Last week in the news
Start of the previous trading week was hardly hit by the geopolitical tensions in Europe, however, the end of the week brought some recovery for both equity and crypto markets. US Dow Jones index rose 700 points on Friday trading, Bitcoin is ending week testing resistance at $40K, Ether still holds below $3K.
Coinbase, one of the largest crypto exchangers, posted its earnings for the last quarter of the previous year on Thursday. With revenue of $2.5 billion and earnings per share of $3.32 the company beat market expectations. However, the company is forecasting lower figures for monthly transaction users in the first quarter of this year due to decreased crypto market volatility and capitalization.
During the previous week the US Federal Reserve adopted a new regulation, by which all FED officials and employees will be strictly forbidden to own or trade financial assets like stocks and bonds, which also includes crypto currencies. As it has been officially stated by FED officials, the aim of this regulation is to “support public confidence” in the Committee.
Although there have been rumors on the market that India is planning to ban crypto currencies, there is still ongoing discussion between Indian authorities and crypto industry professionals. News are reporting that India's government is requesting from Indian crypto businesses to halt misleading advertisements and communicate clearly with customers risks originating from crypto trading. It is also expected that India will soon adopt new tax regulation which will include 30% tax on crypto gains.
General trend of movements of bank executives to the crypto industry continued during the previous week with the latest announcement from ex Goldman Sachs executive, Bartlett. Cointelegraph.com is reporting that Roger Bartlett, a former executive of global markets at Goldman Sachs investment bank, will take over a leading position at global financial operations at Coinbase. As reported, Bartlett noted that he is passionate in his goal to “enable the next generation crypto economy”.
Crypto market cap
Previous week was one of the turbulent ones for both geopolitics and the crypto market. Although the week started with significant selloff on the markets, when the crypto market cap reached $1.65 trillion, it still managed to recover on Friday and Saturday trading, ending the week flat compared to the week before. Total crypto market capitalization has finished the week at a level of $1.76 trillion, some 1% lower on a weekly basis. Daily trading volumes were relatively lower, but stable, moving around $150B on a daily basis. Total outflow of the funds since the beginning of this year holds at level of 19% or $422B.
It was a quite volatile week for the crypto market impacted with geopolitical tensions which influenced negative investors sentiment. Still, the majority of coins recovered from the negative start of the week, finishing the week relatively flat. However, there are also coins which were not in the spotlight of investors as of the weekend. Bitcoin made a strong recovery on Friday, managing to lose only $17B in market cap on a weekly basis or some 2%. On the other hand, some popular coins like BNB and Cardano are still on hold with recovery. Binance Coin is finishing the week with a decrease of $4B or 4% in market cap, and Cardano with a loss of $3B or 9% in a single week. At the same time, Ether managed to gain additional $2B or less than 1% in a single week. Although Uniswap had dropped in price, still the coin managed to sustain a flat market cap due to an increase of coins in circulation by 8%.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Crypto futures market
In line with developments on the spot market, the crypto futures market finished week lower from the week before. BTC futures with shorter maturities were down by some 3%, with expectations for BTC to finish March at level of $39K. On the other hand, drop in futures with higher maturities was around 6%, where December 2022 ended a week around $40K, lower from $43K from end of the previous week.
ETH futures had a higher drop for shorter maturities of some 6%, with the end of March still holding above $2.7K. Maturities for the end of this year were almost 9% lower, ending the week above the level of $2.7K. This is a significant drop from the last week, where close for the same maturity was holding to $3K.
Table below provides the most recent information on BTC and ETH future prices.
Bitcoin: sentiment is positive, but fundamental risks are still holding
High geopolitical tensions marked the previous week which triggered negative investors sentiment for investments in riskier assets. Drop of BTC to the downside was expected to some extent, however, it was a very positive move as of the end of last week, where BTC quite easily recovered the minute the market digested current fundamental developments. Lowest level reached during the week was at $34.5K, while BTC is ending the week modestly below the $40K resistance line.
Regardless of selloff at the beginning of the previous week, there are some modest but positive developments in technical indicators. Moving average of 50 days continues to slow down its divergence from MA200 counterpart. It is too early to note whether the MA50 trend will revert back toward MA200 in the near future, but at least there are some indications that it might occur in the coming shorter period of time. RSI moved down to 36, however, a clear oversold market has not been reached during the last move to the downside. Indicator moved up to 45 as of the end of the week, still not providing indication that BTC will make a clear move toward the overbought market.
On a positive side is that BTC managed swiftly to recover from selloff in the first half of the previous week, which implies that there is still positive market sentiment toward this coin. However, fundamental risks are still on the market, which could again make their influence on financial markets in weeks to come. If we follow simple technical analysis, BTC will continue to test the resistance line at $40K in the coming days. In case that it is broken to the upside, the coin will head shortly to $43K, in an attempt to reach the next resistance at $45K. However, if more negative fundamental news hit the market, then BTC might again revert down to $38K, eventually $35K support line.
Ether: despite low recovery, $3K is still target
Although ETH is perceived as a shadow of BTC, still during the time of hard fundamentals it seems like ETH is heavily lagging behind BTC when it comes to recovery. At the beginning of the previous week, ETH headed to the downside, with lowest level reached at $2.3K. Coin swiftly started a path of recovery but only to the level of $2.880, struggling most of the time to break $2.7K. Market confidence reflected on the futures market reveals that market is not so confident that ETH might soon reach its psychological target of $3K.
There are smooth positive developments with moving averages, as MA50 started to slow down its divergence from its MA200 counterpart. It might be an indication that convergence of two lines might start soon, however, it will take some time until this technical indication fully confirms itself. RSI made a move from 37 up to 48, but it still does not indicate that the coin started its road toward an oversold market.
ETH is currently testing the resistance line at $2.850. In case that this line is broken to the upside, the coin will start its road toward psychological $3K level. However, risks from negative fundamentals are still holding the market to make clear moves. In case that more negative fundamentals hit the market in the coming week, ETH might revert to the downside once again to test the support line at $2.630.
Ripple: targeting $0.85
Two weeks ago XRP made a promising move toward $0.85 resistance, with indication that it might reach long term resistance at $0.9. However, fundamentals were not on the side of the crypto market, so the coin turned to the downside, in line with general market sentiment, and pushed the price back to $0.7 levels. Lowest level reached during the week was $0.62 but only on one occasion. Coin swiftly returned to previous levels and finished the week around $0.75 resistance.
Despite sharp moves to the downside, moving averages of 50 and 200 days are slowing down their divergence from each other, which is a positive indication. RSI made a move down to the 44, however, the indicator is finishing the week modestly above 50. This adds to the probability that the coin might revert and make its move toward the oversold market in the coming days.
Technical analysis is suggesting an increased probability for XRP to make a move toward the $0.85 resistance line to test it once again in the coming days. There is currently a lower probability that this line might be breached in the short future. On the opposite side, there is an equal probability that the $0.7 support line might be tested once again.
Binance Coin: smooth recovery
BNB started the previous week with a break of $400 short term support line, following general downtrend on financial markets. Lowest level reached during the week was $320, however, only on one occasion. Coin swiftly returned back and headed toward the short resistance line at $400, however, the highest level reached during the week was $386.
Moving averages of 50 and 200 days are still on the divergence road, without any indication over its potential slowdown in the coming period. RSI was moving between 38 and 44, still not providing indication that the coin might pass the 50 line and head toward the oversold market.
BNB`s recovery is currently moving smoothly. Indicators are showing that there is still no significant market strength which might push the price to the upside. As per current charts, there is a higher probability that BNB will head toward a short term resistance line at $400 to test it, with decreased probability that resistance at $430 might be reached within the next couple of days. On the opposite side, there is a probability for the support line at $350 to be tested one more time.
Cardano (ADA): continues to lose strength
Regardless of general market sentiment, ADA is continuing with its slow movements to the downside, losing its strength for moves above $1.0. During the previous week ADA managed to break a support line at $1.0 and push the price down to the level of $0.80. Lowest level reached during the week was $0.74 but only on one occasion.
RSI made a move down to the level of 33, but a clear oversold market has not been reached. Instead, RSI modestly reverted to 37, however, the indicator does not clearly point that the coin is on the recovery path. For the last three weeks, moving averages are continuing their clear divergence from each other, without indication of its slowdown.
Current charts are suggesting that ADA is continuing to lose strength and that move to the upside will be put on challenge in the coming days. There is a higher probability that a short term support line at $0.8 will be tested in the coming days, with decreased probability that next support at $0.7 might be reached. On the opposite side, there is a probability for ADA to try to test $1.0 resistance line for one more time, with decreased probability that this level might be breached.
LINK: long road to $20 resistance
Following general market trend, support line at $15 could not be sustained due to negative market sentiment, and LINK headed to the downside to test short term support line at $13. Lowest level reached during the week was $11.3 but only on one occasion. LINK is finishing the week around $14.6 level.
RSI reached level of 33 and reverted back to 44, where clear oversold market has not been reached. Moving averages of 50 and 200 days started their higher divergence from each other, indicating that slowdown will not be in store for some time.
Current charts are suggesting that LINK will continue to test the $15 resistance line in the coming days. In case that it is broken, the coin will head shortly toward the $17 line, however, there is not much probability that the $20 resistance line can be tested in the coming period. On the opposite side, there is a probability for the $13 support line to be tested one more time.
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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