Well, the cryptocurrency markets went down quite significantly over the weekend! Bitcoin fell by a total of 10% on Sunday after it dropped beneath $9,000 and continued to plummet even further, reaching as low as $8,000 to finish the day.
The market tumble did not strop there.
On Monday, March 10th, the number 1 ranked cryptocurrency continued to fall further lower as it breached the $8,000 level and dropped by another 5.5% as it went as low as $7,600! It has since attempted a small recovery and is now making an attempt to climb above the $8,000 resistance level.
This market crash is something that is apparent in the entire economy and not just cryptocurrencies. There have been 2 driving forces that have been attributed to the overall market economy drawdown.
Firstly, there is the overarching coronavirus that is spreading fear in every part of the globe. I do not need to mention much about this, I’m sure you have all heard about it.
Secondly, there was a fallout between Saudi Arabia and Russia last Friday, March 6th, when they both attended an OPEC meeting. Russia refused an offer from Saudi Arabia to cut barrel production of oil to 1.5 million barrels. In retaliation, Saudi Arabia decided to increase its oil barrel production to 2 million barrels per day, sparking the beginning of an oil pricing war. They had also slashed the cost per barrel for their Chinese customers by as much as $7.
This sent shockwaves throughout the entire market as Oil prices collapsed by over 30% to break beneath the $30 for the first time in many years. The S&P500 went on to drop by another 5 or 6% and the Dow dropped around 1,200 points in the worst-performing day since the previous recession.
During times like this, typically, investors look to move their investments out of the risky assets and put them into safe havens. This is why we have seen Gold rising over the past few days.
However, Bitcoin is still not rising as it continues to go against the theory that it is also a safe haven asset itself. Instead, it seems that cryptocurrency investors are looking to move their funding into very promising cryptocurrency projects - and Loopring is one of them!
Loopring is the Next Hot Thing, Similar to SNX
SNX is a cryptocurrency token and a decentralized synthetic asset issuance protocol that is built on Ethereum. It is a DeFi protocol, similar to Loopring, that allows users to issue things such as stablecoins or tokens that represent fiat currencies.
For the longest time, nobody really believed in SNX. In fact, most people probably didn’t even understand what it was or how it works - so, why would they even think that it was going to be such a big hit in 2019?
I wouldn’t blame them, the chart for SNX was pretty stagnant and, in some sense, it was extremely dire for the longest period of time as it remained extremely flat for an extended number of months.
Well, being a strong hand really did pay off for any SNX holder during 2019 when the cryptocurrency went on an epic rally as it increased by over 3500% from a low beneath $0.035 to reach an all-time high of $1.50 during November 2019.
Take a look at the chart performance below;
Loopring is in the same sector as SNX and this project also truly has the potential to surge just as much in 2020, especially considering the rate at which DeFi is growing this year!
4 Reasons It Might Be Just The Beginning of Loopring's Rally
1. It Only Costs $0.000124 Per Trade
This is pretty golden for me, especially considering I place a fair amount of trades per week and the traditional maker/taker fees on centralized exchanges always seem to add up!
The fact that it only costs you $0.000124 per trade is absolutely sublime. It literally is dirt cheap to be trading on any Loopring DEX and the fact that it all occurs on the Ethereum blockchain just puts the icing on the cake. Furthermore, people even think that trades will get cheaper...not that it needs to be any cheaper than it already is.
The actual protocol itself is designed to handle over 160,000 transactions (trades) per second on Ethereum. However, it currently facilitates around 2,025 trades per second whilst guaranteeing the same level of security as the underlying blockchain, Ethereum, which is possible due to on-chain data availability and zkRollups.
With on-chain data availability disabled, Loopring can facilitate up to 16,000 trades per second.
The reason that Loopring cannot reach its maximum capacity is simply due to the fact that Ethereum, the underlying blockchain, is not yet quick enough to facilitate this. However, the real magic will appear once Ethereum upgrades to Etheruem 2.0. This will greatly increase the throughput for Ethereum and will, theoretically, allow for Loopring to reach over 160,000 trades per second.
Don’t take my word for it. Take a look at what Vitalik Buterin, founder of Ethereum, has to say about it;
3. Loopring is a Protocol = Not a Single Point of Failure
This is one of the biggest things that people seem to get confused about Loopring. It is not a decentralized exchange (DEX) in itself. Instead, Loopring is a protocol that allows for developers to come and build their own DEX on top of the protocol.
Loopring provides all the right tools for developers to come and build their own ultra-fast (and with super cheap trading fees) decentralized exchanges on top of Ethereum. The success of Loopring is a sum of all the products and exchanges that are built on top of the Loopring protocol.
If one of these exchanges goes down for some reason, there will still be a large number of other decentralized exchanges that are still running which means there is no single point of failure for this project.
4. Unhackable Tech, Trading With Loopring is 100% Secure
Decentralized Exchanges have been a buzzword in the cryptocurrency for a number of years now, however, they are finally reaching the stage of fruition. The cryptocurrency industry has been plagued with exchange hacks that have held back the progress for the entire ecosystem as misinformation spreads about how “Bitcoin was hacked” again and again after these exchange hacks.
However, Bitcoin was never hacked. It was the centralized exchange in which people deposit their Bitcoin into that were hacked. This is the problem with centralized exchanges today. We have to be able to trust them that they will do their due diligence in protecting our funds. We also have to trust the fact that they are not trading/using our funds behind the scenes to increase their own profits - but hey, that’s another story!
The thing with Loopring DEX’s is that all the trades occur on-chain. This means that they occur from wallet to wallet and there is no need to deposit funds into the exchange to be able to trade. When you sign up to the exchange, you simply link your own private wallet and that’s all there is to it.
When you make a trade, the exchange happens directly from your wallet to the other user’s (on the other side of the trade) wallet - all without the need to go through a middle man! This is what is known as “non-custodial” and it totally prevents users from hacks or thefts as they remain in charge of their own funds and never have to give them to any centralized 3rd party for the trade to occur!
Let us move onto some price analysis and take a look at what has been going on recently.
Loopring (LRC) Price Analysis
LRC/USD - MEDIUM TERM - DAILY CHART
What Has Been Going On?
Looking at the chart above, we can see how well the cryptocurrency has been performing in 2020. So far, it has increased by a total of 125% after reaching the current trading price of around $0.047.
We can also see that the majority of the price increase occurred during February 2020. Loopring climbed from a low of around $0.027 and went on to surge as high as $0.055. It quickly dropped but managed to find support at the 200-days EMA before rebounding again. On the bounce, it found resistance at $0.048 which caused it to roll over and fall back into the 200-days EMA.
Over the recent market tumble, we can see that LRC did also drop, however, it managed to find strong support at the .5 Fibonacci Retracement level priced at $0.037 which allowed it to reverse and climb higher again.
We can now see that Loopring faces the resistance at the $0.048 level and must break above this to climb further higher.
Loopring Medium-term Price Prediction: Bullish
Loopring can not be considered as anything but bullish at this moment in time, especially considering the fact that we are making an attempt at the highs once again. For the bullish run to continue, Loopring will need to break above the resistance at $0.0482 and $0.050 but should really have no problem in doing so.
Once $0.050 is broken, higher resistance lies at $0.0512, $0.054 (1.414 Fib Extension), and $0.055. The resistance at $0.055 is provided by a very long term bearish .382 Fibonacci Retracement level and will require significant momentum for the market to overcome.
Above $0.055, higher resistance is then located at $0.058 (1.618 Fib Extension) and $0.059 (short term 1.272 Fib Extension - blue). Beyond this, additional resistance is located at $0.0625 (short term 1.414 Fib Extension), $0.066 (bearish .5 Fibonacci Retracement), and $0.07.
Where Is The Support Toward The Downside?
Nothing goes up constantly and never comes down which is why we see retracements in the bullish markets. If Loopring does retrace, we can expect the first two levels of support to be located at $0.045 and $0.040.
If the sellers continue to drive Loopring beneath $0.040, added support is located at $0.037 (.5 Fib Retracement), $0.036 (200-days EMA) and $0.0335 (.618 Fib Retracement). The support at $0.0335 is further bolstered by the 100-days EMA.
Further beneath this, we can expect additional support at $0.03, $0.027 (.786 Fib Retracement), and $0.024 (.886 Fib Retracement).
What Are The Technical Indicators Showing?
The RSI recently rebounded from the 50 level which shows that the bulls are still in full control of the market momentum. Furthermore, it has so much room to rise before becoming overbought which could suggest that we will be seeing some fresh 2020 highs on the way for Loopring!
Assessing all of the circumstances including project development, DEX progress, and the state of the technical analysis, I’m fairly confident that Loopring is a fantastic long term pick for anyone who missed out on that SNX explosion last year.
The cryptocurrency is certainly bullish and it is ready for a rally. This specific rally that we are looking for might come next week or it might come in 5 months, however, when it does come, it will pay off in a significant way for anybody strong holders!