NFTs are all the rage. We have heard of some NFTs going for as much as $69 million! The DeFi revolution keeps going from strength to strength. Bitcoin it seems has its price stuck in consolidation and could even drop or head off to the moon. No one knows. Altcoins in the last few days have had prices rise in some cases exponentially. Some banks continue to dither as to whether they will go for a Central Bank Digital Currency or not. Meanwhile, in Canada, the first North American ETF is now fully operational with another two fully functional. The US awaits its first Bitcoin ETF approval.
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A recent analysis of Cardano (ADA) had posited that the price could fall to about seventy cents. It certainly looked this way the last few days. The announcement by Coinbase changed that. Coinbase announced that Cardano would be added to Coinbase Pro. Likely, this addition will also indicate ADAs inclusion to Coinbase.com. Charles Hoskinson beamed with joy and satisfaction on his YouTube channel following the announcement. There is now talk of ADAs price hitting $2 in the next few weeks. Some have posited $5! Nevertheless, the ADA daily chart suggests a more conservative consideration.
Chart courtesy of Tradingview.com (Please click image to enlarge)
Fibonacci extensions show what it means to be conservative. We see that the Fibonacci extensions 23.6, 38.2, 50.0, and 61.8 are $1.24, $1.42, $1.57, and $1.72 respectively. The current price at the time of writing is $1.28. This price has a way to go to hit $1.72. The price may very well go beyond $1.72 quicker than we can imagine. There is also the issue of the Ichimoku Cloud. It is obvious ADAUSD is bullish with the chikou span free of the price action. This does indicate that the price could rise uninterrupted. Looking at the lower timeframes i.e. the one and four-hour timeframes, both show strong signs of consolidation. This may be due to investors/speculators waiting for the launch which occurs tomorrow. One could suppose that once the launch takes place, price action could be gauged more accurately.
Cardano has a lot of good things going on with many enhancements to come. It also has a very solid developer and forward-looking team guiding the project. With this, there are many reasons to be cheerful. As to what the price will do in the future, your guess is as good as mine.
On Saturday, BTC found itself breaking into the $60k region. The sudden price rise was as surprising as it was exhilarating. BTC had been in the $50k for quite a while and trading sideways for a few days. Traders observed price ranges between $49k to $54k. Evidence of this is seen via Fibonacci retracement on the graph below.
Charts courtesy Tradingview.com (Click image for larger view)
So, why the sudden drop? The first reason is probably more emotional than anything else. The Indian government announced the banning of not just owning but trading Bitcoin. Some investors were panicked, hence, closing their positions. The second reason, which seems more logical was the liquidation of over $2 billion worth of crypto futures. A total of 178,574 traders had their positions liquidated with a majority of them long (this means that the traders bet that the price of BTC would rise). When markets are experiencing dips and surges, overleveraged positions are closed when traders cannot meet margin calls.
Arguably, other reasons for the dip may include some macroeconomic reasons such as US treasury yields and concerns that the Chinese government may have to step in to keep markets flowing in Asia.
Investors should sit tight and hold their positions. The worst-case scenario is that price falls to $49k. Having said that, things are going to get interesting as the future descends upon us.
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