Loopring (LRC) weekly chart outlook and will it grow a lot in the future ? Plus quick BTC update !

Loopring (LRC) weekly chart outlook and will it grow a lot in the future ? Plus quick BTC update !

By Djordi | DJCrypto | 21 May 2020


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In this article I want to talk about Loopring and its future price. Loopring is a method of tipping on Publish0x, so I would like to know if its price will grow a lot in the future or not.

Loopring wants to create a decentralized exchange (DEX) where you can trade risk-free in terms of custody. The underlying blockchain and smart contracts will make it a non-custodial exchange where you can trade your cryptocurrencies with other traders. They state as well that your assets cannot be taken by hackers, exchange owners or even state-level adversaries. Centralized exchanges like Binance for example will harbor more risks, because when you leave Bitcoin or altcoins on the exchange, you do not own them. It is the exchange that owns them and they can do whatever they want with it. In this case it is more about trust.

I am going to show different weekly charts of different exchanges for Loopring. This will give me a better idea of the accumulation that is going on for Loopring.

The first will be from the exchange OKEx (compared to Tether) :

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The second one is from Binance :

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We can see different stories for OBV on different exchanges. OBV is the On Balance Volume and shows accumulation. We can see that Loopring is in a downtrend for a couple of years already with lower highs and lower lows. However The last touch on the low side of the red line shows a wick and price action has been more on the upper side lately. Like other altcoins and Bitcoin it is trying to push upwards and break the downwards channel to the upside. The accumulation on Loopring shows two different pictures. On the OKEx exchange we see decent volume and accumulation happening and on the Binance exchange we see decent volume as well, green candles are more apparent, but OBV is not showing a clear accumulation, like for example for Basic Attention Token ( I wrote another article about BAT and the accumulation). I find it harder to read here on the Binance exchange. I see a bullish divergence from February 2020 until now, because price is lower between the two points and OBV is higher. This is a decent sign and hopefully we will see continuance in OBV for Loopring. This would give me more confidence that this altcoin is going to grow a lot in the future, but for now I want to temper the expectations and I want to be careful.

Here I will show you another weekly chart with the indicators RSI (Relative Strenght Index) and the Chaikin Money flow :

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The Chaikin Money flow is a volume-weighted average indicator that shows accumulation and distribution over a specific period of time. It will tell you the buying pressure and the selling pressure in a period of time. What is clear to see is that, after a couple of years, we finally see some good relieve on the selling pressure. Less people are selling, which means less weaker hands in the market. People are slowly getting ready to let this ride to the upside. In terms of buying pressure it does not look very impressive to be honest.
The RSI (see the red line I drew on the indicator) was showing a bullish divergence with higher RSI and a lower price (wick counts and shows a lower price). This has been playing out with Loopring moving up in price recently. The RSI has still decent room to go to the upside from here, but a pullback seems likely to me, because price has been rejected once again against the red upper line I drew.

Here is the OKEx exchange for Loopring :

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We can kind of see the same thing here, as with the Binance exchange. The Chaikin Money Flow shows a clear uptrend with less selling pressure and this is good for Loopring. However once again the buying pressure is not there.
The RSI shows upside movement and a bullish divergence and price is playing it out right now. 

Bitcoin (BTC)

When I look at altcoins I always look at Bitcoin, since Bitcoin often makes the moves and altcoins follow. Bitcoin right now is fighting to stay up, but it seems that we will get rejected once again at the 10K level. The hash rate is dropping as well and it seems very much possible that we will see one more time a miner capitulation. Here is a quick daily chart of BTC with hash ribbons :

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This is a daily chart and I have drawn a channel for price action (green lines). Don’t mind the blue drawing of lines. It is what I was projecting a couple of weeks ago. I believe price will still be moving to the downside first before we really start our bull run. Looking at price right now, we actually broke out of the green channel which is great and it is even testing the green line as support. Absolutely great and it seems we are going to move upwards heavily, but I am very cautious and I think we will break back down again first. This has to do with the Hash ribbons. Looking at the indicator we saw a buy signal a little while back and price has been moving up. However we see right now in the indicator the green line moving downwards pretty steeply and this means in general that we are going to see miner capitulation. After the halvening of Bitcoin it seems rational to me that we would see some form of miner capitulation, since their rewards are cut in half. Ineffective miners will lose and give up. It seems to be coming up soon and will give selling pressure and price will move down. I see the high 7K (7800 more or less) as a good possibility for the move and I even have my eyes on 6.5K/6.3K. However the 6K level is still far away and I do not want to entertain that yet.

Bitcoin moving down from 9.3K to 7.8K for example will lead to altcoins moving down nicely as well. It will give a great opportunity to dollar cost average in on your favorite cryptos !

Conclusion

For Loopring I see some form of accumulation, but not as clear as on some other altcoins or Bitcoin. This leaves me with a little doubt as to the rise of this crypto. For example for BAT I can see it going from 0,20$ to 2$, but with Loopring I am not as sure if it can go from 0,04$ to 0,40$, looking at the OBV indicator. The Chaikin Money Flow shows less and less selling pressure and that is a good sign ! On the other hand for now we lack the buying pressure and this is needed to propel it upwards. Loopring is in a downwards trend for years (like a lot of altcoins) and it has tested the price channel several times to the upside and the downside. Price action right now is testing the upper side, but Loopring will depend on Bitcoin if it will break out or not. If Bitcoin is going to explode upwards, Loopring will break to the upside as well, but if we see miner capitulation in BTC, which I believe will happen first, we will see Loopring moving down first as well. I am looking for Loopring at the 0,03$ to hold as support and this will create a higher low and possibly a decent W-pattern, which often leads to the upside. To the upside Loopring needs to break the 0,042/0,045$ level and create these levels as support.
Personally when I look at the charts, I am not 100% convinced that Loopring will skyrocket in the future, but it does have potential and is an interesting project. It is very likely to break to the upside in the future, but it has to surpass the 0,15$ level for me (the beginning of the channel I drew), before I give it a decent change to reach the 0,40$ level to do 10x from where it is now.

This is not financial advise and I am not a financial advisor. Please do your own research and make your own decisions.


Djordi
Djordi

I am Djordi van Kampen and I live in France. 2017 was the year I learned for the first time about cryptocurrencies and I am intrigued by what it can accomplish in this world, for the better of course !


DJCrypto
DJCrypto

Crypto enthusiast that would like to share his experience in the market in terms of investing and trading. Also travels a lot and likes photography and minerals.

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