BTC, ETH & LINK Price Prediction for Q3 2020


Hello traders!

We are currently halfway through Q3 2020 and the performance of the entire cryptocurrency industry has been quite staggering. Since the start of Q3, which began at the start of July, the likes of Bitcoin has managed to surge by a total of 33%, Ethereum by 90%, and Chainlink surged by an enormous 300+%.

Let me take a deep dive into each of these coins individually and provide an update on where the market could end by Q3.

Bitcoin Overview

As mentioned, Bitcoin managed to surge by a total of 33% in Q3 2020 and it recently climbed above the $12,000 level today to reach the current resistance at $12,126. As I was writing this post, Bitcoin pushed even further higher and is trading at $12, 471.

In Q2 of 2020, Bitcoin had established a period of consolidation when the coin was trapped within a symmetrical triangle pattern during both May and June. Bitcoin was unable to break beyond the confines of this triangle during these months as it continuously bounced between the boundaries of the triangle.

This period of consolidation was broken toward the end of July which allowed Bitcoin to surge as high as $11,400 by the end of the month. In August, Bitcoin continued higher to reach $12,126 today (EDIT: now $12,471). We will get to the analysis shortly, but right now, I would like to quickly go over some important Santiment metrics.

Firstly, one of the most important metrics to show you is the Daily Active Addresses for Bitcoin over the past 6-months;

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The data from Santiment shows that the total number of Daily Active Addresses has been continuously rising over these past 6-months as it climbed above the 1 million level multiple times in July and August.

This shows that the number of people entering into Bitcoin is growing as people attempt to take advantage of the price pushes higher.

Next up, I would like to show the NVT Ratio  (using transaction volume) which compares the BTC market cap to the total number of daily BTC transactions;

25cdea7a118fe2e48652d5bd5da450da21ad7cd3ce7c3ca574246fffa13df361.png

High levels of NVT show that the market is overvalued and that it should head lower. Looking at the current NVT above, we can see that the price of BTC has managed to increase whilst the NVT still remains low. This shows that the market is still not too overvalued and we can expect some further upside. 

The last Santiment metric for Bitcoin that I would like to show you is the Total Sentiment Balance over the past 6-months;

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Looking at the chart above, we can clearly see that the overall sentiment - taken from comments on social media channels such as Reddit, Twitter, and Telegram - has flipped positive during April 2020 and has largely remained positive ever since. This is another strong indicator to show that the momentum is certainly on the bullish side as of this moment.

Let us continue to take look at the charts and see where this market can end up by the end of September (Q3 2020).

Bitcoin Price Analysis

BTC/USD - From May 2020 Onward - DAILY CHART

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What Has Been Going On?

Taking a look at the daily chart from May 2020 onwards above, we can clearly see the symmetrical triangle that I had previously mentioned. During May, June, and half of July, the market was trapped within this period of consolidation as it bounced between these two boundaries in the triangle.

The breakout occurred toward the second half of July as Bitcoin broke above $9,250 and continued to maraud higher. It quickly broke above $10,000 and $11,000 in the space of just one day and continued to finish the month of July at the $11,400 level.

In August, we can see that Bitcoin did attempt to push higher but it found some strong resistance at the $12,000 level. The coin found a level of support at a short term rising trend line which allowed Bitcoin to remain above $11,000 during the volatile opening week of August.

Just today, Bitcoin managed to push higher above the $12,000 level as it reached as high as $12,126 (1.272 Fibonacci Extension level).

EDIT: As I wrote this article, BTC continued higher to break the resistance at $12,126 and it is now trading higher at the $12,471 resistance (1.414 Fib Extension level).

Are We Bullish Or Bearish?

We are most certainly bullish right now - especially with the additional break above $12,000 - although we need to wait for the daily candle to close. 

The coin would have to fall beneath $11,000 to turn neutral and further beneath $10,000 before being in danger of turning bearish.

If the sellers do push lower from here, the first level of support lies at $12,000. This is then followed by support at $11,610, $11,400 (.236 Fib Retracement), and $11,000. Added support is then found at $11,900 (.382 Fib Retracement) and $11,500 (.5 Fib Retracement).

Where Can We Go From Here?

If the 33% progress so far in Q3 is anything to go by, we should finish Q3 at the $16,000 level. However, this does seem a little out of the reach for the bulls at this moment in time. 

If the buyers do manage to break the resistance at $12,126, the first level of higher resistance lies at $12,350. This is then followed by additional resistance at $12,471 (1.414 Fib Extension), $12,600, $12,800, and $13,000.

Above $13,000, additional resistance is found at $13,250 and $13,475 (1.414 Fib Extension).

Further higher than this, resistance can be found at $13,700, $13, 900, $14,000, and $14,136 (1.618 Fib Extension - orange).

Ethereum Overview

Ethereum has seen an even strong performance so far in Q3 of 2020 as it surges by a total of 90% to reach a 2-year high at $438 - a price not seen since August 2018.

This Ethereum bullish push higher is nothing short of remarkable and it is attributed mainly to the fact that the entire DeFi sector has exploded over these past few months. Each and every DeFi application is built on top of Ethereum and therefore is part of the overall Ethereum ecosystem.

You only need to look at the charts from DeFi Pulse over the past 90-days to see how quickly the DeFi ecosystem has grown. Over the 3-month period, there has been a total of $6.3 billion locked into DeFi smart contracts that are built on top of the Ethereum network;

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In short, there is a SH*T tonne of value locked up in Ethereum DeFi Smart Contracts.

Another driving force behind this impeccable Ethreum push higher is the fact that the ETH 2.0 upgrade is slated to be pushed by the end of 2020. This upgrade for the Ethereum network will see the coin shifting from a PoW consensus mechanism to a PoS one. As a result, the stability and scalability of the network should be improved significantly - allowing the transaction per second (TPS) rate to soar past the current deadlock of 25 TPS.

Interestingly, this has caused the number of Ethereum holders that hold more than 32 ETH to explode during the tail end of June;

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This is because, under the new consensus mechanism, to take part in Etheruem staking - users will need to be holding a total of 32 ETH. This jump in the number of holders holding 32 ETH shows that a significant number of ETH holders are planning on taking advantage of the shift to PoS.

However, not everything is functioning as expected in the ETH 2.0 paradise. The ETH 2.0 testnet, dubbed Medalla, went live at the start of August 2020. At the time, there were the following 5 clients that were working on the Testnet - 

  • Prysmatic Labs - Prysm
  • ChainSafe - Lodestar
  • PegaSys - Teku
  • Status - Nimbus
  • Sigma Prime - Lighthouse

All of these clients were testing their versions of the ETH 2.0 upgrade on the testnet together. There was a total of 20,000 ETH users that opted into the testnet - making it large enough to provide promising results during the testing.

Unfortunately, over the weekend, it appeared that the ETH 2.0 testnet crashed as the participation rate plummeted;

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As you can see, the participation rate dropped quite significantly as it appeared that everyone was leaving the Testnet at the same time.

However, things were not quite as it seemed.

As it transpired, there was a time synchronization bug involved with just 1 of the clients. Apparently, the bug caused the time sync clock to adjust itself to 4 hours ahead which led to the network not being able to sync to each other. 

As mentioned, this was just one specific client - the Prysm client;

You see, this was not really a problem with the ETH 2.0 code, but just a problem with one specific client. It offered a lesson to users in client distribution due to the fact that the majority of users on the testnet opted to use the Prysm client - because they were the only team to provide a detailed tutorial on how to use it;

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As a result, when the Prysm client crashed, the participation dropped due to the fact that most people were using this client. 

It is important to state that ETH 2.0 is FINE and they have updated the client to fix the error;

Ethereum Price Analysis

ETH/USD - From May 2020 Onward - DAILY CHART

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What Has Been Going On?

Taking a look at the daily chart above, we can see that Ethereum was also trapped within a period of consolidation during the majority of Q2 as it failed to break above the $250 level. This pattern is known as an ascending triangle and it was not broken until mid-July. 

After breaking above, Etheruem went on to close July at a price of around $340.

In August, ETH continued to surge higher, it found some resistance at $400 for the first two weeks of the month but eventually managed to break above this level over the past week as it surged higher into the resistance at $438. This was resistance provided in August 2018 - allowing ETH to reach a 2-year high price.

Are We Bullish Or Bearish?

Obviously, ETH is bullish - you don’t need me to tell you that!

The coin would need to fall beneath $335 to turn neutral and further beneath $280 before being in danger of turning bearish.

If the sellers do push lower, support lies at $422, $400, $392 (.236 Fib Retrcaement), $361 (.382 Fib Retracement), $335 (.5 Fib Retracement), $310 (.618 Fib Retracement), and $300.

Where Can We Go From Here?

I doubt Etheruem can increase by another 90% by the end of Q3 in Septemeber. This would result in Etheruem reaching as high as $815 over the next month and a half. However, I would not be surprised one bit to see Ethereum at $550 by the end of September if the current 2-year resistance can be broken.

Once the bulls do crack the $438 resistance, higher resistance is then expected at $460 (long term bearish .5 Fib Retracement). This is followed by resistance at $475 (1.414 Fib Extension), $490 (1.618 Fib Extension), and $500.

Beyond $500, resistance lies at $526 (1.618 Fib Extension) and $550 (bearish .618 Fib Retracement).

Chainlink Overview

Chainlink is on a TOTALLY different wavelength after it surged by 300% in Q3 so far to reach as high as $20 in August - setting fresh all-time highs again!

This Chainlink explosion has been nothing short of extraordinary as it exceeded everybody’s expectations and has actually managed to flip Bitcoin Cash and take the 5th ranked position in the market cap rankings with a total market cap value of $6.57 billion.

The main driving force behind this impressive Chainlink rise is the fact that all DeFi projects actually need the decentralized Chainlink pricing oracle service they offer. You see, these DeFi projects need to take off-chain pricing data from different sources and feed it to the smart contracts that are on-chain. This is where Chainlink steps in to provide a decentralized pricing oracle.

The number of Chainlink integrations over these past few months have been truly staggering as they amass partnership after partnership. You can see a full list of them here.

On top of this, the Santiment metrics continue to explode for Chainlink.

First and foremost, the total number of Daily Active Addresses on the Chainlink blockchain has continuously been reaching higher highs;

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This goes to show the influx of new buyers for Chainlink over these past few months.

In addition to this, the overall Sentiment Balance for Chainlink has been extremely positive and has been climbing significantly since July 2020;

7be6082741e309fc9d034c476e3a14517831912472c1027fd0176aea62f9c19c.png

These huge spikes indicate that people, on the whole, are extremely optimistic about the future of Chainlink.

In addition to all of this, the most important metric I feel to point out to you is the fact that the price has exploded whilst the NVT Ratio (Using Transaction Volume) has remained relatively low;

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Remember that the low values of NVT show that the market is still not yet overvalued- whilst high NVT values show the market is overvalued. This shows that Chainlink has exploded without even becoming overbought which indicates there is still a lot of room to push further toward the upside before the market is overvalued.

Chainlink Price Analysis

LINK/USD - From 2020 Onward - DAILY CHART

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What Has Been Going On?

Taking a look at the daily chart above, we can instantly see Chainlink exploding in July as it climbed above the previous resistance around $4.60. After breaking above, Chainlink continued to reach a high of $9.00 in July.

During August, we can see that LINK exploded much further higher as it reached as high as $20.09 where it met resistance at a 1.618 Fib Extension level. It has since dropped to trade at the $18.94 level.

Are We Bullish Or Bearish?

Obviously, we are bullish.

The coin would need to drop beneath $14 to turn neutral and further beneath $10 before being in danger of turning bearish again.

Support lies at $18.32, $16.83, $16, $14.76, and $13.

Where Can We Go From Here?

Where can we go? I will be honest here and state that there is really no way of knowing considering we are at all-time highs. The only tool we have in this situation is the handy Fibonacci Extension levels.

The first level of resistance lies at $19.70 (1.272 Fib Extension - blue). This is followed with resistance at $20.10, $20.61 (1.414 Fib Extension - blue), and $21.91 (1.618 Fib Extension - blue).

If the bulls continue to drive LINK above $22, resistance lies at $22.67 (1.272 Fib Extension - black), $24.22 (1.272 Fib Extension - purple), $26.26 (1.414 Fib Extension - purple), $28, and $29.18 (1.618 Fib Extension).

If Chainlink can continue to reach as high as $30 by the end of September, this would equal a 61% price increase form the current price.

 

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CryptoChartWizard91
CryptoChartWizard91

I dont *always* make good predictions, but when I do they're the best


Crypto Chart Wizard
Crypto Chart Wizard

My personal opinions and analysis of my the crypto projects that I follow. Not a financial advice.

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