Last week in the news

Crypto currencies were traded with a mixed sentiment during the previous week, mostly driven by fundamentals. However, the majority of coins ended a week in green. Bitcoin is testing resistance at $35K, while Ethereum`s psychological level at $2K showed strong resistance.

The Financial Industry Regulatory Authority (FINRA) said on Wednesday that it has imposed a nearly $70 million fine to Robinhood Financial LLC, with additional $12.6 million which would be paid to thousands of its affected clients. As mentioned in official statement, the penalty is imposed for “systemic supervisory failures” and imposed harm to millions of its customers. FINRA found that Robinhood broke the Law and good market practice by system outages occurred in March 2020 when platform was not working during times of high volatility. It has been also found low transparency, “false and misleading” information over the risks related to options and margin trading. Robinhood is preparing to go public within next few months. Initial valuation is set at $30 billion. Currently there is no information if FINRA`s penalty will have some impact on the IPO valuation of the company. Robinhood revealed in its IPO prospectus that a large part of the company's revenues came from crypto currencies trading. Crypto trading participated with 17% in total trading revenues, out of which 34% came from Dogecoin transactions. Just as a reminder, increased interest of investors for Dogecoin during Y2020 came after several tweets from Elon Musk about this meme.

In remarks to the Official Monetary and Financial Institutions forum, held as of the end of June, Boston Fed President Eric Rosengren observed stablecoins as a threat to the financial system. In this sense, he has noted a need for higher regulation of stablecoin market in order to secure their stability. One of the most used coin in the U.S. is certainly Tether, which is 1:1 backed with US Dollar. Although there has been a lot of analysts attention during previous period on question of feasibility of token to be  1:1 baked with cash holdings, considering that Tether currently amounts some $65 billion, the actual data revealed in May by company backing Tether that it holds only 4% of actual cash, while majority of its assets are in commercial papers.

During the previous week, the Financial Conduct Authority in the U.K. has banned cryptocurrency exchanger Binance to conduct any regulated activity in the U.K. Binance is the largest crypto exchange in the world which tried to set up its business for crypto trading in Britain, however, the licence has not been issued as the company did not manage to “meet anti-money laundering requirements”.

The “gradual disappearance of cash” was the main reason for Spanish Socialist party to propose to Spanish Parliament a creation of a Spanish public crypto currency. Several weeks earlier, the European Central Bank had also announced its currently ongoing project of introduction of digital Euro. The rationale for issuance of its own digital currency has not been explained, so it remains unclear how Spanish local coin will fit into the Euro monetary system and what exact consequences might be on CB monetary policy in terms of money supply control and its potential impact on inflation. Initial proposal notes one of its major aims as to end “bank`s privilege over money”. There have not been comments from Spanish CB officials on this proposal.

China is pushing further its project on the wide introduction of digital Yuan. As per the announcement of Beijing`s metro, the company allowed its customers to purchase metro tickets using digital Yuan. At this moment, this service is available in 24 Beijing metro lines and is allowed only to customers who have open accounts with ICBC bank.

Markets, including crypto, were supported on Friday by better than expected results on the U.S. June job figures. The non-farm payrolls rose in June by 850K which is better than the market estimate of 706K. At the same time, the U.S. unemployment rate rose to 5.9% from the previous 5.8%. On this news, S&P500 and Nasdaq have reached historically highest levels on Friday.  

Crypto market cap

After almost three weeks in red, total crypto market capitalization finished the previous week in green. Market cap was standing at $1.413 trillion which is an increase of $156 billion on a weekly basis or more than 12%. Almost all coins gained, this increase is mostly led by Bitcoin and Ethereum. Daily trading volumes were in range from $170B down to $110B. Total inflow from the beginning of this year currently stands at  $620 billion, which is an increase of 78% in relative terms.

Generally increased investors confidence due to better than expected results on the U.S. economy heated financial markets during the end of the previous week. Crypto market also gained, where almost all coins ended the week in green. Bitcoin and Ethereum were leading the market. Bitcoin gained almost $55B or $9% in market cap, followed by Ethereum which added $54B or almost 25% on a weekly basis. Ripple was also one of coins with significant gain of $3B or 11%, while Cardano gained additional $5B which is an increase in market cap of 14% for this coin. Although Binance exchanger did not manage to get licence for operations on the U.K. market, it did not affect investors confidence in this coin, since Binance Coin gained some $3B or almost 8% w/w.

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

Bitcoin: price equilibrium at $35K?

Bitcoin was traded with a mixed sentiment during the previous week, mostly driven by fundamentals. During the first half of the week Bitcoin was affected with news that FCA did not approve licence to Binance exchange in the U.K. However, the second half of the week was driven by investors' expectations on the U.S. job figures, which supported financial markets to move to the upside.

During the previous week Bitcoin was traded between levels of $36.1K down to $29.8 where BTC started the week. Since the end of May, BTC is moving in a channel between levels of $30K and $40K, with significant pressure on $35K. Based on current technical analysis, level of $35K will remain in focus for some time, since obviously BTC managed to find equilibrium of supply and demand around this level with relatively decreased daily trading volumes. MA50 is currently diverging further from MA200 while RSI is moving around 50. A level of $35K will be one to watch during next week. In case that it is broken, coin will head to the next resistance level which is also top of the channel at $40K. However, there is also a high probability for the bottom of the channel at $30K to be tested again.

Ether: how strong is psychological level?  

After taking a break for a one week, Ethereum is back to levels above its psychological $2K. Although a week before, ETH moved down to $1.700, which is level where ETH last time was in March this year, coin swiftly managed to return back above $2K. During the previous week ETH was moving in a price range levels from $1.950 up to $2.280.

As per current charts, short term momentum is slowly falling toward MA200, while RSI is moving around 50. During the last four days of the week, a support line at $2.100 was tested. Some pressure is obvious, but the support level still holds. However, in case that it is broken, ETH will head toward next support at $1.950, down to $1.850. If the coin moves to the up side, then the level to watch would be resistance at $2.400.

Ripple: for how long can $0.7 resistance hold?  

Ripple started the previous week at level of $0.62 and moved to the upside, reaching weekly maximum price at $0.73. For the last two weeks resistance at $0.7 is in the spotlight of the market, testing it on several occasions, but without enough strength to finally break it. A final push to the up side would move XRP from $0.7 up to the next resistance line at $0.9 and $1.0. However, if luck of strength continues, then XRP will revert to the down side in order to test the current support line at $0.65, down to $0.5.

What’s in store for altcoins

Bitcoin Cash (BCH) was following general market trend during the previous week and was traded mostly in green territory, however in a very tight price range. Price minimum – maximum range was between $466 up to $547. Since the support line at $450 was not in the spotlight of the market, coin reverted to the upside to test resistance at $$540. BCH is currently traded around $500. At the same time short term momentum is quite closely converging toward the long term momentum line, implying that testing of $450 support line is still not over. Next support line stands at $380. In case that coin moves to the up side, then resistance at $540 might be tested again, and if broken, the next target of BCH will be $600.

During the previous week Litecoin was moving between levels of $129 up to $148. These levels are between resistance at $140 and support at $110. The $110 support has not been tested during the previous week, while the coin did not manage to break the current resistance line. At the same time, the short term moving average came across its long term counterpart. This might indicate that coin still have some space for testing support at $110 during the coming period. In case that LTC reverts to the upside, then the level of $140 will again be in the spotlight of the market.

During the previous week important news was that FCA refused to issue a licence to Binance LLC for operating activities in the U.K. Regardless of this negative news, investors' confidence in Binance coin (BNB)has not been put in question. Coin was moving between levels of $273 up to $316. Current resistance line at $300 has been tested, but since it has not been broken, BNB reverts modestly to downside. However, support at $250 has not been tested during the previous week. In this sense, a support-resistance range of $250 up to $300 will be the one to watch during the following week.

Dash (DSH) was traded in a quite modest range during the previous week, between lines $124 up to $146. Both support line at $120 and resistance line at $140 have been tested, without strength for either to be broken. At this moment DSH is in a short term reversal from $140 support. At the same time, MA50 crossed MA200, while RSI is moving around 40. This supports the probability for the $120 support line to be tested again. In case that it is broken, the next support to watch is at $100. On the opposite side, a clear move above $140 would bring DSH to next resistance at $160.

EOS continued its move to the up side from the end of a week before and made a way up to level of $4.3. EOS ended a week modestly below this level, trading around $3.9. Resistance line at $4.0 was continuously in the spotlight of the market, but without enough demand in order to make a clear break. In case EOS manages to break $4.0 on the up side, the next resistance line to watch stands at $5.0. However, in case of a short term reversal, the support line to be tested stands at $3.5.

IOTA was traded during the previous week with a mixed sentiment. Although the coin started a week from level of $0.77 and made its way up to $0.90, coin reverted soon to downside and level of $0.76, where the current support line stands. In case that IOTA continues to trade with decreased market demand, support level might be broken and coin will continue to move toward next support at $0.65. However, if it 's current level sustains pressure, then it could be expected that next resistance at  $1.0 is to be tested next.

At the beginning of the week NEO had a strong push in price from level of $30 up to $37 after which short term reversal came down to $33. However, NEO finished this week once again at $37. There is a market push to test resistance level at $40. In case that NEO fails to break this resistance line, coin will revert back to support at $30 once again. In the opposite case, the next resistance to watch stands at $45.

Monero (XMR) started the previous week moving to the upside from level of $185 up to $227. However, on Thursday the coin went back down to level of $200. Currently the coin is traded modestly above this level. In the latest move, the support line at $200 was not broken, so there is some probability that XMR will revert to test current resistance line at $230. However, in case that XMR reverts to the down side, the support line to watch is $170.

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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