Last week in the news

After a strong corrective week, the previous week brought some relief on the crypto market. The US and EU equities continued to trade with increased volatility, and regardless of clear bearish trend, ended Friday in the green zone. Bitcoin is holding to $30K, Ether is testing $2K support.

Monetary policies of central bankers of developed countries continue to be in the focus of markets. After the FED made a strong move of 50bps increase in interest rates at the beginning of May, currently all eyes are on ECB. As per latest announcements from several ECB officials, it is becoming more likely that ECB will increase its referent interest rates at a meeting scheduled for July this year. This will be its first rate hike within a decade.

After the recent crash of LUNA to $0, Tether also shortly lost its peg to $1 amid market run from stablecoins. Officials from Tether Holdings Ltd announced that they have diversified Tbonds holdings including non-U.S. government bonds. Around $286 million relates to the non-U.S. bonds, while the company still holds $39.2 billion in the U.S. Treasury bonds.

The collapse of LUNA ring the alarm with regulators, currently looking exactly what happened with algorithmic stablecoins in order to bring new regulation which should protect investors in such coins. At the latest G7 meeting this was one of the topics. In a released statement, it is noted that stablecoins should follow anti-money laundering rules and disclose reserves.

Latest drop in Coinbase share price due to weak earnings, one of the co-founders of the company, Fred Ehrsam, used to purchase $75 million worth of shares. This purchase has been done through venture capital firm Paradigm, which Ehrsam owns. Coinbase shares were down by some 70% during this year.

In an interview with Wall Street Journal, Chief Financial Officer of MicroStrategy, Andrew Kang, noted that the company will stick to its plans to hold bitcoin for a long period, regardless of recent drop in price. He also noted that there is also no pressure from shareholders for the company to sell coins at this moment.

Crypto market cap

It could be noted that the previous week was a relatively calm one on the crypto market. After a strong push to the downside, two weeks ago, during the previous week markets continued to weigh current events and whether it is time for dip buyers to step on the stage. Many analysts are commenting that the bearish market has started and that it will take some time, even through this year, until the market finally reverts its sentiment toward bears. However, many investors are waiting for central bankers to exhaust their monetary tightening in order to make investment decisions and moves on the market. At this moment, such moves might take some time in the future. Total crypto market capitalization remained flat during the previous week at levels around $1.2 trillion. Daily trading volumes significantly dropped from a week before, moving from $200B down to $130B on a daily basis. Total outflow from the beginning of this year still holds at $43% down, or almost $1 billion lower from the end of the previous year.

Although it was a relatively calm week, coins were traded in a mixed mode. Major coins were relatively flat compared to a week before, where Bitcoin finished the week with a loss of only $3B, while Ether managed to outperform BTC this time, losing $5B or 2%. Due to issues with LUNA, Tether continues to decrease market cap, losing additional $3.5B during the previous week, or 4.5%. On the other hand, at previous week we have seen some solid gains. Binance Coin managed to erase some of the losses from two weeks ago, by gaining $3.6B in a market cap, which is a 7.7% increase in a single week. Monero was also in a group of significant gainers, adding some 17.7% in its market cap. There has been some increase of coins in circulation, where Uniswap increased circulating supply by 4%, and Filecoin by 3.5%.

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

Crypto futures market

Crypto futures market made some recovery during the previous week, especially for long term maturities. Short term maturities were following the spot market, where BTC futures were traded down by some 5%, while Ether futures were down by some 5% on average. Long term maturities for both coins made some movements in a positive direction. BTC futures with maturities as of the end of this year were traded higher by more than 4%, ending the week above $30K. Ether futures maturing within the same period were traded 2% higher, where ETH was holding modestly above $2K.

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

Bitcoin: investors are on hold

After a quite turbulent week, the previous week crypto market remained in a relatively calm mood. Dip buyers have still not entered the stage, as they are still weighting news from central bankers and forthcoming inflation figures. On the other hand, there are analysts who are pointing out that the bear market started at the beginning of this year, and will continue at least till the end of this year. Although it might be too early for such conclusions, it is clear that further monetary tightening and withdrawal of liquidity from monetary systems will inevitably have a negative effect on all financial markets, among which, the crypto market might also be further affected.

During the previous week BTC was moving continuously around the $30K support line. Daily trading volumes have significantly decreased from two weeks ago, where BTC did not have any market strength to make a move toward either side. Highest weekly level reached was $31.4K, while lowest was $28.5K. RSI just modestly made a move above the oversold market, reaching its highest level at 36, which means that it still moves close to the oversold zone. Moving averages of 50 and 200 days turned their path to the downside, but still holding a distance between them. Cross is still nowhere near in the store.

As it is quite clear that fundamentals are currently playing the most important role on the market, the technical analyses should be taken with precaution in the coming days. Investor’s sentiment is still quite fragile during these times. In this sense there are currently two potential paths for BTC in the coming short period. On one hand, if buying orders prevail during the week, then BTC might try to reach $33K, with decreased probability that $35K resistance might be reached at this moment. On the opposite side, a clear break of current $30K support would push BTC down to $28K. This would be a highly negative move for BTC as it will also open a path for lower grounds and potential for a $25K support line within the next few weeks.

Ether: struggle for $2K continues            

Previous week was one of the rare weeks where Ether outperformed Bitcoin, unfortunately in a negative way. During the week Ether lost additional $5.6B in market cap by decreasing its price by 2.3%. Selling orders continue to be prevalent on the market. Highest price reached during the week was $2.1K, while lowest price reached was $1.9K. Current charts are pointing that Ether will continue its fight to hold the $2K level.

After reaching a clear oversold market, RSI is trying to move away from this zone, but in a very shy way. Indicator managed to move just to the level of 35, still not pointing that the market is on the road of reversal. Moving averages of 50 and 200 days started their down trend, with MA50 moving away from its 200-days counterpart. Certainly, a cross is not to be expected in the near future.

Good thing for ETH is that the $1.950 support line continues to hold, which means that the market has reached some equilibrium price at this level, at least for the moment. Now, the question is if more negative fundamentals hit the market, whether ETH will manage to sustain this price? Most certainly not, and the price will move toward the next support line at $1.850. On the opposite side, there is a probability for the price to move toward the $2.100 resistance line to test it once again.

Ripple: $0.40 support as a safe zone            

Markets have slowed down, and so is XRP. There has not been much movement during the previous week, but trading volumes have also decreased. To some extent, this could be positive for XRP, considering the depth of its market. Highest level reached during the week was $0.44, lowest one was $0.34. For the moment, it seems that the $0.40 support line is a safe zone for the XRP.

RSI was trying to revert its path from the oversold territory, but it only modestly managed to do that, by reaching its highest level at 33. This means that the coin did not start its reversal process after it reached a clear oversold zone. Moving averages of 50 and 200 days started a path to downside, with MA50 now moving away from its MA200 counterpart.

Current charts are showing that XRP feels comfortable around the $0.40 support line, which is positive. However, it should not be forgotten that the market is still waiting for that significant news regarding inflation slowdown, in which sense; some further surprises are possible in the coming period. In case that market finds strength for a reversal move, there is some potential that the price of XRP might head again toward the $0.5 resistance line.

Binance Coin: is $350 the next target?

Two weeks ago BNB had a challenging week where the price of the coin was pushed strongly to the downside and to the $250 support line. Soon after the oversold market was reached, BNB started its clear reversal path. However, considering the still challenging market environment driven exclusively by fundamentals, the recovery path might not be so swift as BNB usually does. Still, what continues to be positive about BNB is that this coin usually does not follow general correlation with the market, as we have seen again during the previous week.

With the start of a short term reversal, BNB started challenging the $300 resistance line. During the week there has not been enough market strength to push the price to the higher grounds, so the highest level reached was $313. Still, the coin is ending the week with prevailing buying orders, but with relatively lower daily trading volumes. RSI moved from oversold market up to the level of 43, still holding this up move, which indicates that market is within a course of short term reversal, with strong potential that it will continue this move. However, moving averages of 50 and 200 days are taking downtrend, with MA50 moving away from its MA200 counterpart.

Technical indicators are pointing to the potential that BNB might head toward the next resistance line at $350 to test it in the coming period. At this moment it is clearly pointed on the charts. However, in case that fundamental news hits the market during the week, it could be expected that BNB will return back to the level of $300 support.

Cardano (ADA):  failed reversal attempt

After reaching the historically lowest level, ADA started a short reversal to the upside. Previous week the coin started modestly above $0.5 and headed toward the $0.6 resistance line, which has been tested. However, during the week there has not been enough market strength to push the price above this level, so ADA reverted back once again, ending the week modestly above the $0.5 support line.

RSI made a quite modest move away from the oversold zone, but only up to the level of 37. This implies a question if the market is still ready for a push of price to the upside? At the same time MA50 and MA200 took the downside road, with MA50 moving away from its counterpart.

At this moment ADA is on a sort of cross road. Charts are showing equal probability for the $0.40 support line to be tested one more time. At the same time, there is also probability for ADA to make a move toward $0.60 resistance, with decreased probability that this line might be breached to the upside.

LINK: reversal is on hold?

LINK continues to follow the general market trend. During the previous week, the coin started with a short reversal, after reaching a clear oversold market two weeks ago, however, the coin did not manage to sustain new levels and reverted a bit back, to the levels from the start of the week. Highest level reached during the week was the $8 long term resistance line, while the coin is finishing the week around $6.8.

Charts show that RSI is still not ready to exit the oversold market, although this indicator started this road in a quite shy manner, by reaching level of 34. Moving averages of 50 and 200 days continue to move as two parallel lines but this time with a clear down trend.

Technical analysis is pointing to the probability that LINK might head toward the $8 long term line to test this level one more time in the coming days. There is currently no indication that this line might be breached to the upside. On the opposite side, if selling orders emerge, LINK might turn to $6 support line.


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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