Last week in the news
The US inflation figure of 6.8% y/y for November showed the highest inflation surge in the U.S. since 1982. Equity markets had already priced this increase so they have finished the week relatively flat, same as the crypto market. Bitcoin is finishing a week at the $48K major support line while Ether is still holding above $4K.
Released figures for the U.S. consumer price index show that inflation is continuing its surge in the U.S., reaching 6.8% in November, compared with the same month last year. Core inflation rose 4.8%, in line with expectations. This is the highest level of a yearly inflator surge since 1982. Markets are now expecting that FED will increase its tapering and decrease purchases of assets to $30 billion per month. It will also be further indication that sooner FED`s increase of interest rates will be inevitable in order to put inflation figures under control. On the other side, there are economists who are pointing that declining oil prices will halt inflation in the coming months. Next FED's meeting is scheduled for December 14th – 15th where more information over the course of future FED's actions will be released.
Largest crypto exchanger in Latin America, 2TM headquartered in Brazil, is launching a capital venture unit, with major focus on blockchain companies in the world. Up to now, 2TM Ventures have invested a total $32 million in 10 innovative and disruptive companies which are creating a new economy through incorporation of blockchain and cryptos. CEO of 2TM, Roberto Dagnoni said that the main goal of the company is to be “infrastructure provider for the token economy”.
Several largest Asian venture capital companies and hedge funds have announced investment of some $100 million to support further development of a new blockchain named Assembly. Assembly will operate under the IOTA network.
As reported by CNBC, based on data provided on Blockchain.com, the mining of Bitcoin has completely recovered from China`s ban some six months before. This has been concluded based on the current hashrate which surged some 113% in the last five months. As it was estimated, up to 75% of all Bitcoins mining has been conducted in China.
The Assistant Governor of Thailand's Central Bank warned against use of crypto currencies in payment transactions. As a reason she noted high volatility, risk of thefts and money laundering. She also noted the risks for the financial system of crypto payments. Thailand was one of the first countries in the world to regulate digital assets, adopting Digital Asset Act, through which, ICO`s need to get approval from local authorities.
Crypto market cap
After a few last weeks of high volatility due to new virus variants, inflator expectations and sell off on derivative markets, the previous week could be perceived as a relatively calm one on the crypto market. It seems that the market had already priced all major fundamentals, preparing for a New Year holiday. However, whether the holiday break had already started is too early to say, considering that there are still few major events which will occur till the end of this month, firstly, FED meeting which will take place on December 14th and 15th. Total crypto market capitalization finished the week relatively flat compared to the end of the previous week, at $2.21 trillion, down 1% on a weekly basis. Modest drop was led mostly by altcoins. Daily trading volumes decreased from last Saturday`s peak, ranging from $170B and $200B on a daily basis. Total inflow from the beginning of this year currently stands at $1.42 trillion, which is an increase of 179%.
Modest decrease of total market capitalization during the previous week was mostly led by the altcoins. Bitcoin was holding stable with added some $7B in market cap, while Ether lost some $2B during the same period. Solana is continuing to lose in value, despite 0.7% increase in total circulating coins. Last week the coin`s market cap was down by 16% or $10B. On the same path was Cardano, with an additional drop of some $3B or 7.6% on a weekly basis. Polkadot was down by 5%. On the other hand, Tether continued to gain, reaching additional $2B in market cap, with an increase of 2.7% in circulating coins.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Crypto futures market
Futures market started the week by pricing last Saturday`s sell off on the crypto market, and also finished the week in this manner. BTC futures have dropped below $50K. Short term maturities were down by some 10%, while maturities in December 2022 were down by 16%, reaching $51K, from $61K previously traded. ETH short term futures were down by some 5%, while maturities from April till December next year were down by 9%. December 2022 ended a week at $4.4K, down from $4.8K traded during the previous week.
Table below provides the most recent information on BTC and ETH future prices.
Bitcoin: oversold market reached, but can $48K hold?
Bitcoin started the previous week recovering from Saturday`s sell off initiated by the derivative market. Highest price reached during the week was $52K, however, soon the market reverted to down side and levels from the beginning of the week. There has not been market strength to break the resistance line at $50K, so BTC reverted down to $46.7K, which is the lowest weekly level reached during Saturday trading. BTC has now found support at MA200 line, finishing the week modestly above $48K.
Thursday`s drop in price has pushed RSI to the oversold market, reaching level of 30. It implies that some price correction might be expected in the coming days. On the other hand, the moving average of the last 50 days is continuing strongly to converge toward MA200, indicating that potential cross might occur in the coming period of time. Considering that there is still a safe distance between these two lines, it will take some time until a cross actually occurs.
BTC is finishing the week testing a short term resistance line at $48K. This is not a major level for BTC, but it is a level to watch closely for a second week in a row. In case that this level is clearly broken on the upside, it might be expected that BTC will head toward resistance at the $50K, with currently decreased probability that $55K resistance might be reached. Some pressure on the downside is evident from current charts, so there is an increased probability that BTC might revert to test support line at $45K in case that $50K resistance is not broken. Major level to watch in the current cycle is $40K, however, there is still a longer road for BTC until this level is reached.
Ether: ongoing pressure on $4K
Pressures on the downside for ETH continued also during the previous week. At the start of this week, dip buyers have pushed price of ETH up to the resistance line of $4.5K, still, there has not been enough market strength for ETH to hold around this level, and coin reverted to the downside as of the end of the week, reaching $3.830 on early Saturday trading. However, $4K with ETH is holding strong, hence, ETH is finishing this week modestly above $4K.
Despite the latest drop in price, RSI is showing that the oversold market is not close for ETH. RSI was moving in a range between 50 down to 40, indicating that price still has space to go on the downside until a clear oversold market is reached. Whether this will be the case for ETH in the week ahead is to be seen. Moving averages of 50 and 200 days are quite modestly converging toward each other, but they are still moving at a safe distance, so there are currently no indications of potential cross in the near future.
As per current charts there is high probability for short term support at $3.8K to be tested once again. In case that it does not hold, then ETH will head toward the support line at $3.6K. There is probability that this level would lead to indication of the oversold market and short price reversal. In case that market pushes price to the upside, there is some probability that the next stop for the coin will be $4.350.
Ripple: eyeing $0.7, or maybe not in this round?
After reaching the oversold market as of Saturday last week, during the previous week XRP entered into a short term price reversal, moving up to the long term resistance line at $0.9. Still, the end of this week brought new pressures on the down side and XRP reverted to $0.85 support line once again.
RSI was moving modestly above 30 during the week. It seems like there is still not enough market strength to push the coin to the higher levels. Since last week, the coin is moving below MA 200, while MA50 is continuing its convergence toward its MA200 counterpart. At the same time, the lowest level reached during the previous week was $0.74, indicating on probability that part of the market is perceiving XRP at lower price from current. Current support line for XRP stands at $0.7. In case that price does not manage to break $0.85 resistance, there is a high probability that market will push price down to $0.7, with probable shortstop around $0.75 level. In the opposite case, XRP might test $0.9 resistance one more time in the coming days.
Binance Coin: slowdown continues
Although the start of this week was promising for BNB since the coin strongly moved to the upside, still $620 was the level of market exhaustion and the coin reverted back to the downside. Although BNB is ending this week around the resistance level of $560, still, this road has started from the $520 support line. Charts are clearly showing that there is still some pressure to the downside for BNB.
RSI is not providing much information, considering that indicator was moving around 50 levels during the whole week. Moving averages of 50 and 200 days are quite modestly continuing their convergence toward each other, still moving at relatively wider distances. At this moment, BNB is testing the resistance line at $560. In case that it is broken on the upside, the coin will move toward resistance at $630. However, in the last attempt there has not been market strength to reach it. There is a higher probability for BNB to move once again toward the $520 support line. If it doesn’t hold, then the coin will probably move toward next support at $450, with a short stop around $500 level.
Cardano (ADA): oscillators at cross
As it has been expected, during the previous week MA50 has crossed its MA200 counterpart, signalling high probability that some general reversal is on the road for ADA. At the same time, the market has reached oversold territory, which is indication that some short term reversal is ahead. For the last three weeks ADA is losing its strength to push the price to the upside, at least to level of $2.0, which is, at this moment, a long road for ADA. Major support at $1.0 is emerging from charts as possible next level for this coin.
At the beginning of this week, ADA didn’t even try to recover some of the losses from last Saturday. Coin continued its road to downside, reaching its lowest level at $1.2 historical support line. As of the end of this week, the price recovered to the resistance line at $1.40, but in quite modest move. This level is currently tested, with increased probability that it might be breached to the upside. In this case, ADA has space to move toward $1.6 resistance, but there is no indication that price might go higher during the next couple of days. On the opposite side, $1.20 support might be tested again in the coming days.
LINK: is $16 the next short term target?
Two weeks ago LINK had clearly reached the oversold market, so it was expected that a short term price reversal would be in store for this coin. At the beginning of the previous week, the coin moved to the upside in order to test the resistance line at $25. However, following general market trend, the coin reverted to the downside as of the end of the week, reaching its lowest level at $18.23. Pressure on the $20 support line continues, while, end of this cycle is at the $13 support line.
During the previous week RSI didn’t go above 40, indicating that LINK still does not have market strength to push the price up from the oversold market. Moving averages are continuing to converge toward each other, still keeping the safe distance between them. Charts are showing that there is probability for previous levels at $22 to be tested again in the coming days. However, there is a decreased probability that the coin might move higher from last week's highs, since the pressure is currently on downside. In this sense, there is an increased probability for LINK to make another move toward the $16 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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