Last week in the news

Pre-holiday trading week ended with investor’s concerns over inflation as well as earnings outputs for the first quarter and rising US long term Treasury yields. US and EU equities finished the week in red, Bitcoin is ending the week above $40K, Ether above $3K.

March US consumer price index of 8.5% increase on a yearly basis, outputted on Thursday, outperformed market expectations. Another issue for the US economy is that supplier prices gained 11.2% y/y in March, implying on further inflator pressures in the US. Inflation fears made an impact on equity markets as well as the crypto market. Investors are now turning from growth assets toward ones with more stability. On the other side there are FED officials who are publicly noting that the next 50bps interest rate increase might occur in May, with possible more hikes in June and July.

Regulators of many countries are turning to higher regulation of the crypto market and businesses around it. This is one of comments from Binance CEO, Changpeng Zhao, in an interview with CNBC last week. He also sees that regulators switched their sentiment for crypto currencies from negative to positive.

The legal dispute between Ripple and the U.S. Securities and Exchange Commission might soon be over as per expectations of Ripple CEO Brad Garlinghouse. Namely, 15 months ago the SEC accused Ripple officials of breaking the securities law by their offer of XRP token. On the other hand, Ripple officials were taking the stand that XRP is crypto currency and not a security. Since the start of the dispute, the market is closely watching developments. In case that court rules out that XRP is a security, it will have severe implications on many other tokens issued in the US.

Banco de Portugal issued its first license to a Bison Bank to offer custody and trading services in crypto currencies. For this purpose Bison Bank will open a new division within a bank, Bison Digital Assets, which will provide its services through virtual asset exchange. There are already two crypto exchanges operating in Portugal, Criptoloja and Mind The Coin, while Bison Bank will be the first commercial bank to offer crypto trading services.

Crypto market cap

High inflation figures and forthcoming earnings output for the first quarter have decreased investor’s confidence in pre-holiday trading. Total crypto market capitalization finished the previous week at a level of $1.84 trillion, which is a decrease of $100B or 5% compared with the end of the week before. Two major coins, Bitcoin and Ether, participated with $70B in this decrease, while the rest is spread mostly on leading market altcoins. Daily trading volumes were relatively flat compared to the week before, moving in a range of $150B up to $160B on a daily basis. Total outflow of the funds from the crypto market since the beginning of this year currently stands at $342B or 16%.

Decrease of total crypto market capitalization during the previous week was led by major coins. Bitcoin lost $44B or 5.5% in market cap, while Ether was down by $25B or 6.5%. Altcoins which lost the most during the week were Solana, with a decrease of $2.5B or 7%, Binance Coin which was down by $1.5B or 2% and Polkadot with a drop of $1.3B or almost 7%. On the other hand, few altcoins gained during the week, like Ripple, which added $0.5B or 1.2%, Bitcoin Cash managed to increase market cap by 5%, and surprisingly, EOS was up by more than 6%. Despite the drop in market cap, Solana increased its coins in circulation by 1.6% on a weekly basis, followed by Filecoin, with an increase of 2.7%.

The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.

Crypto futures market

Second week in a row crypto futures were traded lower. During the previous week both BTC and ETH short term futures were traded down by some 7%. BTC futures with maturity December this year were traded 6% lower, where price dropped to $42K, down from $45K where it was traded week before.  December 2023 was also down by 5% and traded around $46K.

ETH long term futures were also traded lower, but it is positive that the price was still holding above $3K. Maturities in both December this year and next year were down by 5%, traded around $3.2K and $3.4K respectfully.

Table below provides the most recent information on BTC and ETH future prices.

Bitcoin: $45K probably improbable

Latest figures of economic output in the US are showing that inflation is currently not on the road to slow down in the coming period. Market is already set for further increase in interest rates and its potential impact on earnings of US companies. On the other hand, monetary pulling of liquidity from the market will inevitably have an impact on financial markets, including the crypto market and Bitcoin as its major coin.

Short term support line at $42K was the starting point for Bitcoin during the previous week. Already at the start of the week market pressures to the downside pushed the price below this level, down to the support line at $40K. These pressures continued during the week. Although the weekly lowest price reached was $39.2K, still the $40K support line managed to hold. BTC is finishing the week modestly above this level.

During the week RSI indicator has been pushed to the downside and level of 35, indicating that the market is currently looking at the oversold side. Indicators continued to move around the range of 35 during the week, however, a clear oversold market has not been reached. Moving average of 50 days continued its modest convergence toward its MA200 counterpart, but still these two indicators are moving at a safe distance.

Following the trading week BTC will open at a $40K support line, considering the holiday season on west markets. If this level sustains current pressures, coin will revert back to short term resistance at $42K. Indicators are pointing that market is eyeing oversold territory, which decreases probability that next resistance at $45K might be reached during the next week. On the other hand, current charts are also pointing to decreased probability that the next support line at $35K might be reached, so in case that $40K support line is breached, higher probability is that BTC will stop around $38K short term line.

Ether: finding support at MA200

Although second week in a row selling orders are prevailing on the crypto market, positive development is that ETH price manages to resist pressures and holding above $3K psychological line. Previous week ETH started around $3.3K resistance line, and swiftly turned to the downside under market selling pressure, reaching $2.945 as lowest weekly level. Psychological $3K has not been broken, so ETH is finishing the week modestly above $3K. At the same time, the coin`s price found support at MA50 line.

RSI was pushed to the level below 50 line, however, it continued to move between levels of 40 and 50. Market is eyeing the oversold side, but still indicators stand above this level. Moving average of 50 days is continuing with its modest convergence toward MA200 line, serving currently as a support line for ETH price.

ETH is ending this week with prevailing selling orders around $3K, but this level is still holding. In case that it is broken to the downside, then the next target for ETH will be the $2.850 support line. Considering that price movements to the downside stopped at MA50, it increases the probability that ETH will manage to hold above $3K in the coming period, with probability that the coin will make another move toward $3.2K eventually $3.3K resistance line.

Ripple: supported by positive news        

Week started with negative sentiment for XRP, but the weekend was supported by the positive news regarding Ripple`s dispute over SEC. At the beginning of the week XRP made a price push from $0.75 resistance line, down to weekly lowest level at $0.67. Within the course of the week, XRP was supported with positive comments from Ripple`s CEO that after 15 months of legal dispute with SEC, he is expecting a positive outcome for this company. Coin swiftly returned to previous levels, ending the week testing $0.75 resistance line.

At the start of the week RSI was pushed down to 32 but clear oversold size has not been reached. RSI is ending the week at 50 level, which is pointing out that the market still weighs both news and which side to take. Moving averages of 50 and 200 days are continuing their convergence slowdown, moving currently as two parallel lines.

It was positive for XRP that the $0.7 support line managed to hold during the previous week, and has not been clearly breached. It indicates that buying orders start to emerge at this level. On the opposite side, the resistance line at $0.75 has been a sort of equilibrium point for XRP for the last two weeks. Market will continue to test this level during the coming period. In case that there is no strength to clearly break it, then the coin will most probability revert back toward $0.7 support. However, in case that $0.75 is broken to the upside, the next stop for XRP will be $0.77 and finally $0.80 as a next resistance level.

Binance Coin: lower volatility is holding $420 resistance

In line with general market sentiment, BNB started the previous week turning to the downside. During Monday and Tuesday coin headed toward levels below $400, reaching $391 as a weekly lowest level. BNB started Wednesday at levels modestly above $400. Although the coin tried to get back to the resistance line at $420, it has been tested only on a few occasions, and the coin ended the week around $414 level.

It was interesting that RSI was modestly pushed down to the level of 40 and swiftly returned to oscillate around 50. This is indication that the market has still not decided whether it is time for BNB to look at oversold territory. At the same time, moving averages of 50 and 200 days continue to move as two parallel lines, confirming that the market is still not ready to make a final decision regarding side.

Considering that selling orders around current levels are still on the market puts some pressure on the $400 line. In case BNB continues its corrective path, there is some probability that the support line at $380 might be tested in the coming period. There is also an equal probability for $420 to be tested one more time in the coming period.

Cardano (ADA):  mixed signals continue

Previous week ADA started at $1.0 support line, which was quite easily breached to the downside. Coin headed toward the next support line at $0.9 which was tested during the week. ADA was following general market sentiment on the crypto market during the previous week, but as many coins swiftly returned to their previous levels during the course of the week, ADA continued with testing $0.9 support.

RSI was pushed down to 38, but continued to oscillate around this level. It seems like that market is looking at an oversold market but still is not ready to reach this territory. On the other hand, moving averages of 200 days are moving faster toward MA50, then the opposite. Nevertheless, two lines are still keeping a solid distance between them.

Two weeks ago technical analysis for ADA showed some mixed signals, while they are still in place for this coin. It is clear that the coin does not have strength for a push to the upside, in which sense, $0.9 will probably be tested also in the coming period. Charts are pointing toward $0.8 as the end of the latest reversal cycle, but it also shows that it is still a bit early for this level. There is a probability that ADA will test the $1.0 resistance line in the coming period, considering that it has not been clearly tested during the previous week.

LINK: price might go lower from here?

LINK started the previous week around $15 support line but by following general market trend, coin reverted to the downside and toward next support line at $13. This line has not been clearly tested during the week as the market slowed down modestly above this level.

Moving averages of 50 and 200 days are continuing to move as two parallel lines for some time now, not providing much indication over the potential price moves in the coming period. During the previous week this was also supported by the RSI, since the indicator went down to 36 and reverted a bit back, like that market is putting the oversold zone aside at this moment.

Considering that the $13 support line has not been tested during the previous week, it increases probability that the market will start with this action during the next week. Good news is that this level is at the end of the latest reversal moves, which supports the probability that the price will not go lower from this level. On the opposite side, there is a probability for the $15 resistance line to be tested once again.

Disclaimer: This article provides exclusive views of the author. It does not in any sense represent a suggestion for trading.

This Market Analysis has been published by a staff writer at XBTFX.

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