Last week in the news

Gains on financial markets continue. Latest inflation figures are pushing investors to look for a hedge within riskier assets. Bitcoin managed to reach $48K, however, finished week above $45K. Ether left $3K behind.

Based on latest developments on the market, the U.S. Securities and Exchange Commission is still not ready to accept bitcoin-based ETFs on the market. During the previous week an application from Ark 21Shares, led by Cathie Wood, for a spot bitcoin ETF was rejected. As a major issue for rejection, SEC noted lack of security in terms that fund will not be able to protect investors from fraudulent and manipulative acts. At the moment there are few ETF`s based on bitcoin futures, but despite market criticism, there are still no spot-btc ETF`s.

Grayscale, an US based investment company, is launching a new smart contracts platform fund, where clients will be able to invest in smart contracts based on Cardano, Solana or Polkadot. However, as announced, customers will not be able to invest in Ether on this platform.

One of the largest banks in the U.S. Citibank, noted in their analysis that economies related to the metaverse might be worth between $8 and $13 trillion by 2030. Their expectations are that this network might reach up to five billion users, but only if it manages to build such infrastructure which could support this level of users. It is also interesting that this report is mentioning different money which will circulate through this world, including crypto currencies and central banks digital currencies.

Kazakhstan is one of the countries which were in the spotlight of crypto miners during last year`s crypto ban in China. Many miners transferred their businesses to this country, while currently, their plans are to further benefit from the crypto industry. As per reports, Astana International Financial Centre is making a project through which it will be able to support operations of cryptocurrency exchanges. As per announcement from Kazakhstan officials, changes in local legislation have already been prepared in order to support one such project.

Indonesia`s officials see crypto currencies as commodities, in which sense, it will start charging 0.1% value-added tax on each transaction made with crypto currencies. This requirement will become effective from 1st May this year. As Reuters is reporting, there are currently 11 million crypto users in Indonesia, where crypto transactions reached their peak during the pandemic period.

Crypto market cap

Third week in a row crypto market is finishing in green. As inflation figures continue to surge in developed markets, investors are turning to riskier assets in order to hedge against inflation. During the previous week the crypto market ended at a level slightly above $2 trillion, adding $122B or 6% on a weekly basis. Last time when the crypto market cap was at this level was during mid-January this year. Daily trading volumes were also higher from the week before, ranging from $160B up to $185B on a daily basis. Total outflow of the funds since the beginning of this year has decreased to the level of 4% or $89B.

Another positive week on the crypto market, with the majority of coins managing to further erase losses from the beginning of this year. Although many coins still have not reached these levels, they are getting very close to them. Bitcoin and Ether were leading the market in nominal amounts, gaining $39B and $42B in market cap respectfully. It is interesting that it was one of the rare weeks when Ether outperformed BTC. Major altcoins also significantly contributed to the increase in crypto market cap. Solana had a significant surge of $11B in market cap, increasing it by 35%. It was a positive week also for Binance Coin, with a gain of $5B or 7%. In relative terms, one of the highest gainers was Filecoin, with an increase in cap of 33%, followed by Theta, which gained 27% in cap on a weekly basis. In terms of circulating supply, Filecoin increased it by 2.2%, and Tether is continuing a surge of coins in circulation, increasing it by an additional 1% previous week.

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

Crypto futures market

It was another positive week on the crypto futures market, with ETH outperforming BTC futures, which rarely occur on the market. Futures were following spot developments, but also have broken some long awaited levels. BTC futures are still holding above $48K for maturities as of the end of this year, but markets managed to break the $50K line for maturities as of the end of the next year.

ETH short term maturities were up by 9% compared to the close of the week before. Important developments are within maturities as of the end of this year, where ETH is holding modestly below $3.5K resistance level. As for maturities in December 2023, ETH passed this line, reaching $3.6K.

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

Bitcoin: short correction on a road to $50K

As surging inflation in the western economies is pushing investors toward riskier assets, based on the price moves it seems that major crypto currencies take the highest positions on their lists of assets. During the previous week Bitcoin continued a trend started two weeks ago, and managed to make a break of $45K to the upside. Highest level reached during the week was $48.18K, which represents the usual short term stop for BTC on the road to $50K resistance. As of the week-end, coin returned to test the $45K support line one more time. BTC is currently traded slightly above this level.

As the price of the BTC reached $48K level, RSI has reached level of 70 and clear overbought market. This level was its reversal point and indicator ended a week around level of 60. Moving averages of 50 and 200 days had their strong convergence move two weeks ago, however, during the previous week they started moving as two parallel lines, slowing down convergence move. This might indicate that a long awaited golden cross will certainly come in the future period, but with short delays on the road.

BTC is ending the week testing a $45K support line. At the start of the week ahead, BTC will continue with this move. There is a decreased probability that the next support line at $40K might be tested, in case that $45K is broken, instead, it can be rather $42K level. On the other hand, if $45K sustains, then BTC will revert back to $48K on its road toward $50K resistance.

Ether: how far is $3.6K resistance?

It was one of the rare weeks when Ether managed to outperform BTC. It seems like ETH was somehow neglected by the market during the previous period, so the coin decided to reconcile all the previous moves which have not occurred into one single week. As of the start of the week, ETH managed to make a move toward the $3.2K resistance line, easily break it and continue toward the next resistance at $3.6K. This level has not been tested, instead, ETH is finishing the week above $3.450.

Same as with BTC, a strong move toward higher levels pushed RSI to the overbought market. Indicator is still standing at 70 line. This is an indication that the market will enter into short term price correction in the coming period. Moving averages of 50 and 200 days which started to modestly converge toward each other two weeks ago, are continuing in the same manner. Modestly but gradually they are moving toward the cross in the future period.

Although the prospectus for ETH looks solid at this moment, still RSI must not be neglected. This means that short term price correction for ETH is coming within next week. Level which might be tested again is $3.2K support line. Currently, there is a decreased probability that the price might reach $3K one more time. On the opposite side, if $3.2K support holds, then ETH will revert back to the upside amid the $3.6K resistance line.

Ripple: there is low potential for $0.9        

Ripple has slowed down again. Although the crypto market had one of the better weeks since the beginning of this year, still XRP continues to trade aside. Coin started the week at $0.8 support line and was mostly traded above this level. Market reached $0.9 resistance only on one occasion as well as the level of $0.78. Side trading was again predominant for XRP.

Moving averages of 50 and 200 days started to slow down their convergence toward each other. This indicates that it might take some more time until the final golden cross occurs for XRP. RSI was pushed to the level of 62 during the week, but as of the weekend it has returned to the level of 50. Still, there is indication that the market is still eyeing the overbought side.

During the previous week XRP tried to break the resistance line at $0.85, with most of the time trading slightly above this level. Still, without strength for a clear move to the upside, the coin reverted back below $0.85 resistance. During the following week there is a high probability that this trend will continue. There is still a 50% chance for this level to be broken to the upside. However, there is also an equal probability for the $0.80 support line to be tested one more time.

Binance Coin: gradual moves toward higher grounds

As it has been expected, $440 was the level that the market was eyeing during the previous week. This is a short term resistance line for BNB, on the road toward $520 historical resistance. However, based on the current moves, there is still some time until BNB finally reaches this line. During the previous week BNB continued to modestly but gradually moves to the higher grounds, from $420 up to $440.

RSI reached level of 68, which is quite close to the overbought market, but still this level has not been clearly reached. It leaves some space for BNB to move slightly to the higher grounds until a clear overbought market, which will finally indicate short term price reversal. Moving averages of 50 and 200 days have modestly slowed down their convergence, currently moving as two parallel lines.

Current charts are showing that there is modest sell pressure at level of $440. It might impact the price to enter into a short correction. Level to watch in this case is the $420 support line, which might be tested one more time in the coming period. On the opposite side, if $440 sustains, it will open a road for BNB to move toward short term resistance at $500, on a road to $520 historical resistance line.

Cardano (ADA):  short reversal on the road?

There has been some positive news for ADA as Grayscale announced the launch of a new platform fund, where it could be invested in smart contracts based on Cardano, among other altcoins. This news put ADA into the spotlight of the market one more time and the price managed to reach a resistance line at $1.20. Highest level reached during the week was $1.24, ending the week above $1.15.

Two weeks ago RSI reached the overbought market, and continued to trade within this territory during the first half of the previous week. When the sell side was revealed on the market, RSI modestly slipped down to 65, but moves are continuing to be quite slow. Moving averages of 50 and 200 days are continuing to move as two parallel lines for a second week in a row, without indication of a potential divergence.

Charts are suggesting an increased probability for the support line at $1.0 to be tested one more time in the coming period. This is supported through RSI`s move to the overbought market. There is currently a decreased probability that price can go below this level. On the opposite side, $1.20 might be tested again, with decreased probability that the price might go higher from this line at this moment.

LINK: is $20 resistance next target?

With slow moves during the previous week, LINK managed to reach level of $18, as a highest weekly level. What is evident on the candle charts is that sell orders are still not on the market, which increases the probability that LINK might soon head to the $20 resistance line.

RSI made a modest move from 60 up to 65, but the overbought market has still not been reached by the market. This adds to the probability of potential moves to the higher price grounds for the coin in the coming period. On the other hand, moving averages of 50 and 200 days are continuing to move as two parallel lines second week in a row, not indicating potential convergence move.

Taking into account that there are still not prevailing selling orders and that RSI is still on the road to reach an overbought market, adds to the probability that LINK`s next target might be the $20 resistance line. On the opposite side, if price enters into a short correction, LINK might return back to $15 support to test it 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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