The year 2020 has brought a significant rise to a number of well-known and lesser-known cryptocurrencies. Bitcoin (BTC) hit a new all-time high on December 1, while a number of smaller altcoins hit all-time highs in August.
2020 is a very exciting year for traders active in the crypto space. It begins with a relatively steady movement in the form of an ascending one. This created a bullish trend, as BTC made several attempts to break through the 2019 high at $13,880.
However, this is not a sign of things to come, as things changed in early March. Likely fueled by negative news from the outbreak caused by the coronavirus pandemic, BTC has dropped significantly along with the rest of the market.
The image below shows the prices of the S&P 500 (orange), BTC (green) and oil (blue) during March, a month where their values evaporated by 37%, 54%, respectively and 57%.
On March 12, BTC dropped 39% in a single day, the largest percentage drop in history. BTC hit a yearly low of $3,850 the next day. Interestingly, that is still the lowest price of the year, as BTC has experienced an absolutely massive bull run since then.
On December 1, BTC hit a new all-time high of $19,918. The price broke above it after several tests and reached a peak of $28,377 on Dec. 27. As of Dec. 28, BTC is up 280% since the start of the year, trading at $27,000 against 7,200, that’s the price on Jan 1st.
The outlook for cryptocurrencies in 2021 is very optimistic, both from a technical and fundamental perspective. Institutional interest is growing dramatically, as evidenced by the Grayscale Investment Trust’s crypto holdings.
The biggest bullish coin of 2020
In this article, we will take a look at the top 5 coins that have appreciated the most during the year. Only coins ranked in the top 100 by market capitalization will be considered and gains will be rounded to the nearest whole number.
By frame of reference, BTC has grown about 2.4x for the year, as of press time – the period of measurement that begins when the cryptocurrency is listed on a major exchange, so some coins such as YFI and YFII will not be mentioned here.
AAVE technical analysis
In 2020, AAVE had one of the most memorable price rallies to date. Aside from the fact that the year-to-date gain is significantly higher than all the other cryptocurrencies we analyzed, it is comparable to the gains during the 2017 altcoin season.
On January 1, 2020, AAVE was trading as low as $1.41. In mid-December, it was trading at around $74, up 5,000% on the year. Additionally, AAVE hit a new all-time high of $99.53 on December 5, surpassing the previous all-time high of $48.5, reached in 2018.
In a word, if you had invested $100 in AAVE on January 1st, you would now have $5,000.
AAVE’s price movement shows a parabolic move that, while unsustainable in the long-term, has delivered incredible gains throughout the year. Interestingly, the parabolic line – shown in green in the image below – has remained unbroken, since mid-December.
What stands out is the high volume during the early part of the run, and the extremely low volume since then, a sign of weakness in the trend. Alternatively, there could be a double top pattern emerging from August 25 to the next all-time high, a bearish sign. However, the parabolic line is still intact, which could allow AAVE to complete the year excellently, as long as it is not broken.
Note: logarithmic chart is used in the image to better visualize major price movements. The same will be done with all the charts presented in the article.
Technical analysis KSM
Although its growth rate is lower than that of AAVE, KSM has come a long way.
On January 1, the KSM price was trading at $1.15, while in mid-December it was trading at around $45, up 3,850 percent. KSM first hit an all-time high on September 3, then went on to hit a slightly higher high of $65.2 on December 2.
Unlike AAVE, the rise of the KSM is a straight trendline rather than a parabolic one, a sign of more sustained upside. While this bodes well for its future prospects, KSM also created a double top. This pattern is very similar to the one in AAVE and can be a sign of a trend reversal.
BAND technical analysis
Of the coins we have outlined, BAND is the first to break out of its bullish structure, which is true whether you use the parabolic (green) line or the ascending support line (black). This is a bearish sign and if BAND continues to fall, it can be seen as a benchmark for other coins that have completed a similar upward movement.
Before being broken, BAND hit a new all-time high of $17.78 on August 10, but has been falling since. Measuring from a January 1 price of $0.218, this is an 8,500% gain, a gain that outperforms AAVE. However, after the crash, higher prices could not be sustained and AAVE will keep the top spot.
At the time of writing, BAND is trading at $6.03, with a gain of 2,740 percent.
However, due to the structural break, the outlook for BAND is significantly bleak compared to AAVE and KSM. Also, it’s worth mentioning that BAND has dropped a bit more than 60% since its all-time high on August 10, showing the risks of entering a trade before a significant corrective movement.
CEL technical analysis
On January 1st, the CEL price traded near $0.138. After a significant drop during the “March crash,” CEL started an uptrend, reaching a new all-time high of $2.72, on Nov. 30.
The price movement is very similar to that of KSM, with the difference that CEL has not fallen and confirmed its support line since hitting an all-time high. Furthermore, CEL has yet to undergo a significant correction. From the coins we’ve picked, it’s the only one that hasn’t done that.
Thus, while the gradual rate of increase is a positive sign, the lack of correction is a cause for concern. A drop to the ascending support line would be a drop of around 30%.
OCEAN technical analysis
Finally, we come to OCEAN, the lowest gain of the top 5. OCEAN was trading at $0.034 on January 1st, before beginning a rapid rally that culminated with a high. new all time is $0.75 on Aug 18.
However, the higher price has not been sustained and OCEAN is trading at $0.38 at press time. This is a 987% increase from the price on January 1st.
Similar to BAND, the bullish structure of OCEAN, namely the ascending support line, has been broken. Furthermore, this happened after OCEAN tried to make a new all-time high but failed to do so.
These are both signs of weakness that could indicate that the OCEAN uptrend is over and a significant correction awaits.
Towards new heights
The cryptocurrency sector is well known for its sharp price spikes and falls. These movements have spawned a whole group of enthusiasts who are passionate about cryptocurrencies for their significant upside potential and a group of detractors who scorn the crypto sector for its risks. related to these frenzied price movements.
One interesting observation is that the biggest gainers hit their highest levels of the year in August-September, before falling. However, some of them have continued to hit new highs in December. If their structure holds, they may not have reached their peak yet.
Also, it should be noted that after such a significant upward move, the next strong downward move should not come as a surprise. This has been illustrated in the case of BAND and potentially OCEAN.
This is especially likely if the bullish structure fails to hold such as the parabolic movement in AAVE, as due to the rapid rise there is no strong support near the current price level.