Digital Assets rallied +15% this week for the best weekly gain of the year. BTC was one of the week’s top gainers – adding ~ 18% and driving broad based gains across the Digital Asset space. Volume this week showed signs of improvement – helping to offset lackluster trading in the first half of the month – and put the space back on track for a MoM volume gain.
Price and volume action were the focus of the week as a BTC short squeeze supported the rally and volumes improved significantly across most coins / tokens. Interesting to note (chart 3) that Coinbase saw the most dramatic increase in BTC volume this week, pointing to re-engagement from American retail buyers.
News flow remained on the light side. Top stories of the week included: 1. Coinbase receiving regulatory approval to list security tokens, 2. Grayscale reporting strong 1H18 inflows, 3. And continued optimism around potential Digital Asset ETFs.
Looking into next week, expect BTC to continue to set the pace for the rest of the space. Looking back at previous >=15% weeks, ~70% have seen gains extended into the following week – the median 2nd week gain is just over 4% which would put us on pace to challenge the 7800 mark. How BTC performs around the 7800 level will give us a good indication of where we stand in the ongoing bear market. The bull scenario is probably for a modest pullback and another squeeze that could put short sellers on the back foot until around the 10,000 level. A more significant pullback at 7800 would likely give shorts the confidence to build positions and drive another dip into the low 6000 range.
Read the full report here: Digital Asset Weekly July 20 2018