The Bullish Loopy-Doopring Structure and Downside Risk (LRC)
Newer crypto buyers are given a lot of criticism for not looking at token supply or market cap. A coin's market cap is calculated by multiplying its circulating supply by the price. As I just did with CRO, this can help make some comparative market analysis to try and figure out what the "fair value" of something is. This is a concept that exists in other markets, such as real estate, but can be applied to this market in order to make "educated" price predictions.
Here's my reasoning. Loopring has about 10x the supply as Omisego (OMG), and is currently ranked higher in market cap. LRC has close to 1.4 Billion coins. This is somewhat of a similar token supply to Uniswap (UNI), which has 1 Billion coins. Uniswap is currently trading at just above $20. So, perhaps, LRC can achieve a price target of $10+ if it breaks into the top 20 by market cap. But I do not think this would be likely to sustain. See OMG from the 2018 peak. These coins have similar use-cases, but LRC seems to have gained a lot of attention recently. OMG faded into obscurity during the bear market and dropped by as much as 99% in value from $30 to $0.30. Yeesh!
INTERESTINGLY ENOUGH, LRC's recent peak is pretty close to Omisego's 2018 peak, in terms of market cap. Can a layer 2 coin like this achieve a higher market cap? Not so sure. I don't doubt that the protocol is useful, but does the token itself have much value? The ascending broadening wedge on my chart shows expanding volatility as price goes up. It is very rare for something to break out of an ascending broadening pattern to the UPSIDE, but should LRC breach the resistance, it can perhaps make one last run towards $10-20. Otherwise, LRC is in danger of falling significantly back towards the middle of the wedge at least, putting it back in the low $1 range. There is shallow support near $1.90 as well.
Perhaps LRC can also test the top of the wedge again at a later date (marked by a speculative green X), at a slightly higher price, once things have cooled off a bit. Holding current levels would also be a good sign, since this is the 2017 all-time high. But one issue here is - even with all the GME-like hype and excitement, it's only resting at the previous ATH? It managed to get to this point in the last bull market for apparently no reason at all. Crypto never ceases to amaze.
So far, this bull market has been relatively tame compared to 2017. For instance, XLM went from 1 cent to 90 cents in just several weeks back then. Let's see what happens!
This is meant for speculation and entertainment only, not financial advice.
-Victor Cobra
Here's my reasoning. Loopring has about 10x the supply as Omisego (OMG), and is currently ranked higher in market cap. LRC has close to 1.4 Billion coins. This is somewhat of a similar token supply to Uniswap (UNI), which has 1 Billion coins. Uniswap is currently trading at just above $20. So, perhaps, LRC can achieve a price target of $10+ if it breaks into the top 20 by market cap. But I do not think this would be likely to sustain. See OMG from the 2018 peak. These coins have similar use-cases, but LRC seems to have gained a lot of attention recently. OMG faded into obscurity during the bear market and dropped by as much as 99% in value from $30 to $0.30. Yeesh!
INTERESTINGLY ENOUGH, LRC's recent peak is pretty close to Omisego's 2018 peak, in terms of market cap. Can a layer 2 coin like this achieve a higher market cap? Not so sure. I don't doubt that the protocol is useful, but does the token itself have much value? The ascending broadening wedge on my chart shows expanding volatility as price goes up. It is very rare for something to break out of an ascending broadening pattern to the UPSIDE, but should LRC breach the resistance, it can perhaps make one last run towards $10-20. Otherwise, LRC is in danger of falling significantly back towards the middle of the wedge at least, putting it back in the low $1 range. There is shallow support near $1.90 as well.
Perhaps LRC can also test the top of the wedge again at a later date (marked by a speculative green X), at a slightly higher price, once things have cooled off a bit. Holding current levels would also be a good sign, since this is the 2017 all-time high. But one issue here is - even with all the GME-like hype and excitement, it's only resting at the previous ATH? It managed to get to this point in the last bull market for apparently no reason at all. Crypto never ceases to amaze.
So far, this bull market has been relatively tame compared to 2017. For instance, XLM went from 1 cent to 90 cents in just several weeks back then. Let's see what happens!
This is meant for speculation and entertainment only, not financial advice.
-Victor Cobra
Comment:
Currently resting near the 2018 ATH. If it can continue holding this level, perhaps LRC tries to make a new high near $4, but I think it might have some problems at the trendline resistance.
Comment:
If we look at LRC/BTC, it's still substantially down from the 2018 ATH. A break below the pink support level can send it back to some serious lows on the ratio. The next major resistance is marked by the green horizontal level. If Bitcoin goes on another run soon, I think the pink could easily be tested before any attempt is made at new highs.
Comment:
Welp, here it is, at the middle of the broadening wedge. This is a decision point. The r/r seems way better here for buying, but as I mentioned, this project reminds me a lot of Omisego. The downside risk is a little less here, with some potential upside towards the $6 area, should the rest of the market cooperate. Unfortunately, ETH itself broke its long term uptrend and looks fairly weak. There will probably need to be some sort of catalyst to get the market going again.
Comment:
I'll also mention - the hype surrounding the "announcement" around New Years was a huge red flag to me - especially when it turned out to be a nothing burger. Reminds me of Verge (XVG) from the last market cycle. Every cycle, a bunch of people get sucked into something with a huge amount of hype, and they ignore the red flags. For instance, LRC can easily be an unregistered security due to its inception in the form of an ICO. Additionally, it's a Chinese project - and China is really trying its best to tame crypto. They want to use the tech, but also feel threatened by it if its not regulated.
