Last week in the news

Volatility on financial markets continued during the previous week after Q4 profit reports. Crypto market recovered some 5% from a rally a week before, and continues to trade at relatively lower levels. BTC is ending a week around $38K, ETH at $2.7K.

In the regular earnings report, Visa noted that the company made $2.5 billion worth payments through cards which are linked to crypto platforms. Visa`s top management perceives high future potential in this field of payments, in which way the company will try to position itself as a “key partner to provide the connectivity, scale, consumer value proposition, reliability and security” in order to further grow this field of business, as noted by Visa CEO Al Kelly.

Head of Google's strategy for digital assets, Richard Widmann, revealed a strategic plan of Google to hire people with expertise in blockchain, as the company is trying to capitalize on the opportunity which decentralized finance is offering. He also noted that the company is researching which type of services it can offer to developers.

The latest drop in BTC price was a signal for El Salvador to purchase more bitcoins. As per tweets from the country's President, Nayib Bukele, El Salvador used this dip to buy additional 410 bitcoins for the price of $150 million. As per estimates, the country`s holdings of BTC are currently around 1.500 coins.

Reuters is reporting that the US SEC approved another stock exchange, BSTX, as a subsidiary of BOX Exchange based in Boston, which will be based on blockchain technology. Jay Fraser, a director of BSTX said that in this way the exchange will look more  like crypto exchanges and less like traditional ones.

Robinhood posted a $423 million loss in the last quarter of the previous year, after which its share price lost some 15% in a day. As explained by the company's chief financial officer, net loss is a result of increased costs due to share compensations and increased number of employees.

Crypto market cap

During the previous week, the crypto market recovered some 5% from a rally a week before, but it still continues to trade at relatively lower levels. Total crypto market capitalization increased by 5% on a weekly basis, reaching $1.68 trillion. Most popular coins were behind this modest increase, while the majority of other altcoins were traded flat compared with previous week. Daily trading volumes remained stable around $220B on a daily basis with modest decreases during the weekend. Total outflow of funds from the beginning of this year stands at 23% or $495B.

Modest recovery on the crypto market during the previous week was driven mostly by major coins. Bitcoin was up by more than 8%, adding $57B to market cap. Ether also managed to gain 8% or $22B on a weekly basis.  Binance Coin had solid performance, adding $5B to its market cap or 9%, while DOGE gained some $2B or 11%, probably supported by tweets from Elon Musk.  In a relative sense, highest gainers on the market were OMG Network, with a cap increase by 16%, followed by Tron, whose price surged by 14%. Filecoin increased coins in circulation by 1.5% on a weekly basis, and gained an additional 11% in market cap.

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

Crypto futures market

Previous week was a positive one for the crypto spot market, however, the crypto futures market didn’t look quite optimistic when it comes to longer  maturity periods. Compared to a week before, BTC short term futures gained modest 3%, while Ether futures were down by some 3%. As for longer maturities, significant change occurred for maturities in December 2022 and 2023. BTC futures for these maturities were down by some 16%, and Ether futures dropped by more than 26%. Current market expectations for the price of BTC as of the end of this year are $37K, while for Ether this figure stands at $2.4K.

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

Bitcoin: is there strength for $40K?

After a strong selloff occurred two weeks ago, during the previous week Bitcoin managed modestly to recover some of its losses. Support line at $35K was holding strongly for the last seven days, so BTC is ending a week around $38K. However, the lowest level reached during the week was $33K, indicating that still some pressures to downside are holding for BTC.

RSI made a move from clear oversold market to the level modestly above 30. Although such a move is positive, it still does not provide indication that BTC is heading toward recovery. Moving average of 50 days is continuing to diverge from its 200-days counterpart, still not indicating that a potential stronger recovery might be ahead. At the same time, BTC was holding above the support line at $35K, however, during the week, the coin did not have strength to make a move toward the resistance line at $40K. Instead, BTC started losing strength around $37K.

Based on current charts, it might be expected that BTC will revert to $35K once again in order to test this level one more time. In case that it holds, the coin will revert back to levels around $37K-$38K, where it is currently traded. If there is enough market strength, there is some probability that the market will push the price toward the resistance line at $40K, to test it for the first time in two weeks. Current indicators do not suggest that this level might be broken on the upside. On the other hand, charts are still pointing to $30K support as a bottom line of the latest move to the downside, so there is still high risk that BTC has not finished with its latest correction.

Ether: oscillators are forming a cross      

During the previous week Ether was holding strongly above the support line at $2.4K. Although this might be perceived as a positive sign, still there are some technical indications which are raising a question if it is too early for ETH to enter the path of a recovery.

Lowest level reached during the week was at $2.180 on Monday, but ETH swiftly moved above the $2.4K support line. At the same time 50-days moving average made a cross with 200-days MA from the upside. It will take a few days for the cross to confirm itself, but at this point, it increases the probability for ETH to make further moves to the downside. RSI moved from the highly oversold market modestly above 30, which is still early to conclude that a short reversal is actually coming for ETH.

Within the next few days it might be expected that pressure on downside will persist. In this sense, the level to watch will be $2.4K. In case that it is clearly broken, ETH will head toward $2.100 support, eventually $2K, as a significant level for ETH. If selling pressures continue also in the coming period, the end of the latest cycle might stand at $1.750 support, but there is still time until this level is confirmed through technical analysis. Currently, there is a high probability that ETH will test the resistance line at $2.630 with lower probability for next resistance at $2.850.

Ripple: for how long can $0.6 hold pressure?        

During the last four days, XRP has significantly decreased its market volatility, and it seems like the market does not have a clue in which direction to make the next move. At the beginning of the previous week the lowest level had been reached at $0.55, however, the coin swiftly returned to previous trading levels around the resistance line at $0.6, where it continued to trade till the end of the week.

Moving averages are continuing to diverge from each other, after a dead cross made a few weeks ago. RSI, which previously was deeply in the oversold zone, has moved quite modestly to the level of 32, not clearly indicating that the market is ready to move away from oversold territory. Risks to the downside are still holding. Level to watch in the coming days is current $0.6 resistance. In case that market finds strength to push the price above this level, then XRP will test once again $0.65 with decreased probability for $0.7 resistance. On the opposite side, there is an increased probability for the $0.55 support line to be tested again.

Binance Coin: waiting to choose side

Price moves in a range of some 50 pips within a week are not at all so frequently seen with Binance Coin. However, during the previous week, there have been quite modest moves on a daily basis between levels of $350 up to $400. It looks like that market is on hold and still waiting to choose the side.

Moving averages are still continuing their move toward each other. They are currently moving quite close, increasing their potential for a cross in the future period of time. Still, for the moment, a cross has not been made. RSI has moved from oversold market close to 40, but it still does not provide a signal on stronger short term reversal in the coming days. Support line at $350 has been tested each day within the previous week, providing some confidence that a short reversal might be ahead.

Level to watch for a second week in a row is the $350 support line. In case that market enters into a short reversal to the upside, it might be expected that $400 resistance will be tested in the coming days. There is currently a lower probability that the market will be able to push price above this level, except in case of some positive fundamentals. In case that pressures on the downside prevail in the coming days, it might be expected for BNB to head toward the $300 support line.

Cardano (ADA):  slowdown continues

After Cardano reached the end of a cycle at level of $1.0, the market has significantly slowed down, moving mostly around this level during the whole previous week. There have been several price oscillations to the $1.14 and down to $0.95, but these were lonely moves. Daily trading volumes have also dropped during the week, so it seems like ADA is currently waiting for some significant fundamental news in order to push the price to the upside.

Divergence of moving averages of 50 and 200 days is also slowing down, which might be a good sign for the price in the future period. For the moment, they are still at safe distance, with increasing probability that soon they might start their convergence toward each other. It is also interesting to note that RSI is constantly holding around 40 levels, and despite the latest strong push of price to the downside, the oversold market has not been reached.

Level which will be in market focus in the coming days is the $1.0 support line. If ADA manages to hold this level, it should be expected that price will soon revert to the upside to test resistance line at $1.20. There is decreased probability for $1.0 support to be broken on the downside, in which case, ADA will turn to the next support at $0.9.

LINK: slow moves in a positive direction

Two weeks ago LINK reached the end of a cycle level at the $15 support line and started its recovery path. During the previous week, price moves were modest, but they were in a positive direction. A $15 support line has been clearly tested, but market moves were more oriented toward levels which are above this line. Highest level reached was $16,8, where the coin is currently traded.

Moving averages of 50 and 200 days are continuing to move as two parallel lines for a second week in a row, not providing any indication that potential cross might occur in the short period of time. After reaching the oversold market, RSI have made modest moves toward level of 35, still not providing clear indication that coin is in clear short term price reversal.

Although the $15 support line is an important one for LINK at this moment, actually there is a high probability for LINK to head to the upside in order to test the $20 resistance line. Taking into account historical price moves, the level of $20 might be perceived as an important one for LINK, where the coin spent a lot of time during previous trades in 2020 and 2021. On the opposite side, the next support line stands at $13 with decreased probability that LINK will test this level in the coming period.

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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