Digital Asset Weekly, Sep 28

Digital Assets extended gains this week adding another ~ +7% on significantly better volume.  Gains were broad based with ~ 70% of the top 200 coins and tokens ending the week higher.  Strength this week was skewed towards 2nd and 3rd tier coins and tokens pointing to a tentatively improved risk appetite.

Trading highlights this week were led by a sharp uptick in volume with trading in the most active coins up ~ 35% from the previous week.  YtD volume laggards XRP and LTC saw a shot in the arm with volumes this week surging +530%WoW and +130% WoW respectively.  Significantly more active trading in XRP, LTC and BCH and double digit WoW price gains pulled investor attention from BTC which ended the week flat but with volume up ~ 20% from the previous week.

Headlines this week were more of a mixed bag, but marked by a number of significant events – including: 1) Coinbase announcing a plan to list a lot more digital assets, 2) Bitmain ending months of speculation with its IPO filing, 3) Circle launching its USDC stablecoin, 4) and Bitcoin developers discovering and patching a potentially very serious bug.

For BTC, the sharp decrease in price volatility was probably the most significant technical event of the week.  The decrease in price volatility to the bottom end of the YtD range sets us up for mean reversion and a rebound in volatility in the coming week.  Expect to see a sharp move in BTC price in the coming days.

Continue to view near term BTC risk reward as positive and feel that the move is more likely to break up than down given strongly positive 4Q seasonality, a sharp pullback in shorts, a removal of the SEC ETF overhang (decision on Van Eck ETF pushed back) and probability of better press as ICE backed Bakkt physical futures launch in early November.

Read the full report here: Digital Asset Weekly Sep 28 2018


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