Last week in the news
For the first time in the last six months Bitcoin hit $60K level as markets are pricing expectations on potential first BTC-futures based ETF to begin trading at NYSE on Tuesday. This puts BTC into a brink of another significant milestone which could be reached next week, as per current market expectations.
The big news hit the market with announcement on expectations for the first Bitcoin-futures based exchange traded fund, the ProsShares Bitcoin Strategy ETF and Invesco funds, to be traded at the New York Stock Exchange. As it has been announced, first trading is scheduled for Tuesday, next week. However, the tricky moment is that the U.S.Securities and Exchange Commission has a deadline until Monday to reject the filling of this fund, in which case the fund will not be eligible to be listed on NYSE. Investors are quite optimistic on the positive outcome, considering that futures are traded on the CME which is a regulated market. But still there are those who would rather prefer to have an ETF which is connected directly to pure BTC instead of its derivatives like futures. On the other side, analysts are noting that the BTC spot market is still heavily unregulated one, from which comes SEC`s reluctance to approve one such fund. Anyway, if ProsShares Bitcoin Strategy ETF and Invesco gain their approval on Tuesday, it is going to be another significant milestone for Bitcoin and its introduction to wider community and mainstream acceptance.
During the previous week Russian president Vladimir Putin noted in an interview with CNBC that he recognizes crypto currencies as a means of payment but they cannot be used for pricing oil contracts due to high volatility. Although crypto currencies are not treated as legal means of payment in Russia, still investments in these assets are not prohibited in the country.
The United Wholesale Mortgage, a company who was the first on the mortgage market to start a pilot program allowing its customers to pay their mortgages with crypto currencies, has officially announced that it will close the pilot and abandon the project. As its CEO, Mat Ishbia, explained, it is not worth it due to “combination of incremental costs and regulatory uncertainty in the crypto space”.
BoE deputy governor for financial stability, Jon Cunliffe, in a speech on Wednesday, commented on crypto market fast growth linking it to a potential bubble like the one that happened with subprime mortgages in 2008. In this sense, he is calling for an urgent and global regulation of the market.
Crypto market cap
Increased expectation that BTC might hit another significant milestone with potentially first BTC-future based ETF, which could be traded on NYSE from Tuesday, has pushed crypto market to higher grounds. However, the previous week was not positive for all coins, implying that aside from new investments in this market, some re-packaging in existing portfolios occurred. Previous week, total market capitalization has increased by 5% on a weekly basis, to the level of $2,48 trillion. Major contributors to this increase were major coins BTC, ETH and BNB. Daily trading volumes have also been increased, second week in a row, reaching levels between $200B up to $250B. Total inflow from the beginning of this year stands at $1.69 trillion, which is an increase of 213%.
Another week on a crypto market was led by Bitcoin. Increased investors' expectations of its further and wider mainstream acceptance have pushed BTC to higher grounds. Its market capitalization has increased by almost 11% on a weekly basis. BTC was followed by ETH, which gained 8% or $35B, and BNB with additional $7B or 11%. On the other side, there have been a portion of altcoins who lost some of strength during the previous week, like DOGE, with a loss of almost 4%, NEO`s cap was down by 8% and Theta by 7%. Cardano managed to sustain market cap at the same level compared to a week before, through increased circulating coins by 2.7% on a weekly basis.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Crypto futures market
During the previous week futures were traded higher in line with the crypto spot market. However, futures weekly increase has been higher than increase in the spot market for the same period. This might be perceived as positive market expectations on the future prices of both BTC and ETH. In this way BTC future prices have reached levels of $63K, while ETH finally reached $4K for maturities from February next year.
Table below provides the most recent information on BTC and ETH future prices.
Bitcoin: is ATH next challenge?
Fundamentals have played a significant role for Bitcoin during the previous week. Markets were influenced with high probability that the first BTC-futures based exchange-traded fund will be listed on the New York Stock Exchange. Namely, the U.S. SEC has a deadline until Monday afternoon to reject filling of two ETF`s. In case that SEC misses the deadline for rejection, first BTC-futures based fund will be listed and freely traded on NYSE. Since this is going to be another significant milestone for BTC and its wider inclusion into mainstream, markets priced this information by pushing BTC`s price to the level of almost $63K on Friday.
At the beginning of the previous week, BTC managed to break the resistance line at $55K and to start its road toward the next resistance at $60K. Major move BTC made on Friday on the fundamental news, when the coin tried to break resistance at $60K, moving the price to the highest level of almost $63K. However, due to lack of market strength for such a move, BTC ended the week at $60K, now, support line. For the last two weeks RSI is moving in an overbought zone, indicating that in the future period short term reversal could be expected. Oscillators are continuing their divergence from each other, supporting the golden cross from mid-September.
Fundamentals will continue to have an important role on the crypto market also during the following week. In case that SEC does not reject fillings for ETF`s on Monday, it is to be expected that market optimism will continue to be supported. In this sense, there is probability for BTC to make a move even above current levels, in which sense; its new target will be current ATH at $65K. Whether BTC will go beyond this level is to be seen. However, in case that SEC do reject fillings for new ETF`s that would have negative impact on BTC and coin will most probably return to the levels from a week before, down to $55K as major support or $53K as short term support line. In conclusion, optimism is there, however, some investor precaution is necessary.
Ether: testing $4K is over or not?
Positive fundamentals related to BTC made its impact also on ETH, considering that for some time now, ETH futures are also traded on CME exchange. Fundamentals supported ETH`s price to flip from $3.5K resistance line and move to the highest level of $3.970 on Saturday. Resistance line at $4K has not been tested during the previous week, although the coin had a strong push in price during that period of time. At the same time RSI went up to 65, however, did not come in a clear overbought territory, which leaves some space for ETH to move price higher. MA50 continues to diverge from MA200.
Same as with BTC, fundamentals will play an important role for ETH during the next week. Monday and Tuesday will be major days to watch for potential major price movements. Movements will depend on the news related to new ETF funds which are expected to become tradable on Tuesday. In case that there is positive news, there is a high probability that the price of ETH will be pushed to the level of $4K or $4.1K. There is a decreased probability that price will move beyond this level, but still, strong fundamentals are those who move the markets. In case of some negative market news, then the price of ETH might enter into reversal at least to the level of the major support line at $3.5K.
Ripple: MA50 is the line to watch
During the last week XRP was left out of the scope of the market and its major developments. Coin was moving relatively flat, between levels of $1.0 and $1.18. Resistance line at $1.20 has not been tested during the week. MA50 is continuing its slow convergence toward its MA200 counterpart, but still keeping safe distance. However, MA50 continues to be a supporting line for XRP price. RSI continues to be flat around 60 level.
XRP is currently slowing down its price volatility, implying that some major developments might be ahead. As coin currently finds support at MA50, this would be line to watch in the coming days. In case that it is broken, XRP will head to test support level at $1.0, with decreased probability to reach long term support line at $0.9. On the opposite side, the resistance line at $1.20 has not been tested during the previous week, which increases the probability for this level to be tested in the coming days.
Binance Coin: are oscillators ringing the bell ?
Previous week was marked with high volatility for BNB. At the beginning of the week the coin tested a support line at $380, but quite soon reverted back to the higher grounds, reaching level of $518 on Friday. However, during Saturday the market exhausted itself, and BNB went back to the $450 level. RSI went to the 60; however, there is still no clear indication of an overbought market. At the same time, MA50 is continuing to move closer to MA200, indicating a potential cross in the near future.
Since the end of August the $520 resistance line has been tested on several occasions but BNB did not have strength to break it. Currently this level is tested for one more time. A clear break will push BNB to $560 resistance. In case that it is not broken in the coming days, BNB will revert to the $430 support line. Such a move will push MA50 much closer to MA200 with potential for their cross. This would be an indication of BNB`s potential further move to the downside.
Cardano (ADA): slowdown indicates a major break ?
For the last three weeks ADA is slowing down and price moves in a slow motion. Certainly that during the previous week market focus has been on major coins on the market. In this way, the triangle continued to hold for ADA, but with current slow volatility, the question is if its major break could be expected in the following week?
During the previous week ADA was moving between levels of $2.08 up to $2.24. RSI is relatively flat around level of 50, not providing an indication on the potential reversal. MA50 began its major convergence toward MA200 but still is at a safe distance. A break of a triangle on the upside would indicate ADA`s move toward the short term resistance line at $2.30. However, a move to the downside would lead ADA`s price toward the major support line at $2.0. There are currently the same chances for both scenarios. Which one will prevail in the coming days will depend on market demand for this coin.
LINK: targeting $30?
After a week of a slowdown, during the previous week LINK managed to increase price volatility. At the beginning of the week the coin tested a major support line at $25, but swiftly reverted to the upside to the level of $28. Major resistance line at $30 has not been tested during the previous week. RSI is still moving around 50, while oscillators are continuing to move as two parallel lines since the end of September.
Probability that the resistance line at $30 will be tested in the coming period still holds for LINK. A final break of current MA200 resistance would indicate a clear move toward this level. However, in the opposite case there is equal probability for LINK`s move toward the major support line at $25.
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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