Hello traders!

The market conditions are pretty rocky right now during the final week of February 2020, after Bitcoin was unable to break above the $10,000 level and rolled over, causing another market bloodbath amongst altcoins.

Nevertheless, we are all market experts here and we know that these are typical market cycles so it is nothing to be too overly concerned about.

Anyway, I wanted to do a price prediction for one of my favorite projects, Loopring! The team recently released its own decentralized exchange and there are some interesting developments in the pipeline to become excited.

Firstly, let us take a look at the performance for Loopring over the past year below;

Loopring dropped as much as 44% during 2019 when the cryptocurrency opened up at a price of around $0.039 and went on to close the year at a price of around $0.021. It had surged as much as 196% when it reached as high as $0.112 during April 2019, however, this is when things got a little rocky for Loopring. 

From here it dropped as much as 82% to reach the 2019 price low of around $0.02.

Despite the rocky performance in 2019, Loopring has started 2020 off pretty well. It managed to increase by a total of around 66% so far in 2020 (even with the late-February cryptocurrency bloodbath) as it trades at around $0.33 at the tail end of February 2020. It had even surged as much as 150% in 2020 to reach a high of $0.055 but has since dropped back into the 200-days EMA for support.

Loopring had recently upgraded its protocol to Loopring 3.0 which brought a host of strong stability and performance enhancements to the protocol. This has laid the foundation to bring about the strong decentralized exchange protocol that the team has always imagined as it allows for over 2,000 trades per second to be facilitated on each and every one of their decentralized exchanges. 

The release of Loopring 3.0 was just the foundation of what is to come next and we can expect some big things coming out of the project during 2020.

For the reasons stated above, and more discussed below, I believe that LCR has the potential to surge by a total of 450% in 2020 to reach my target price of $0.20 at some point during the year. As previously mentioned, The cryptocurrency has already increased by 66% in 2020 so if Loopring hits the $0.20 target, the total price increase for 2020 will equate to 820%.

In this article, I’ll firstly cover a range of topics that I believe will influence LCR in reaching my $0.20 target during 2020 and then analyze LCR on the daily chart to highlight some areas of resistance on the way toward the target.

What Is Loopring?

Loopring is a decentralized exchange protocol that allows users to come and build their very own, stand-alone, Decentralized EXchange (DEX). It is important to note that Loopring itself is NOT the DEX, instead, it is a protocol, a set of contracts, that allows users to create their own DEX to facilitate decentralized trading.

Built as an ERC-20 token, the entire project is designed to create an ecosystem in which traders can trade in a decentralized manner without the need to give up custody of their tokens to any 3rd party centralized exchanges.

Although it was originally built as an ERC-20 token, the Loopring protocol is actually blockchain agnostic. This means that it can work on any blockchain, so long as it has the facilities to execute smart contracts. In fact, it is already deployed on Ethereum, Qtum, and Neo. 

To read an overview of Loopring, take a look at this article.

Loopring 3.0

Their latest update, Loopring 3.0, greatly increased the security and performance of the network. The Loopring 3.0 protocol can actually facilitate around 2,025 trades per second by utilizing the security of Ethereum. It can even process around 16,000 trades per second without on-chain data availability, however, this reduces the security within the network. 

It can achieve this level of performance as it takes the majority of the computations off-chain and uses the underlying blockchain as a data and verification layer. By using zkRollups, it moves the transactions from the exchange off of the blockchain and only sends “proofs” of the trades to the blockchain. As less data is sent to the Ethereum blockchain and with fewer communications, this allows Loopring 3.0 to achieve the high number of trades per second that it can facilitate.

In fact, Vitalik Buterin, founder of Ethereum has even stated that, theoretically, once Ethereum upgrades to Etheruem 2.0 Loopring will be able to facilitate an extraordinary 160,000 transactions per second. You can find out more about that here.

Furthermore, by utilizing this method, the average settlement cost for each trade is $0.005, which is much less than the average $2 that centralized exchanges charge per trade.

Developmental Activity And Network Growth

Data from Santiment shows that developmental activity for Loopring is still pretty active;

Although it is falling it is starting to show signs of increasing once again as the team gear up to release additional features in 2020. Furthermore, as a lot of their features require them to work away from their main GitHub (such as working on DEX’s) this will not show in the developmental activity.

Another great statistic to look at is the growing daily active addresses for LCR;

This shows that there are more daily active addresses as the protocol starts to gain traction. Once some of the DEX’s built on top of Loopring 3.0 gain traction, we can expect the daily active addresses to begin to skyrocket.

Loopring.io Launched!

Speaking of development, as of late February 2020, the team officially launched the BETA version of their very own decentralized exchange known as Loopring.io! This is a testament to the work ethic of the team as they managed to open the doors to their DEX an entire month earlier than expected!

This is an exciting time for Loopring as traders are now able to use its platform to be able to place trades in a decentralized manner, all without having to give up the custody of their cryptocurrency!

The platform looks pretty slick and is on par with many of the centralized exchanges that you must be familiar with today. Personally, I absolutely love it! Take a look at the platform below;

As we are still in BETA there are not too many trading pairs to trade against. However, you can obviously trade ETH against LCR. You can also trade ETH against both stablecoins Dai and USDt. 

What To Look Forward To in 2020

The team over at Loopring has a jam-packed roadmap ahead for 2020. You can find an in-depth write up about it here, however, below is a quick overview of what to expect;

Products

• Heboa App - An Ethereum smart-wallet mobile app for non-technical users based in China. The app will have the regular features you would expect within a mobile wallet. It will also be able to support meta-transactions which will allow users to conduct dApp activities without any ETH. Furthermore, users will be able to access DeFi products and stake LRC directly from the app.
• Heboa DEX - The first BETA version is expected in Q1 of 2020 in a web version. 

Protocol

• The team plans to make Loopring customizable and upgradeable as, currently, all exchange functionality is currently bunded in one single contract. They intend to make exchange contracts more modular so they can choose which functionality they want to support and just simply add the specifically needed modules. 
• Further research and development of Zero-Knowledge Proof Systems to help increase scalability.

Relayer & Backend

• Lightcone 3.0 - This is slated to be the top priority for 2020. The relayer is what handles all off-chain components on the Loopring protocol. DEX’s are able to use the Lightecoin relayer as a service if they do not wish to build their own.
• DEX Browser - this will provide data query services for account balances and trading history for each exchange built on top of Loopring 3.0.

There are many more things to look forward to and I highly recommend taking a look at the roadmap for more details.

Loopring (LCR) Price Analysis

LONG TERM - DAILY CHART

What Has Been Going On?

Analyzing the daily chart above, the turbulent trading period in 2019 becomes immediately apparent. We can see that the strong climb toward the $0.11 level, however, we can also see the subsequent 80% price decline as the cryptocurrency dropped as low as $0.02 during the year.

Nevertheless, Loopring has been on the comeback trail in 2020. It managed to surge as high $0.055 as it ran into resistance at the short term .382 Fibonacci Retracement level (drawn in red) priced at $0.055.

It has since rolled over and dropped into support at the 200-days EMA but the momentum still seems to be within the bullish favor.

Are We Bullish Or Bearish (as of February 2020)?

As of late February 2020, we are still considered to be bullish. If Loopring does drop beneath $0.030 the bull run will be invalidated, however, with all the upcoming features set to be released, I am pretty sure that Loopring should not fall anywhere near the $0.02 level.

Where Is The Resistance On The Way Up TO $0.2?

On the way up toward the $0.2 level, the first levels of resistance are located at $0.04 and $0.05. Above this, resistance is expected at $0.055 which is provided by the short term bearish .382 Fibonacci Retracement level (drawn in red). This short term Fib Retracement is measured from April 2019 high to the December 2019 low.

If the bulls continue higher and break above $0.06, resistance is expected at $0.066 (bearish .5 Fib Retracement), $0.07, $0.077 (bearish .618 Fib Retracement), $0.092 (bearish .786 Fib Retracement) and $0.10 (bearish .886 Fib Retracement).

If the buyers continue to drive LCR higher, resistance lies at $0.107, $0.118, $0.13, and $0.143. The resistance at $0.143 is provided by a longer termed bearish .382 Fibonacci Retracement level which is measured from July 18, 2019, price high to the December 2019 price low.

IF the bulls can then break above $0.15, resistance is located at $0.156, $0.17, $0.181 (bearish .5 Fib Retracement), and $0.19. If they can clear all of these levels of resistance, they will be clear to make an attempt at my 2020 price target of $0.20.

Conclusion

Loopring has some fantastic features on the way that expands on the Loopring 3.0 foundations that they have already laid. These features should, theoretically, help Loopring to gain some traction within the decentralized exchange trading world and start to provide useful outlets for traders to use.

As more features head to the protocol, we should see more traders starting to use DEX’s that are built on top of Loopring which in turn should have a positive impact on price action.