Last week in the news
Previous week on the crypto market was modestly volatile, but the end of the week remained flat on a weekly basis. Bitcoin ended the week testing $35K, while Ether was traded modestly below $2.2K.
Positive impact on the price of Bitcoin came again from Elon Musk`s tweets during the previous week, increasing positive market sentiment about the future of Bitcoin. Namely, Musk tweeted on Monday that Tesla might start using Bitcoin again, when it reaches around 50% of clean energy for production. After his tweets, BTC price soared 9% and reached $40K. In several other tweets, Musk noted that Tesla Inc. sold only 10% of its $1.5 billion BTC holdings in order to test the market and ability for BTC to be sold “without moving market”. Anyway, investors are looking forward to dig into Tesla's earnings update in July, in order to verify Musk`s statements.
Important news during the previous week was related to FED`s expectations on the U.S. inflation, after a two-day meeting. It has been revealed that FED is currently projecting two post-pandemic rate hikes which might occur by the end of the year 2023. At the same meeting, FED increased short term repo rates to 0.05% form current 0%, as well as rate on bank`s reserves to 0.15% from current 0.10%. This move influenced some repositioning of the market and flattening of the U.S. yield curve, where 2-year Tbond yields were increased, while for the U.S. benchmark, a 10-year Tbond, yields dropped to level of 1.44% from previous 1.65%. After this decision USD gained nearly 1% against other currencies, while stocks had a bit mixed trading, with Nasdaq Composite trading higher, while S&P 500 and Dow Jones traded at lower ground. Responding to announced potential two rate hikes, analysts are noting that current market expectations are on potential four rate hikes by the end of 2023, based on current euro-dollar futures.
One of the largest Spanish banks, BBVA, said that it is planning to open a Bitcoin trading and custody services which would be offered to their private banking clients in Switzerland. Such a decision of the BBVA is backed by clients' demand and also by clear regulation on cryptos in Switzerland.
Goldman Sachs started trading bitcoin futures with investment firm Galaxy Digital. In an interview with CNBC, the former Goldman partner and current Galaxy Digital co-president, Damien Vanderwilt noted his expectations that more banks will support crypto business due to market competitive pressure or “fear of missing out” as he noted. He also expressed the opinion that increase of business and more use of crypto currencies, will help Bitcoin to decrease its current volatility, which also represents a major obstacle for its higher inclusion into mainstream.
Although China is banning crypto miners, it continues with its project to be the first country in the world to introduce its digital currency. The state-owned Industrial and Commerce Bank of China is the first bank which allowed its customers to convert digital yuan into cash through the bank`s ATM`s. As per news reports, Agricultural Bank of China has also installed similar features to 10 ATMs in Beijing.
Crypto market cap
Although there had been some increase in market capitalization at the beginning of the week, due to positive news tweeted by Elon Musk, as of the end of the week this increase was wiped out, leaving crypto market cap flat on a weekly basis. Total market capitalization was standing at $1.48 trillion which is 1.9% lower from the end of a week before. There has not been much change in daily volumes of trades, which were moving around $150 billion on a daily basis. This week`s modest decrease was driven by Ethereum and few altcoins, while Bitcoin`s cap remained flat on a weekly basis. Total inflow from the beginning of this year currently stands at $688 billion, which is an increase of 87% in relative terms.
Previous week on the crypto market was modestly volatile, but the end of the week remained flat on a w/w basis. Bitcoin`s market cap remained at relatively the same level from the previous week`s close, while Ethereum was on downside, finishing the week with a loss of $42 billion, or 14%. Bitcoin Gold also lost some 5% in market cap, followed by Ethereum Classic, who was down by 7% and DOGE with the same decrease. There has not been any significant changes in circulating supply of coins.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Bitcoin: getting ready for the upside?
For some time now, Bitcoin was moving in a range between $30K and $40, but most of the time the coin spent around $35K. During the previous week, BTC managed to make a move to the upside and test currently strong resistance at $40K. This move was supported by tweets from Elon Musk and the probability that Tesla Inc. will accept Bitcoin again if it is mined with at least 50% with green energy. However, mid-week brought some reversal to the downside and BTC ended the week testing support level at $35K.
Considering that there is currently relatively decreased demand on the crypto market, it increases the probability that BTC and other coins will move slowly in the future period and in this manner form a trend. At this moment, BTC is testing support at $35K, which is level where coin started the previous week. Moving Average and Bollinger Band lines are currently colliding, while the triangle which started to form one month ago was broken on the up side during last week. These movements are providing some indication that uptrend might come in a short period of time. Levels to watch during next week will be current support at $35K and resistance line at $40K. A move on the up side will push BTC to test $40K once again and if broken, then level at $45K up to $50K is to be tested next. On the opposite side, in the case that $35K is broken on the downside, then the short term important level in the spotlight of the market will be $33K down to $30K.
Ether: pressure on $2.1K still holds
Although positive news related to Bitcoin have impacted investors' confidence and pushed Ethereum price to the level slightly above $2.6K, Ether finished a week around levels of $2.2. Support level at $2.1 has been tested during the week. For over a month now, pressure on $2.1K continuously holds. Although the current chart suggests that the coin is modestly forming a downtrend, the fact that it was not able to make a break of $2.1K points more than that coin is actually searching for an end of move on the downside in an environment of decreased market demand.
Current charts suggest that an important level to watch during the coming period would be the support line at $2.1K. In case that this level is clearly broken on downside, that will imply that ETH will find new ground at $1.950 down to $1.850. If the current support line sustains pressure, ETH will move to the upside to test the resistance line at $2.400 up to $2.650.
Ripple: at $0.7 comes a reversal?
During the previous week, XRP continued its way to the downside, and headed toward the support line at $0.7. In one short move at the beginning of the week, the resistance line at $0.9 was shortly tested, but without market strength to move above.
For a second week in a row, the level of $0.7 will be in the spotlight for XRP. As per current charts, XRP has enough space to test this level on the downside. At this point, a clear oversold market will be reached, as RSI is currently standing around 40. The oversold market would be a clear indication of potential market reversal. In case that $0.7 is clearly broken, the next level to watch would be a long term support line at $0.65. On the opposite side, reversal to the upside would push XRP again to $0.9 level.
What’s in store for altcoins
Bitcoin Cash continues its ride on the downside. During the previous week the coin was moving between levels of $640 down to $540. Support line at $540 was tested on several occasions during last month, but the coin didn’t have strength to make a move below it. It might be expected that some pressure on $540 will continue in the following week. In case Bitcoin Cash manages to break this line on downside, then the next level which would be in focus is $460. This level was shortly tested twice during May. In case that support at $540 is not broken, then the coin would revert on the upside to test resistance at $600 and $800.
Litecoin was traded during the previous week in a very short range, between levels of $180 down to $150. At this moment, LTC is testing a support line at $160. In case that it is broken, the coin will head to test next short term support at $140. On the opposite side, resistance at $180 might be tested. In case that it is broken, then the next level in focus would be $200.
Binance coin (BNB) was traded a bit sideways during the previous week. Coin was moving in a quite short range. Maximum price reached was at $388, however, the coin was moving more on downside, without any pressure on the opposite side. At this moment the coin is traded modestly above support level at $300. Considering that this level has not been tested during the previous week, there is a high probability that it will be tested during next week. At this level RSI will reach a clear oversold market and indicate potential for trend reversal. In the opposite case, the level to watch would be resistance at $400.
Previous week Dash (DSH) spent testing support level at $160. Like many other altcoins, DSH was also moving within a very short range, between levels of $180 down to $150. For the last two days of the week, DSH managed to break the support line, but continued to move slightly below this level. Current support line stands at $140, which the market might test during the following period. In an opposite case, the coin might revert to the up side and again to levels of $160 up to $180.
EOS is continuing its slow-motion trading within a range of $1, between $5.4 and $4.4. Support line at $4 has not been tested during the previous week, which puts this level into market spotlight for the coming period. In case that it is broken, the coin might head to test its long term support at $3.5. In case that it reverts to the upside, then resistance at $5 will be tested.
Although IOTA started the previous week heading toward the up side, a $1.2 level was the reversal point where coin started its move to downside and level modestly below $1, where it is currently traded. IOTA is currently testing a support line at $1. In case that this level is broken, the next important line stands at $0.75. In the opposite case, the coin might revert to its current resistance level at $1.5.
NEO is continuing to shorten its trading range. During the previous week it decreased to only $8, between $51 and $43. Short term support level for NEO stands at $45, which is currently tested. Current resistance is at $50. Obviously, NEO is looking for a breaking point between these two lines, but decreased market demand is currently not allowing higher shifts in the price of a coin. These two lines are the ones to watch during next week. A move above $50 resistance would push NEO to next resistance at $55, while a move below current support would lead the price of a coin to the next support line at $40.
Sideways trading was predominant for Monero (XMR) during the previous week. A coin was traded without any clear indication of a trend. Price was almost every day moving between $285 down to $260. Current resistance for XMR stands at $270. In case that it is broken, the next important line stands at $300. Support line stands at $250. A clear move below, would move XMR to next support at $230.
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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