By Jeffrey Gogo
Major cryptocurrency prices rose sharply over the past five weeks, paring losses for the first quarter, amid a slew of developments in the crypto world that could be viewed as both foe and friend to digital money.
But, largely, the market is driven by sentiment.
Bitcoin climbed nearly 30 percent on global markets to $9,084 as at May 9, from $7 000 at the beginning of April, according to data from coinmarketcap.com, pushing its total market value by $36 billion to $154 billion.
The coin tested resistance at $10 000 early May, but has found support at current levels. If Bitcoin falls below support that may be a sign of bears setting in.
The currency could drop to as low as $8 500 if that happens, say analysts. And should it break resistance, the bulls will take over, with a short term price increase of 20 percent guided.
Bitcoin, the benchmark cryptocurrency, has slumped below $6 000 this year, and is down from its December peak of $20 000, as markets have been rattled by hacks and regulatory clampdowns.
The currency lost about 50 percent during the first three months of 2018.
Here, prices have followed a similar trendline, the swings and the crashes, but lately the ascending line.
At Golix, Zimbabwe’s biggest virtual currency exchange, sellers of Bitcoin are looking for between $13 999 and $14 650, up more than 55 percent from five weeks earlier. Buyers are bidding $300 to $1 000 below the asking price.
Bitcoin faced resistance after testing $15 000 on May 5 on the Harare based trading platform, but found support at around $13, 000. The critical support level looks set at $12,500 based on the moving averages of the past ten days. A break below support could signal bears.
Overall, about 1.4 Bitcoin (BTC) had been traded on Golix in the 24-hours to May 9, and 44 BTC or about $615 000 Bitcoin’s worth, over the past 30 days.
Worldwide, it is Bitcoin Cash, basically a clone that split from Bitcoin last year, that has reported one of the most remarkable recoveries in recent weeks.
The currency rallied more than 220 percent at some point between April 1 and now, more than doubling its total market capitalisation to $25 billion, but profit taking has cut back growth to140 percent in the last few days.
Bitcoin Cash (BCH) traded around $1,504 on Coinbase early morning May 9, up from $628 five weeks ago.
The coin broke above resistance at $1,600 early this month, but failed to hold the gains towards a target price of $2,000.
Current trends suggest BCH to be tracking declines in the rest of the market, with the coin down just under 9 percent overnight to Wednesday morning.
At its peak, Bitcoin Cash touched $4 100 before crashing 70 percent in the first quarter of this year. Investors have generally been spooked by the volatility in crypto markets, but there has been a noticeable liking towards BCH, which has proved cheaper and quicker for financial transfers, compared to Bitcoin.
At Golix, Bitcoin Cash currently trades around $2 690 and bid at $2 100.
After finishing the first quarter at $394, Ethereum (ETH) soared 83 percent to $722 on May 9, taking its total global market value to $71 billion, the second biggest after Bitcoin.
The currency scaled past $825 round May 6 before retracing to current levels. ETH charts show trading is weak at current levels, but analysts are targeting a price of $1,100 in the short term, if it can can break out above resistance at $900. Below that, ETH will be range bound at about $640.
Here, Ethereum has climbed 47 percent in the past fortnight, to $1,250. That’s what sellers are asking for. Buyers are prepared to pay $1,000.
At $153, Litecoin (LTC) is currently trading 30 percent above the end of March price level. But since founder Charlie Lee sold his entire holdings in the cryptocurrency late last year, Litecoin has struggled to attract the same kind of interest that saw it hitting a record high $375 in December.
The currency made a break in the last few weeks, reaching a target by analysts of $180, though it is back to support at current levels. Below that it could be headed for $140, they say, and above which, could test $168.
On current trends, it is difficult to see why Litecoin earned the nickname ‘silver to Bitcoin’s gold.’ Locally, LTC is up more than 51 percent to $243, from four weeks ago.
Other major cryptocurrencies like Ripple, Cardano, EOS, Stellar and Dash have all risen significantly.
Analysts say investors should be prepared for rapid changes in the price of cryptocurremcies, a key trait of the market since the first digital asset Bitcoin went online in 2009.
Sentiment has played a big part in the volatility, but it is the backlash from regulators that has hit prices hardest in recent months.
Regulators around the world have stepped up their warnings about digital money as a viable investment option, accusing cryptos of lacking a sound legal footing.
The biggest worry from governments is the assertion by the creators of Bitcoin and other altcoins of self regulation. The Reserve Bank of Zimbabwe governor John Mangudya has warned investors that they will receive protection from no one in the event of fraud or failure.
Some of the most sharp comments from global regulators and experts include Bitcoin being “a deadly gamble”, one that will to come to “a very bad end”, and that investors who put their money into virtual currencies “should be prepared to lose all their money.”