Last week in the news

After a few weeks of positive market sentiment and increase in crypto market cap and prices, the previous week was marked with a modest slowdown for the majority of altcoins. However, Cardano is still in the spotlight of investors as the coin managed for a second week in a row to reach new highs, while Bitcoin has tested $50K resistance.

FED Chair Jerome Powell held a speech at Fed`s annual symposium in Wyoming on Friday. The most important note from his speech relates to a view that the FED could soon start to decrease its monetary policy support to the economy through decrease of its bonds purchase on a monthly basis. On the other hand, he noted that decreased interventions does not include rate hikes at the same time, since FED's target continues to be full employment in line with the targeted inflation rate of 2%. One more time, Powell pointed that current increased inflation figures are only transitory. Market reaction on Powell's speech was positive as equity markets surged, closing a week in green.

PayPal announced that it will allow its customers from the U.K. to hold and sell bitcoin, bitcoin cash, ethereum and litecoin. This is the first country to which PayPal is expanding this service, after it has been available to U.S. clients for some time.

CEO of MicroStrategy, Michael Saylor, tweeted that the company bought additional 3.907 bitcoins for an average price of $45.294 per coin. In the same tweet he noted that as of the end of August the company holds a total 108.992 coins at an average price of $26.769 per bitcoin. Total investment in BTC is $2.918 billion.

Coinbase is strengthening its position on the German market, by incorporating a know-your-customer solution of fintech platform Solarisbank. Coinbase is the first company granted a crypto custody license from Germany`s financial regulator, BaFIN.

The Reserve Bank of India announced a launch of a trial program for digital rupee, which might start in December this year. The purpose of the trial program would be for CB to dig deeper into the security of such operations, and its potential impact on the financial sector and monetary policy.

As Coindesk is reporting, based on the research made by Nickel Digital of 23 wealth managers in the U.K., 11 of them noted that they are planning to increase their holdings in crypto currencies in a period up to year 2023. As a rationale for future investments, managers noted anticipation of price increase of crypto assets. As a major concern it has been perceived as the relatively smaller size of the crypto market, “issues with liquidity and a lack of transparency”.

Crypto market cap

It was a relatively mixed week on the crypto market. Although the majority of altcoins lost some of value, the market was mostly driven by the most popular coins on the market. Total market capitalization was modestly increased to $2.071 billion, which is an increase of 0.5% compared with the end of previous week. Most contributing coin for this increase was Caradano, driven by positive market sentiment over new network upgrades, followed by Bitcoin and Binance Coin. Daily trading volumes were quite modestly increased to $230 billion on a daily basis. Total inflow from the beginning of this year stands at $1.28 trillion, which is an increase of 161%.

After a few weeks of positive market sentiment which was a major driver of increase in crypto market cap and prices, the previous week was marked with modest slowdown for the majority of altcoins. However, Cardano is still in the spotlight of investors as coin managed to increase its market capitalization by an additional $12 billion or 16% during the week. Bitcoin also had positive performance with an increase of market cap for $8 billion or 0.9%, followed by Binance Coin, which gained additional $6 billion or 8.7% w/w. Tether had one of the best weeks since the beginning of this year, with an increase in total circulating coins of 2%.  Majority of other altcoins have lost some of their value. However, considering that market cap remained on relatively the same level and that some coins have strong rise in price, it seems like there has been some re-packaging of crypto portfolios, rather than actual outflow of funds from these altcoins.

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

Crypto futures market

As of the end of the previous week, BTC futures with maturity within next two months were holding on a relatively same level as a week before, around $49K. On the other side, futures with maturities as of the end of this year showed modest decline of 1% on a weekly basis. This provides some signal that the market does not expect for BTC to still move above the $50K level.

Ether futures have modestly dropped during the previous week, with the highest decrease in maturities during December this year of almost 4%. This provides some insights that the market is betting on ETH`s weakening till the end of this year, however, with further strengthening during the next year.

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

Bitcoin: is testing $50K over, or not?

Resistance line at $50K was in focus of Bitcoin during the whole previous week. Still, there has not been enough market strength to break this level and BTC reversed a bit to levels of $48K. Trading volumes have further decreased for the second week in a row, which is one of major contributors for lack of coin strength. RSI dropped slightly to levels above 50, from previous overbought territory. MA50 is speeding up its convergence toward MA200, although both lines are still moving at distance.

Signals from the current chart are a bit mixed. On one side it looks like BTC did not finish with its testing of $50K resistance, and on the other side, there are some signals that short term reversal might be ahead. Although $48K is not a significant line for BTC, it should be closely watched at this moment. In case that it is broken on the downside, that would be a clear sign of a short term reversal, and in this case the level to watch would be the support line at $45K. In case that $48K is not broken, then BTC will certainly head once again to clearly test $50K resistance. Considering decreasing daily trading volume, there is a small probability that this resistance line will be broken in the coming days, except in case of some strong fundamentals.

Ether: time for short reversal?

Ether continues its movement around the $3.330 level, where the majority of August futures were issued. Although they have expired, current September prices show market bet on almost the same level. Current question among analysts is if there is time for a short term reversal for Ether or if the coin is preparing to enter into the channel between $3K and $3.5K?

A look at current charts shows further decrease in daily trading volumes for Ether. RSI has further dropped to levels above 50. MA50 and MA200 are continuing their further divergence.  Level in focus continues to be $3.330. In case that this level is broken on the upside, then ETH will head toward the current resistance line at $3.500. On the opposite side, if ETH makes a modest reversal, then the next significant line to watch is the $3K support line, with some probability for next support at $2.850.

Ripple: how strong is support at $1.0?  

For a second week in a row, Ripple is slowing down. Previous week XRP started testing the resistance line at $1.3 but soon reverted to downside in order to test support line at $1.0, and finished the week around resistance at $1.2. Although it was a mixed movement, still it seems that there is not enough market strength to push the coin back to the previous line at $1.3. This implies probability that some further testing of $1.0 support might be in store for XRP in the coming days.  RSI is currently moving around level of 50, while oscillators are quite close to each other, increasing probability for MA50 to cross MA200 from downside in the coming days.

Levels which will be in focus in the coming days are support line at $1.0 and resistance line at $1.20. In case that resistance at $1.20 is not clearly broken, then XRP will certainly revert to the support line at $1.0. Depending on market strength and demand for XRP, currently there is probability for a long term support line at $0.9 to be tested in the near future period. However, if XRP manages to break $1.20 resistance, then the next level to watch would be $1.30 where the coin spent significant time during the past three weeks.

Binance Coin: overbought zone has been reached

It has been relatively good week for Binance Coin. BNB managed to move further on the upside, breaking the resistance line at $430 and making a push toward the next resistance at $520. Coin spent almost the whole previous week testing this resistance level, but in this attempt, didn't manage to go beyond. With this push in price, BNB has reached clear overbought zone, so some short term reversal might be expected in the coming days. Oscillators are very close to each other, but still not making a cross.

As resistance at $520 has been reached and tested during the last few days but without a break, implies on probability that a short term reversal might be in store for BNB. First support line currently stands at $430, which market might test in the coming days. In case that this level is broken on the downside, the next support line stands at $380 but with decreased probability that the market might test it during the next few days. On the other hand, if the market pushes BNB further on the upside, the next resistance line to watch stands at $560.

Cardano (ADA):  new week and a new ATH

News related to “Alonzo'' upgrade is continuing to push Cardano`s price to the upside. Second week in a row, ADA is reaching new historically highest levels. Previous week it was at level of $3.0. How much more demand for this coin is on the market is hard to estimate, and how coin price will behave in September, after implementation of the upgrade, it is unknown at this moment. However, there are some assumptions that the decrease in price of the majority of altcoins during the previous week is part of re-packaging of investors' portfolios, where some funds could have been transferred to ADA. If this is the case, then it might be expected for ADA`s price to slow down in the coming days.

Considering that there are specific fundamentals which are driving the price of ADA at this moment, application of technical analysis might provide some misleading signals regarding potential future prices. In this sense, we are focusing only on the historical support lines which stand at $2.20 and $2.50 which is ATH from the previous week. A move on the upside above current ATH, will exclusively depend on future demand for this coin.

LINK: short term reversal or forming a channel?

LINK continues to move in a mixed manner for the second week in a row. During the previous week, the coin was trying to test resistance at $30, but in a very shy way, and soon reverted back to the support line at $25 which was also not broken on the downside. Almost the same pattern has been seen a week before, so the question is if LINK is currently entering into a short term reversal or forming a channel?

Same levels, $25-$30 continues to be in focus also during the following week. In case that resistance at $30 is broken on the upside, the next level to watch stands at $35. On the opposite side, if the support line is clearly broken, LINK will head to test the next support at $20.



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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