

Today, the market share sits at 23%, and it continues to fall. 

Regulation tightens on crypto

The other big factor in this is regulation. In February, the SEC announced it was suing Paxos, the issuer of the Binance-branded stablecoin, BUSD, for violating securities laws. The result was no more BUSD, minting of the stablecoin halted and the circulating supply slated to gradually dwindle towards zero. 

On the surface of things, this sounds promising for USDC. The fall of a competitor and more room to suck up extra supply. However, the problem is that USDC’s parent company is Circle, which like Paxos, is also US-domiciled. 

That means a fear that USDC could be next in line to get a knock on the door from SEC. The market has hence looked elsewhere, most notably Tether, which seized extra market share with aplomb, grinning smugly in the cosy confines of Europe, far away from the SEC. The world’s largest stablecoin has advanced to a 61% market share, its highest mark in two years. 

The regulatory fears were exacerbated by parent company Coinbase being issued with a Wells notice, which typically precedes legal action. A Wells notice is a formal warning from the SEC that evidence of proof of lawbreaking has been found. Typically, legal action will follow. The claims surround (you guessed it) a violation of securities laws, and while it is not directly to do with USDC, it has not exactly helped its image in the market, as the market cap continues to head south. 

Whether USDC can wrestle back market share in future remains to be seen. But its plight, and the overall state of stablecoins in crypto, highlight that while prices have recently been on the up, the state of industry is still very much a concern. 

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