Last week in the news
Bitcoin lost some 10% in value during the week amid sell off after reaching ATH around $69K. Market was mostly driven by the futures market where market sentiment was on a side of predominantly short positions. Ether finished the week above $4.3K level.
Bitcoin Taproot, a BTC`s biggest upgrade in the last four years, was successfully implemented on Sunday last week. The aim of this new upgrade is to provide improvement in coin`s network privacy, scalability and security, as well as decrease of transaction costs. It is also important, while it might open a door for BTC to the DeFi world potentially in the future. However, analysts are of the opinion that this might occur within the next couple of years. For the moment, Ether is still the number one coin when DeFi is in question, while BTC is perceived as a store of value coin.
Square released white paper on Friday, in which the company has provided more detailed information regarding the new tbDEX protocol. Aim of this protocol is to make exchange of the digital assets, as well as “fiat money or real world goods” more socially trustable, decreasing in this way transaction risks. As written in the paper tbDEX protocol utilizes “ decentralized identity (DID) and verifiable credentials (VCs).
In an interview with CNBC, Michael Saylor, CEO of MicroSTrategy well known for his investments in BTC, shared his view that in the battle for a non-sovereign store of value, BTC have already outperformed Gold and Silver, as traditional commodities for hedging against inflation. He also sees Bitcoin as a future “world monetary index” as of the end of this decade.
The U.S. Justice Department announced that it will sell off crypto currency worth $56 million as part of the liquidation process of BitConnect, a Ponzi scheme offshore lending program. This money will be used to cover some of the losses incurred by the scammed people through this scheme.
Crypto market cap
Futures market shortening of positions have pushed the crypto market into red during the previous week. It started a market short term correction, after the crypto market capitalization reached a new ATH at level of $2.8 trillion two weeks ago. Total crypto market cap dropped by 7% on a weekly basis, reaching $2.62 trillion. Daily trading volumes remained at relatively the same level as week before, moving around $250B on a daily basis. Total inflow from the beginning of this year stands at $1.83 trillion, which is an increase of 231%.
Previous week the majority of crypto currencies finished in red. Market correction was driven by the most popular coins which lost the most. Bitcoin`s market capitalization was down by 8%, losing $98B in a single week. BTC is followed by Ether who lost some $34B or 6% in value. Binance Coin was also down by 7%, decreasing market cap for $8B. At the same time Solana decreased its market cap by almost $9% or $6B. In terms of total circulating supply, Tether lost 1,1% on a weekly basis, reaching total $73.05B of circulating coins as of the end of week.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Crypto futures market
Futures market was following the spot market during the week. However, based on the opinion of some market analysts, it could be said that rather the spot market was following the futures market, initiating drop through increased demand for short BTC and ETH futures.
In line with the spot market, both BTC and ETH futures have finished week at prices which are lower from a week before. BTC futures were down by some 10%, where December 2022 was still holding above $61K. At the same time ETH futures were down by some 8%, with the highest drop for maturities in April 2022 of some 14%. December 2022 was traded at $4.500.
Table below provides the most recent information on BTC and ETH future prices.
Bitcoin: correction is over, or most likely not?
During the previous week BTC fell some 10%. This move was mostly driven by the futures market, where predominant trading was on the short side. On the other hand, there are analysts who are pointing that use of high leverage contributed to the latest drawback in price, as traders were liquidating part of their long positions in the BTC. Good thing is that the vast majority of investors are still long in BTC, in which sense, no actual sell off occurred.
Short term price correction occurred after BTC reached new ATH at $69K two weeks ago. Previous week BTC started by testing resistance line at $65K, but without a strength to go beyond this level, coin reverted back to the support line at $60K, and broke it on one occasion down to level of next support at $55K. As of the week end coin reverted back to test resistance at $60K. This move was expected as a major longer term correction. There are analysts who are pointing that this might be the start of a major BTC reversal, down to levels of $48K, however, it will take some time until such a move occurs.
Looking at the shorter time frame, RSI went down to the level of 38. This is not a clear indication of an oversold market, but it indicates that there is some probability for further price pressures on the downside until a clear oversold market is reached. MA50 line is modestly slowing down its divergence from MA200 counterpart. Strong support line at $60K has been broken, but the market continued to test it from the downside.
Level to watch during the next few days is $60K. In case that market makes a clear move above this line, then it will head toward next resistance at $65K. There is currently low probability for this line to be broken, but might occur only in case of strong fundamental news. In case that $60K is not broken, BTC will head toward the support line at $55K, with decreased probability that it might reach next support at $50K.
Ether: broken channel on downside
For the last few weeks Ether was pushing price strongly to the upside, reaching new ATH`s on a weekly basis. This was supported by Ethereum's strong presence and potential in the DeFi industry. However, during the last week, the upside channel which started at the end of September has been broken on the downside, indicating the start of a short price correction. However, major support line at $4K was holding during the previous week, indicating that Ether continues to hold attention of investors.
Technical indicators have still not reached a clear oversold market. Moreover, RSI swiftly moved back to the level of 50, after modestly reaching 40. At the same time MA50 continued to diverge from MA200 line. Ether finishes this week testing short term resistance at $4.460. This level was ETH`s ATH in May this year. In case that this level is broken during the next few days, then ETH`s next target will be $4.8K and potentially current ATH. However, there is also a high probability for $4K to be tested once again in the coming days. In case that it is broken, ETH will make a move toward the next support line at $3.6K, but there is currently lower probability for such a move.
Ripple: back on starting line
In line with general market trend, XRP made a move to the downside, reaching its starting point at $1.0 support line. Currently, it is actually good news, considering that the coin did not make a move below this level, toward long term support at $0.9. Taking into account that the last three bottom peaks, as of the end of September at $0.86, as of the end of October at $0.96 and latest at $1.0, are standing at higher levels from each other, in technical analysis this indicates that the coin is actually at short term price correction in its longer term move to the upside.
Current charts are showing that RSI did not reach a clear oversold market, instead it reverted to the upside, modestly below level of 50. Support line at $1.0 has not been broken, but XRP reverted to the upside. XRP is currently traded around $1.09. At the same time moving average oscillators are continuing their divergence from each other.
Level to watch within the next few days is XRP`s starting point at $1.0. There is currently a lower probability that this level will be broken on the downside. Just in case XRP makes this move, the price will reach a long term support line at $0.9. There is currently a higher probability that XRP will try to reach some of previous levels, where the coin might target the $1.2 resistance line.
Binance Coin: short break before new ATH?
After a few weeks of strong upside price moves, which led BNB to the old ATH, during the previous week the coin entered into a short term correction. Price went down to the support line at $520, but very soon it recovered and headed toward $600, where it is currently traded.
Current charts are showing that BNB is still not ready to give up from its higher grounds. RSI made a move down to 40, not providing indication that a potential oversold market is in store for this coin. At the same time, oscillators of 50 and 200 days average price moves are continuing their divergence from each other. This all adds to the probability for BNB`s potential move toward the resistance line at $630. If this line is broken, then the coin will certainly head toward ATH level. It cannot be said with certainty if BNB will try to break its old ATH within the next few days, but in a relatively longer time frame, this hypothesis might hold. On the opposite side, in case that $620 resistance is not broken on the upside, BNB will revert back to the support line at $520 to test it one more time.
Cardano (ADA): struggle around $2.0 continues
After almost two months struggling to hold above $2.0, during the previous week, ADA finally broke this level but to the downside, reaching its lowest weekly level at $1.70. However, it did not affect ADA to move back to levels modestly below $2.0, as of the end of the week. It seems that the coin is continuing with its determination to be valued at $2.0.
During the week RSI moved down to 33, but a clear oversold market has not been reached. MA50 continues its modest convergence toward its MA200 counterpart. This might be an indication of potential cross between two lines, but at this moment there is still some space between them.
ADA is currently heading toward $2.0, now the resistance line. Based on historical moves, there is a high probability for coin to hold around this level in the coming days. Whether it will have market strength to break it, it will be revealed in the coming days. In case of a move to the opposite side, ADA might test once again the $1.85 support line.
LINK: $30 is a target, again
During the previous week LINK was following the general market trend, and the coin reverted to the downside and level of $25 support line. Coin is finishing this week around level of $28. Although RSI made its strong move from 60 down to 34, a clear oversold market has not been reached. The golden cross from the beginning of November is still holding, as MA50 continues its divergence from MA200. At this moment technical analysis is not suggesting that LINK entered into reversal, but rather into short term correction, until its renewed move to the upside.
Charts are suggesting increased probability for LINK to continue its move toward the $30 resistance line. There is also lower probability for this line to be broken on the upside, but in this case, it will open a path for LINK for a move toward $32. In case that $30 resistance is not broken, LINK will revert toward the $25 support line, with a low probability that $20 will be tested in the coming days.
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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