Last week in the news
Another week on financial markets was led by uncertainties from the spread of a new virus variant. The U.S. stocks ended the week in red, while the crypto market was holding relatively flat. However, early Saturday trading brought a major sell off on the crypto market, bringing BTC down to $42K before rebound to $48K. Ether followed the general Saturday trend, falling down to $3.5K, finishing the week above $4K.
As CoinDesk is reporting, the major cause behind Saturday`s drop in crypto market is trigger of stop loss in the derivative markets, more concretely, a BTC futures market. Laurent Kssis, director of CEC Capital has noted that sale of 4.000 BTC has pushed the market on the down side, where 1.500BTC was “sold in less than a minute”. On the other side, some investors are positioning to buy on a dip. El Salvador`s President Bukele already announced on Twitter that the country has bought additional 150 BTC at current prices.
The U.S.Treasury is changing its rhetoric regarding inflation developments in the U.S. economy. Until recently inflation figures were treated as “transitory”, however, last week FED Chair Jerome Powel did not sound too optimistic when it comes to short term inflation pressures. However, he generally noted that increase in prices is related to the pandemic, in which sense, it might take much longer than initially predicted for the world economy to recover.
During the previous week Jack Dorsey, CEO of Twitter, stepped down from his top management position in this company. He will continue to sit as a CEO of Square company, which will change its name into Block, as of December 10th. As a reason for stepping from Twitter, Dorsey noted a need to focus on further building of Square`s portfolio. It has been also announced that Square Crypto, a subsidiary of Square, which is focused on Bitcoin, will now change its name to Spiral. Rebranding a company under a new name will not change its current focus to “increase access to the economy” as Dorsey said.
This year’s Black Friday was celebrated by PayPal as the company managed to increase the volume of transactions on the “buy now pay later” platform by 400% compared with last year's shopping holiday. Referring to crypto currencies, where PayPal is since recently involved, Dan Schulman, CEO of PayPal commented that crypto currencies, NFT`s and DeFi`s are much more from simple paying means. He is much more interested in their “incremental utility” in the future.
Five new exchange traded cryptocurrencies will be listed at the Frankfurt stock exchange during this month, as per announcement from ETC Group from U.K. New ETC`s will be Polkadot (PLKA), Solana (ESOL), Stellar (STLR), Tezos (EXTZ) and Cardano (RDAN). Products will be distributed by HANeft.
Crypto market cap
Although the last two weeks on financial markets were led by uncertainties from the spread of a new virus variant, major developments on the crypto market were on Saturday, where drop was led by trigger of stop loss in the BTC futures market. After a major sell off on Saturday early trading, the market soon rebounded but at lower levels from the end of the previous week. Total crypto market capitalization is finishing week at $2.23 trillion, or 10% lower on a weekly basis. Latest drop was mostly driven by Bticoin, although the majority of altcoins lost some value. Daily trading volumes were increased on Saturday, reaching $360B, though during the week average daily volume was moving below $200B. Total inflow from the beginning of this year currently stands at $1.43 trillion, which is an increase of 181%.
Total decrease of the crypto market capitalization was some 10% w/w or $230B as of Saturday. Sell off was driven by Bitcoin who lost more than 12% of value on a weekly basis or $125B. Ether is finishing the week with a loss of some $10B in market cap or 2%. Majority of other altcoins are also finishing the week in red. However, several coins gained during the week. Tether surged 1.4% w/w, reaching $74B in market cap. Tron had interesting developments since coin increased circulating supply by 42%, and regardless of drop in price, total market cap was increased by almost $2B. Polygon managed to increase its market cap by 18% through increased price.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Crypto futures market
Futures market finished the week in a mixed mode. It should be considered that futures markets are closed over the weekend, in which sense, Saturday moves are still not fully priced in Friday`s futures. Monday should be a day to watch to see actual current levels of the futures for both BTC and ETH. At Friday's close, BTC futures were down by 1%, with the highest drop of 10% on a weekly basis for maturities in April 2022. On the other side, ETH futures finished last week around 3% higher for short term maturities and some 5% higher for maturities during next year.
Table below provides the most recent information on BTC and ETH future prices.
Bitcoin: counting on dip buyers
Bitcoin is a great asset but you need strong guts to hold it. Saturday was a day when certainly many investors on the crypto market were reminded of this crypto mainstream saying. Although Friday was more on a bearish side, a major dip occurred on Saturday, when BTC reached its lowest level at $41.9k. Quite soon BTC recovered to the level modestly below $50K, where it is currently traded. As per initial market analysis, such a strong price move occurred due to trigger of stop loss in the BTC futures market. This move also points out that the BTC derivatives market is certainly over leveraged, which might trigger similar moves also in the future. At this moment, BTC is heavily counting on dip-buyers on the market to recover its price to previous levels.
Current charts are showing that a clear oversold market has not been reached despite strong move on downside, considering that RSI is still holding modestly above 30. On the other side, moving average oscillators began to slow down, where MA50 reversed its divergence to convergence toward its MA200 counterpart. There is still a safe distance between two lines in which sense; cross is not to be expected within a short period of time.
BTC is now testing a resistance line at $50K. Dip-buyers might support BTC to break this line in the coming days. In this case, the next stop for BTC will be resistance at $55K. There is currently a lower probability that BTC will go higher from this level in the next few days. However, if we take a look at a wider historical time frame, there is a significant support line at $48K. This would be the line to watch in the coming days. There is a high probability that BTC will test once again long term support at $48K. In case that BTC does not find strength to hold above this line, then it will head toward $45K support.
Ether: $4K under pressure
After two weeks of stronger volatility and some pressure on the downside, ETH was managing to hold price above major support line at $4K. Saturday sell off has pushed price down to $3.4K, however, coin managed swiftly to return to levels above $4K. Regardless of such a swift recovery, current charts are showing that pressure on $4K support line still holds for ETH.
Moving average oscillators of 50 and 200 days are continuing to slow down their divergence from each other, however, they still hold distance. With the latest move, RSI went down to 40, where indicator is not providing much information regarding potential for oversold market to occur. At this moment, ETH is trading around $4.1K, testing a major support line at $4K on downside. The question is if this support line can hold in the coming days? In case that ETH resists the support line, then it will certainly move to test resistance at $4.350. There is currently a lower probability that the coin will go higher, without support of fundamentals. On the opposite side, if $4K support is broken, then a move toward short term support at $3.8, down to $3.6K might be expected.
Ripple: oversold market is reached
Regardless of the Saturday`s market developments, XRP followed the expected path during the previous week. Namely, last week the coin entered into a major correction cycle, following movements from September this year, where a move toward the $0.85 support line was clearly indicated by the technical analysis indicators. Saturday`s sell off pushed the price down to $0.65, but the coin soon recovered to the level of $0.85.
As one cycle is over, XRP will enter into a new one. RSI has clearly reached the oversold market, which is an indication of the coming short term price reversal. Since last week MA50 started its slow convergence toward MA200, but cross is still not in the store in the coming days. Based on current charts, there is a high probability that XRP will revert to the upside in order to test resistance lines at $0.9 and $1.0 in the coming days. There is a lower probability that $1.0 will be breached on the upside. On the opposite side, there is also a high probability for $0.85 to be tested again. In case that it is broken, then the next support line stands at $0.7.
Binance Coin: targeting to test $520?
Previous week BNB started testing the $630 resistance line. Although there has been one move till the level of $670, the coin did not manage to clearly break $630 resistance and reverted to downside. Excluding Saturday`s short move to $450 due to general market short sell off, lowest weekly level was at $560 support line.
RSI is currently moving around 45, and not providing an indication that potential price reversal is ahead. It is indicative that MA50 has started to slow down its convergence from MA200, which might indicate potential cross in the future but it will not be anytime soon, at least based on a distance between lines. BNB is currently testing a short term support line at $560. Based on charts, there is an increased probability for this line to be broken on the downside, where BNB will head to test the next support line at $520. On the opposite side, there is some probability for BNB first to test $630 before the coin finally reverts to $520 support.
Cardano (ADA): oscillators are close to signal cross
It seems like investors' confidence in Cardano is modestly slowing down. Although the coin was strongly holding to $2.0 for a relatively longer period of time, recent market developments made their impact on the price of ADA. During the previous week, the coin tried one more time to move back to $1.7 resistance, after the oversold market had been reached, but soon reverted back to the level of $1.4 where the long term support line stands. On Saturday price went down to $1.2, but swiftly reverted back to previous level.
Looking at technical analysis, oscillators are the ones that are ringing the bell at this moment. MA50 is moving quite close to MA200, which might signal that potential cross from the upside is on the road. If cross occurs, it would be a major signal of a potential bearish trend for ADA. However, there is still some small distance between these two lines, but they are to be closely monitored in the coming days. RSI has moved slightly to the upside, but as of the weekend, the indicator is moving very close to the oversold market once again.
ADA is currently testing a long term support line at $1.4. In case that this line is broken, then it might signal ADA`s major move toward the next long term support line at $1.0 and also end of a cycle from July this year. However, it might take some time until this level is reached, because the coin will first need to test the support line at $1.2. On the opposite side, there is probability for $1.6 to be tested, with lower probability that the coin will return to $1.7 resistance once again.
LINK: moving in oversold market
LINK had a good start of the week, but a bad end. Anyway, the good thing is that LINK was clearly following technical analysis levels. Coin started the previous week moving toward the $25 resistance line, but without strength to break it, LINK reverted to down side, to test support line at $20. A short move toward $17 on Saturday could be treated as a statistical noise, considering that coin very swiftly returned to the level of $20.
A market move on Saturday brought a clear oversold market as RSI moved below 30. Moving averages are continuing to converge toward each other but still are keeping safe distance. At this moment, the support line at $20 has been tested. This is also a line to watch in the coming days. There is currently low probability, but in case that it is broken on downside, LINK will head toward the next long term support line at $16. However, there is increased probability for a move toward resistance at $25 in order to test it 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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