Last week in the news

Markets continue side trading in expectation of new inflation figures during the following week. At the same time FED officials said that inflation is still not at its peak level, which implies possible further FED's rate hikes. Bitcoin was testing $30K but ended the week below this level. Ether is still below psychological $2K.

Latest labor figures in the US are showing modest improvements in the number of newly employed people, adding 390.000 jobs in May. Unemployment rate remained flat in May at 3,9%. At the same time, Cleveland FED President, Loretta Mester, stated in an interview that as inflation has not peaked, she supports aggressive FED's policy.

News is reporting the current trend among crypto companies to decrease the number of employees within companies and sectors in general. This comes as a result of the downtrend on the crypto market prices and run of investors in fear of inflation. During the previous week Gemini announced layoff of 10% of its staff, Coinbase will extend their halt of new employment, while Elon Musk is planning also 10% of employees to be displaced from Tesla.

Not so nice news for crypto miners is coming from the US state of New York. Namely, lawmakers in this state passed the law by which crypto mining business which is based on carbon-usage sources of power will be banned from operations in this state.

CNBC conducted research among crypto professionals over the future expectations from the crypto industry and coins. Since there are currently 19.000 coins existing on the market, major expectations from few professionals is that they will not all survive, in which sense sort of seizing on the crypto market might be expected in the future period.

Based on statements from SEC officials, there is probably not going to be any sort of penalty for Do Kwon, founder of the Terra stablecoin project, which imploded recently and made a loss of $60 billion, when Luna coin reached $0. As it has been stated, it is hard to prove that in this case there has been clear fraud intention, however, there is high probability of private lawsuits by investors.

Solana suffered another outage on Wednesday due to the bug in the blockchain processes. After four hours Solana Labs announced that the problem was solved, but during these times it was not possible to trade or exchange SOL.  

Crypto market cap

Regardless of modest increase in market cap during the previous week, markets still continue to trade sideways. The main reason for this continues to be fear of inflation among market participants which would put pressure on FED to further increase interest rates during the course of this year. There had been some comments in the news from FED officials, stating that inflation has still not reached its peak, in which sense, further moves from FED are necessary in order to bring inflation down to the targeted level of 2%. In the current circumstances of high geopolitical risks, surging oil prices and disruptions in supply chains, targeted levels might be a challenging task. Crypto market capitalization ended the week 1% above last week`s level, which was a minor move from $1.19T up to $1.20 trillion. Daily trading volumes remain relatively lower, moving around $135B on a daily basis. Total outflow from the beginning of this year is near $1B, which is a decrease of 45%.

Modest increase in crypto market capitalization during the previous week was mostly led by BTC. Coin managed to increase its market cap by $14B or 2.5%. Altcoins were traded in a mixed manner but majority ended the week trading sideways. Among higher gainers was Cardano with increase in market cap by $3B or 21%. On the other hand, Solana was on a loser side due to suffered outage, with decrease of $1.5B or 10% in market cap. Tron had a modest decrease in market value of 3%, however, at the same time the coin decreased its circulating supply by 5%.

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

Crypto futures market

Crypto futures market continues to trade sideways, following developments on the spot market. During the previous week there have been some movements to the upside, however, they could not be treated as significant signals regarding market expectations on the future levels of both BTC and ETH. For both coins expectations for the end of this year remained relatively unchanged compared to the end of the previous week. ETH managed to reach $2K, while BTC is modestly above $30K.

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

Bitcoin: all eyes are on Friday`s inflation report

Inflation continues to be a major preoccupation of investors on financial markets. Latest signals from FED are not pointing that peak is near, which puts investors in a position to hold while positioning waits for the right signal from FED. In this sense, Friday would be a day to watch as the US inflation rate will be posted.

Bitcoin started the previous week in a positive mood. Coin started the week with price push up to the level of $32.3K in a quest for short term resistance of $33K. However, as of the weekend, the market turned to the downside, where BTC finished the week at levels modestly below the $30K support line. On a positive side, this line is currently tested, but it still has not been clearly breached. RSI was pushed to the level of 50, but still, the market did not make a break, so the road to the overbought market continues to be on hold. Moving averages of 50 and 200 days continue to move with downtrend, with MA50 modest divergence from MA200.

Currently important indicators for markets will be posted on Friday, so this will be a day where major moves on the market are possible during the following week. In this sense, some level of precaution is advised. BTC is still holding at $30K support line, but negative fundamentals might impact its further push to the downside, first to the level of $28K which would then open a road for BTC toward $25K next support line. Still, there is an equal probability for the price to return to the level of short term resistance at $33K, in case of positive market sentiment, which would depend on Friday`s inflation results.

Ether: recovery under question            

Bad period for ETH continues for the third week in a row. Resistance line at $1.950 has been tested during the week, when the coin reached the $2K psychological line, however, there has not been market strength to push the price above $2K, so the coin returned to the levels from the beginning of the week. ETH is finishing the week around $1.780 and testing the $1.750 support line.

During the week RSI was pushed from the oversold zone up to the level of 43. However, the mark line at 50 has not been reached, so for the moment it remains questionable if the market is ready to head toward the overbought line. MA50 started stronger divergence from MA200 counterpart, although both lines are moving with strong downtrend.

Same as with BTC, it can be expected that ETH will follow general market sentiment in a week ahead. Since the market is currently set on inflation data, Friday might bring major moves for ETH also. This puts ETH future price moves under two options. If the market perceives news as a positive, ETH`s price would probably move again up to $2K, with decreased probability that the $2.1K resistance line could be tested. On the opposite side, if the current support line at $1.750 is breached, then ETH will be on a road toward $1.520 next support line, but such move currently has low probability.

Ripple: can $0.4 support hold?              

XRP continued its sideway trading during the week, still holding around $0.4 support line. Although this might look like positive news, on the second look, the question emerges for how long can $0.4 support withstand the selling orders pressure?

During the week XRP tried to push the price to the upside, but it managed to reach only level of $0.43 on a short occasion, after which price returned to the level of support line, while coin is finishing the week modestly below this level. RSI is moving slightly below 40, not providing indication that clear reversal is ahead, after the coin reached oversold territory two weeks ago. MA50 started its higher divergence from its MA200 counterpart, while both lines are moving with clear downtrend.

Selling orders are currently dominant orders for XRP. This puts into question sustainability of the current $0.4 support line. If the coin manages to hold this line, there is a probability that it will revert to the upside in order to test the next short term resistance line at $0.45. However, if higher selling orders emerge, then the price might be pushed further to the downside to the level of next short term support at $0.35.

Binance Coin: reversal is on hold

BNB started the previous week with another push of price to the level of $330, however, another week in a row the coin did not manage to break this level on a road to the resistance line at $350. Weakness of the market for such a move has been caused by negative signals from the FED. Coin finished the week testing support line at $300. At the same time daily trading volumes have decreased with mixed both selling and buying orders.

Second week in a row RSI is reaching breaking point at 50, but again indicator did not manage to break above this line, which would be indication that market has started a move toward overbought territory. For the moment, clear reversal is on hold. Moving averages of 50 and 200 days still continue to move as two parallel lines with clear downtrend.

Charts are indicating that BNB`s price is currently on a cross road. On one side, there is an open path toward the $250 support line where the coin last stood in May this year. On the other hand, if $300 support manages to hold, then the coin will probably try to reach $330 one more time on its road toward the $350 resistance line.

Cardano (ADA):  too early for optimism?

Finally one good week for ADA, after the last two months of struggling with the down trend.  Although it looked like that coin managed to start a reversal, still a road toward an overbought market continues to be on hold. Regardless of indicators, ADA managed to recover some of the previous losses, adding $3B to its market cap and moving the price from $0.45 up to $0.55 resistance. Highest level reached during the week was $0.68 on one occasion.

During the week, RSI was pushed modestly above the 50 level, but as of the weekend it returned back below the 50 line. It shows that the market still does not have strength to head the price toward the overbought territory. Moving averages of 50 and 200 days continue to move as two parallel lines, not providing indications regarding next potential price moves.

Last week showed that there is market interest for ADA, as the price was pushed to the levels modestly below the $0.70 resistance line. There is some probability that this line might be tested once again in the coming week. However, in case of negative market sentiment in a week to come, there is equal probability that ADA might revert shortly back down to the level of $0.50 support line.

LINK: without strength for $8 resistance?

It was an interesting week for LINK. Although trading volumes had significantly increased, still LINK was holding strongly to the sideway. Price was modestly pushed from level of $6.2 up to $7.7, ending the week around $7.3. It seems like LINK is trying hard to remain at current levels. Long term resistance line at $8 has not been tested during the week.

During the week RSI reached level of 45, however, market strength was weak to indicate that it has started a clear reversal after the oversold market reached two weeks ago. Break of 50 line and clear path toward overbought market is still on hold. Moving averages of 50 and 200 days are not adding to the probability of next moves, considering that they continue to move as two parallel lines.

Long term resistance line at $8 has not been tested during the previous week, so it remains a target for LINK in weeks to come. However, in a case of a negative market sentiment price might be pushed to the support line at $6 to test it one more time.


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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