Last week in the news
It was a second sideways week for the crypto market, where the majority of coins were traded in a short range and without clear indication of a trend. Such moves were supported by both positive and few negative fundamental news during the previous week.
Elon Musk stopped using words while tweeting in order to communicate his thoughts about crypto currencies. Instead, he started using emoji`s. In some of his tweets posted on Friday, he used a picture of a couple breaking up and a broken heart next to it. Initial market reaction was a dip of Bitcoin for some 4%, reflecting market expectations that these pictures might suggest potential sale of outstanding Bitcoins by Tesla Inc. But what was the actual Musk`s message cannot be said with certainty based on just emoticons, so some clarifications from his side would be appreciated. Co-founder of the website CoinGecko made a simple comment on Musk's tweet, noting “he is trolling the community”.
The Indian Central Bank made a clarification on Monday, regarding its previous decision on banning all financial institutions to conduct any business related to crypto currencies. In this circular, the Central Bank is explaining that financial institutions should no longer adhere to its regulation from 2018., since the country's highest court has ruled this decision out in 2020. This clarification brought a bit of a fresh air to all people engaged in the crypto business in India.
As Coindesk reports, the Weibo app, which is China's version of Twitter, had blocked a large number of crypto currency “Key Opinion Leaders” or KOL accounts. This includes accounts of various individuals and businesses whose major focus are crypto currencies. As journalist Colin Wu tweeted, this account ban might be perceived as “a response to Beijing`s crackdown policy”. This ban was also reflected on the crypto market, where major coins lost some of their value.
On the other side of the world, the biggest crypto conference has been organized in the U.S., in Miami, called “Bitcoin 2021”. As CNBC reports, there have been more than 12.000 tickets sold, while some 50.000 people participated in this event. The Mayor of Miami stressed to a CNBC reporter the importance of the government to prepare the citizens for changes which are inevitably coming in the technological world and that he is trying to make Miami the “crypto capital of the world”.
Coinbase Global Inc. in cooperation with Apple and Google will enable their clients to add Coinbase cards to the payment applications which are run by these two companies. Wallet payments will be allowed for purchases where all crypto currencies will be automatically converted to the US Dollars for the purpose of making payments. ATM withdrawals will also be possible.
During the previous week, the European Central Bank had published a publication covering a topic of the international role of the euro, which also shortly covered the topic on central bank digital currency. In this segment, the publication is noting the importance of introducing euro digital currency, as a means to make euro currency disposable at every moment across Europe and abroad. The report is mentioning the CBDC`s feature of safety as one of important factors for its attractiveness for use in retail transactions, but they are also pointing to its wallet-safety in storing value. CBDC`s should significantly decrease counterparty risk involved in traditional cross-border payment transactions.
Crypto market cap
Total market capitalization finished the previous week at $1.60 trillion which represents quite a modest increase on a weekly basis. Although it has been another mixed week when it comes to news related to the crypto market, it has managed to sustain relatively stable levels. Positive influx on total market cap during previous week came mostly from major cryptos like Bitcoin and Ethereum but also some contribution came from Binance Coin. Daily trading volumes were at relatively lower levels, but constant, around $200B on a daily basis. Total inflow from the beginning of this year currently stands at $805 billion, which is an increase of 101% in relative terms.
Although the previous week was traded in a mixed manner, still the majority of coins managed to end a week in a green territory compared to a week before. Bitcoin and Ethereum were leading market cap increases with BTC gaining additional $29B and Ethereum surged for $40B or 15%. Quite a good performance came also from Bitcoin Gold with additional $15B, followed by Binance Coin with $12B or 26% increase. DOGE was supported with news released by Coinbase noting that it will make this coin available on their trading platform to its users. DOGE market cap surged by $10B or 27%. Currencies that ended week in red on a weekly basis were Ethereum Classic, who lost some $4B, followed by EOS with a decrease of $4.3B, and few others.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Bitcoin: moving in a channel while looking for a break
For the previous two weeks Bitcoin was traded sideways, moving between levels of $40K down to $33K, and forming a channel between these two levels. There has been several fundamental news, both good and some less good, which made an impact on the price of Bitcoin to move without a clear trend. Due to negative fundamentals, resistance at $40K could not be broken during the previous week, but on the positive side, there had not been enough market strength to break short term support at $35K also. However, on the other side, a move back to $35K can easily put pressure on the support line, and indicate probability that next support at $30K can be tested in the near future. RSI reached 40, but soon reverted a bit back to level of 35 and currently does not provide any clear indication on the trend. Moving Average and Bollinger Band lines are moving quite close to each other, which might be an indication that some reversals are ahead.
Important levels to watch during next week are again $35K and $40K. A clear break of one of these two levels would indicate trend reversal. There is a probability that Bitcoin will try to test support at $30K, which is currently 0.236 Fibonacci retracement, in order to finish the full FIBO cycle. Such a move would indicate an oversold market and will significantly increase potential for trend reversal on the up side. In case that $40K is broken, then it would be a clear indication of uptrend when BTC would head up to next resistance at $45 and $50K.
Ether: steady around $2.5K
It was one relatively calm week for Ethereum. At the beginning of week coin managed to make one move to the up side from $2.2K up to $2.8K, but soon went slightly back down to $2.5K. Resistance at $2.630 Ethereum was obviously not able to break with overall decreased demand from market. Support level at $2.4K was not tested during the previous week, and ETH is currently trading sideways.
At this moment, the important level for ETH stands at $2.4K which is short term support level and 0.38 of Fibonacci retracement. Chart suggests that there is probability for this level to be tested in the coming period. In case that it is not broken, the coin will revert to the up side and next resistance at $2.630. In the opposite case, the next support level stands at $2.100.
Ripple: still holding above $0.9
Ripple started the week at $0.87, moved up to $1.1 during the week in order to end it at the same level where it has started, modestly below $0.9 level. The $0.9 level is an important one of XRP as it is a long term line which the coin was struggling to clearly break in April 2018 and has been testing on several occasions during this year. As many other coins at this moment, XRP is also trading without clear trend indication.
Level which will be in focus during next week is certainly long term support at $0.9. In case that this level is broken on the down side, then the coin will move to the next support level at $0.7. As RSI is currently moving around 40, a move on the down side would provide indication of a clear oversold market. However, in case that $0.9 is not broken, then the coin will revert to the up side and test short term resistance at $1 which will open a way to next resistance at $1.20.
What’s in store for altcoins
Bitcoin Cash has been traded during the previous week in a slow-motion mode between levels of $630 up to $730. Current support level stands at $600 while resistance is at $800. Neither of these two levels has been tested, and without clear indication on potential trend. These two levels would be in focus also during next week. In case that support level at $600 is broken on downside, then the coin will head toward next support at $460. In case that resistance at $800 is tested, then there might be a probability for the coin to head toward next resistance at $1.000. Both options currently have the same probabilities.
Another coin which was traded sideways during the previous week was Litecoin. Currency was moving between levels of $165 and $197. Although LTC resistance level stands at $200, it cannot be safely said that this level was tested during the previous week, since sideways move was predominant in trading. However, this would certainly be the level in focus during next week. In case that LTC manages to break $200 on the up side, next resistance that would be tested in this case stands at $230 up to $250. However, a clear move to the downside would lead the coin to current support level at $160 and potentially to $140.
It was a relatively good week for Binance coin (BNB). Chart suggests that this coin entered into an uptrend which started as of the third week of May. During that time the oversold market has been reached, and BNB entered into trend reversal with the first peak reached at level of $400. During the previous week, another higher peak has been reached at level of $430. Coin started a week at level of $300, and is currently trading around $380 level. Current support stands at $300, which coin might shortly test in the coming period. However, a move to the upside from current levels would move BNB to test once again resistance at $400, and if broken, a move to next resistance at $520 would be ahead.
During the previous week Dash (DSH) was moving around resistance level at $200, but without any significant effort to break it. Move to the down side was quite modest, down to levels around $180. A level of $200 would be the one to watch in the coming days. In case that it is broken on the up side, the coin will head toward next resistance at $240. On the opposite side, support at $180 might be tested again, and if broken, then the next level to watch would be $160.
EOS was moving sideways during the previous week, in a range between levels $5.5 up to $6.6. Neither support at $5, nor resistance at $8 has been tested, which increases the probability for the coin to move to either one of these two levels in the coming period. By looking at the current chart, there is more probability for support level at $5 to be tested, before currency reverts to the up side, toward current short term resistance at $8.
IOTA had relatively good performance during the previous week, at least compared to the majority of other altcoins. IOTA started a week by testing a support level at $1, but without strength to break it on down side, the coin reverted to the up side, to the level of $1.5 which is current resistance for this coin. IOTA didn’t manage to break this level, and reverted a bit to the down side. It is currently trading around $1.2. Current charts suggest that there might again be some pressure on the up side and resistance at $1.5. In case that it is broken, then the next level which would be tested is $1.8. However, if the coin moves back to support level at $1, then the next level to watch on downside is $0.75.
During the previous week NEO was traded between levels of $51 up to $61. Current resistance level stands at $65 which the coin might test in the coming period. In case that coin reverts to the down side, support level to watch stands at $55, down to $50.
Monero (XMR) had a relatively good performance during the previous week. Coin started week testing support level at $250, but without strength to go below it, it reverted to the up side and tested resistance at $300. XMR ended the week in short term trend correction around the level of $270. It might be expected that XMR continues to put pressure on $300 resistance in the coming days. In case that this level is broken, next resistance stands at $330 up to $370. However, if the coin does not manage to make this move, then it could be expected to revert to its current support level at $270, down to $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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