Last week in the news

Although the year-end Holiday season is usually a calm part of the year on financial markets, the crypto market is finishing this year recovering its last three week losses. BTC is ending the week above $50K, and ETH is holding around $4K.

In an interview with Bloomberg, the CEO of Kraken exchange, Jesse Powel, commented that Kraken is planning to develop a marketplace for NFT`s. The company will provide custody for NFT`s, including their liquidation value, which will allow their customers to use their tokens as a collateral for loans. Crypto lender Nexo has already developed and offers a product which accepts NFT as a collateral for loans which can be obtained with this crypto lender.

After the latest surge in inflation and significant drop of local currency in Turkey, the popularity of crypto currencies have significantly increased among local people. In order to assess this matter, news is reporting that Turkey's president Erdogan will soon submit a law on cryptocurrencies to the Parliament for adoption. Earlier this year, Turkey has officially prohibited payments in crypto currencies, however, it is still legal to hold these assets. What will be exactly regulated with this new law, has not been reported.

Coindesk is reporting on issues that investors in crypto businesses are facing in Japan, in terms of extremely high taxes related to listings of tokens. Namely, as per current tax laws, issuers of tokens are obliged to pay tax on their holdings. Tax rate for token issuers is 35%. As reported, currently many crypto founders are looking for a way to move their businesses from Japan, mostly to Singapore, considering that many of them are start-ups, without funds to pay taxes, which forces them to sell their tokens.

Jack Dorsey, a former CEO of Twitter and currently CEO of Square, announced on Twitter that he is officially banned from Web3. He has been blocked by Mark Andreessen, a co-founder of Andreessen Horowitz venture capital firm. Block came after Dorsey`s comments that Web3 will not be a free network as it is owned by the venture capitalists like Andreessen instead of ordinary people.

In light of the coming Holidays, there has been an increase in cryptocurrency donations of 583% compared to last year, The Giving Block announced. Other charitable organizations which accept donations in crypto assets are also noting an increase in this trend.

We wish you Happy Holidays and many green pips in 2022!

Crypto market cap

Although the Holiday season is usually a calm part of the year, the crypto market is finishing this year in a quite positive manner. Total market capitalization has increased by 9% on a weekly basis, reaching $2.38 trillion, returning to levels from the beginning of December. All coins gained during the week, exposing investors optimism about these assets and their potential in a year to come. Daily trading volumes were decreased compared to the week before, and were ranging between $150B up to $170B on a daily basis. Total inflow from the beginning of this year currently stands at $1.58 trillion, which is an increase of 200%. Regardless of high price volatility, price performance of the crypto market had certainly outperformed any other asset on financial markets during Y2021.

Crypto market gained a total 9% during the previous week. Major contributors in nominal value were majors; Bitcoin with an additional $75B or 8% and Ether with a surplus of $15B or 3%. All other altcoins also had a good week, finishing it in green, compared with a week before. Some coins with good performance were Theta, with an increase of 23% on a weekly basis, followed by Polygon who surged by 18% and DASH and Miota which both gained around 16%. Cardano is also back in the game with a weekly increase of 13% in market cap despite a decrease in circulating coins of 3%.

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

Crypto futures market

Crypto futures market recovered modestly from the last three week`s drop in prices. Bitcoin futures gained for all maturities with higher gains up to March 2022, of some 8%. Longer maturities were up by some 3%, while December 2022 was standing at $52.5K.

Ether futures performed in a relatively mixed manner. Increase in prices for maturities till March next year was around 5%, while March 2022 was up by 10% on a weekly basis. However, longer term maturities remained relatively flat compared to the previous week, with no change for December 2022, which was holding at $4.2K.

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

Bitcoin: ending year at $50K?

During the previous week Bitcoin managed to recover some losses from previous weeks and to return to the level from the beginning of December. Support line at $45K has been tested, but market did not have strength to break it to the downside, and BTC reverted to resistance line at $50K. Highest level reached during the week was $51,9K on Friday, while BTC is finishing week modestly above $50K level.

A price move to the upside and level of $50K is certainly a positive one for BTC as it shows that dip-buyers are still holding and are ready to further support this coin. However, charts might not look very optimistic at this moment as there is strong convergence of 50-days moving average toward MA200. It is still early to speak about cross from the upside, but there are indications that this cross might occur somewhere during the beginning of next year.  RSI moved from the oversold zone and currently is around 50 levels, without clear indication that price would have strength to move to the higher grounds.

Year-end is usually a calm period of the year in financial markets, where most investors are preparing to take a short break. In this sense, it is not expected that some higher volatility might occur during the next week, although, crypto market has its own particularities. In this sense, following current charts, there is a higher probability that BTC will finish this year around the $50K level, and testing the resistance line. There is also a probability for the $45K support line to be tested once again.

Ether: will $4K hold?    

Beginning of the previous week was a bit critical for Ether, as the coin started a week with a price pushed to the downside, reaching its lowest level at $3.7K. Support line at $3.6K has not been tested during the week, as ETH swiftly reverted to the upside, managing to end week at $4K resistance. Although for the last three days this level has been tested, still ETH did not manage clearly to break it.

Moving averages of 50 and 200 days are continuing to converge toward each other, but they are still managing to hold safe distance. RSI continues to move between 40 and 50 levels, not providing an indication that some reversals might be ahead. At the same time, daily trading volumes are continuing to decrease, which is expected during this time in a year.

For a second week in a row, signals from technical analysis are continuing to be mixed, when a lower time frame is in question. On the other hand, RSI is moving in a range between 40 and 60 for the last two months, indicating that the market is neither overbought, nor oversold. This increases the probability of some major moves in the future for ETH. Based on current charts there is still a high probability for $4.1K to be tested in the coming days, but there is also indication that $3.6K might be tested again.

Ripple: still early for return above $1.0?    

Ripple had a promising start of the week with climbing price to the level modestly above resistance at $1.0. However, the end of a week came with a short reversal down to the long term support line at $0.9. It is positive that XRP is not eyeing the $0.7 support line anymore at this moment; however, the question is for how long a coin can hold above $0.9?

With a move from the previous week RSI was pushed to the level of 60, but still away from the overbought market. This opens a door for XRP to move price higher, until a clear overbought market is reached. On the other side, MA50 and MA200 are continuing to get very close to each other, indicating that cross from the upside might occur in the coming weeks. Based on current charts it might be expected that XRP will continue to test its strong support line at $0.9. In case that it is clearly broken to the downside, XRP will head down to test the next support line at $0.85. On the opposite side, if current support is not broken, then the coin will revert to test $1.0 once again, with significantly decreased probability that this level might be broken on the upside.

Binance Coin: slowdown will continue

Slowdown for BNB is continuing as this year is approaching its end. For the last two weeks BNB is moving slowly between $500 support and $560 resistance line. As markets are slowly calming down, it might be expected that BNB will continue this slow-motion move till the end of this year.

Moving averages of 50 and 200 days are continuing their slow convergence toward each other, but they are continuing to keep safe distance between them. At the same time RSI has slowed around level of 40, not providing much indication regarding next potential BNB moves. Current charts are showing that BNB did not clearly finish with testing the $500 support line, which increases probability for this level to be tested once again in the coming days. In case that it is not broken, the coin will one more time revert toward $560 resistance.

Cardano (ADA):  short break at $1.4?

Cardano showed some resilience during the previous week. Although the coin was continuously weakening since the beginning of November, last week was sort of a break for ADA. Support line at $1.20 has not been broken, and the coin reverted to the upside and resistance line at $1.40. There is an implied question at this moment if $1.4 is only a short break for ADA or some major reversal is ahead?

The answer to the above question is for a longer time consideration. Looking at the shorter time frame, it should be taken into account that recently moving averages of 50 and 200 days made a clear so-called “dead cross”, indicating high probability for trend reversal to the downside. During the previous week they have continued their divergence from each other. RSI has moved to the level of 50, not providing much information regarding potential short term moves of the coin.

ADA is currently testing a resistance line at $1.40. There is a decreased probability that it might be broken at this moment, but in case that market finds strength to push the coin to the upside, next resistance stands at $1.60 level. Charts show that there is also an equal probability for the $1.20 support line to be tested again, before ADA makes its final move to the upside.

LINK: oscillators are not looking pretty

In line with the general market trend at the beginning of the week, LINK managed to push its price up to the level of $22. Resistance line at $20 has been tested for the last three days, but the coin did not find strength to clearly break this line. It increases the probability that a short reversal to the support line might be expected in the coming days.

However, what is currently ringing the bell in technical analysis are oscillators MA50 and MA200, which are getting very close to each other. Their potential cross in the near future, if occurs, might be an indication of potential trend reversal for this coin, but to the downside. Whether LINK will find strength to avoid it, will be revealed in the coming weeks. RSI moved from oversold market up to the level of 50, not indicating potential price reversal in the coming days.

Since the resistance line at $20 has not been clearly broken for the last three days, it significantly increases probability for a short price reversal to the support line at $20. This level might be tested in the next few days. In case that it is broken, the coin will head toward the next support line at $16. However, if the market pushes LINK to the upside, then the coin might end this year around $25 resistance, but more probable is the level of $20 to be LINK`s year-end target.

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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