Last week in the news
Latest output of economic data is modestly increasing investors' confidence that inflation in the US might be slowing down, after the latest measures imposed by the FED. The US equities finished the week in a positive territory. However, the crypto market is currently on hold. Bitcoin is finishing the week modestly below $28K, Ether holds above support at $1.750.
One of the favorite FED`s indicators for inflation estimate is Personal Consumption Expenditure in the US. This indicator rose 4.9% in April, which was in line with market estimates and significantly less from March`s 5.2%. This figure brought some relief on the financial markets as it will mean that FED will probably slow down with further increase in interest rates, but it still does not mean that FED will halt further liquidity squeeze from the market, so further risks for financial markets still exist, as inflation in the US still holds at 8.3% y/y in April.
Investors who founded Terra project are not ready to give up on it, after its recent total debacle on the market. As per news, they are ready to renew Terra 2.0 ecosystem, whose recent crash of UST and LUNA caused estimated losses of around $60 billion. Terra will launch a new blockchain and airdrop new LUNA tokens to users who already possess the old LUNA and UST tokens. On the other hand, analysts are skeptical if this project might still be a success, considering that it would be extremely hard to rebuild market trust.
At the World Economic Forum held in Davos, Switzerland, last week, almost half of participants were from the crypto industry. At an event called Promenade, where people from various businesses are able to meet people from governments, the most dominant businesses were from the crypto world including Meta and SaleForce. This is the first time in history of WEF meetings that the crypto businesses are taking the lead among all other industries.
Binance is continuing its expansion in Europe with its latest office in Italy. Last week the company secured an operating license for offering virtual asset services in Italy from a local regulator. Binance recently gained regulatory approval for operations in France, Bahrain and Dubai.
Elon Musk again supported Dogecoin by tweeting that SpaceX will soon allow for commercial items related to this SpaceX project to be bought using DOGE coin. After he tweeted this news, the coin`s price was increased by 10%. Musk` s company Tesla has allowed the same purchases since December last year.
Crypto market cap
Despite indications that inflation in the US is slowing down, the crypto market continues to trade sideways. Dip buyers are still on hold, waiting for comments from FED in relation to their further moves to cope with inflation. During the previous week total crypto market capitalization decreased by an additional $57B or 5%, ending the week at a level of $1.19 trillion. Weekly decrease was led by Ether, second week where this coin is outperforming BTC, unfortunately, in a negative way. Daily trading volumes were further decreased, moving around $135B on a daily basis. Total outflow from the beginning of the year is nearing $1B, which is a decrease of $45% within five months.
For a second week in a row Ether is leading drop in total market capitalization, and beating the BTC for a second week. During the previous week Ether lost almost $24B, which is decrease of 10% on a weekly basis. Bitcoin took second place when it comes to funds outflow, losing during the week $10B or almost 2% of market cap. Significant drop had Solana, with decrease of $3B in market cap or 17%, while XRP continued its turn to the downside, with another drop of $1.5B or 7% during the week. Group of coins which lost above $1B includes Binance Coin, whose market cap was down by additional 2%. On the other hand, there were gainers during the week, like Ethereum Classic, which gained 11%, followed by Bitcoin Gold, with weekly increase in market cap by 15%. Tether continues to decrease coins in circulation, losing an additional 1% in market cap, or $730 million within a week.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Crypto futures market
Spot market was traded sideways; however, investors on futures markets were not so optimistic during the week. BTC`s both short and long term futures were down around 2%, where maturities as of the end of this year are holding modestly above $30K. On the other side, ETH futures experienced much higher drop. Short term futures were down by some 10% in line with the spot market; however, the latest price for the end of this year was down by 14% on a weekly basis, reaching level of $1.780, and below the $2K psychological line for ETH.
Table below provides the most recent information on BTC and ETH future prices.
Bitcoin: sideline trading continues
During the last two weeks the crypto market has traded sideways. Investors are still weighing the current business environment marked with high inflation and central bankers lifting interest rates in order to cope with it. Insecurity is never welcomed by investors; hence, it might take some time until markets turn again to the upside.
At the beginning of the previous week BTC made a move toward the $30K resistance line to test it. There has not been enough market strength to break this line to the upside, so the market returned down to the short term support line at $28K, where BTC is finishing week. RSI moved from oversold territory, but for the last two weeks the indicator has not made a move above 37. Sideways trading is clearly reflected by the RSI. At the same time, moving averages of 50 and 200 days are moving as two parallel lines with downtrend, where MA50 started to move faster away from its MA200 counterpart. There is no indication that a cross might occur any time soon.
Technical indicators are slowing down, which increases the potential that fundamentals will push the market to make a move toward next levels. This is the main reason why at the current moment technical analysis should be taken with precaution. Since BTC made its move down to the short term support line at $28K, it opens a way for BTC to move further down to the next support line at $25K. This might happen in case of some further negative fundamental news on the market. On the other hand, there is an equal probability that BTC will make a move toward the $30K resistance line in order to test it once again.
Ether: again in oversold territory
Another week in a row Ether outperformed BTC but again in a negative way. Namely, Ether was a coin which had the highest drop in market cap of around $24B, losing additional 10% in value. This drop definitely pushed the price below the $2K psychological line where the support line at $1.950 has been clearly breached. Lowest level reached during the week was $1.700. Ether is finishing the week modestly above this level.
With the latest market move toward the $1.700 level, RSI returned to downside, reaching again the oversold market, for a second time within the last two weeks. RSI is finishing the week at level of 32. Moving averages of 50 and 200 days continue to move as two parallel lines with downtrend, with MA50 increasing its divergence from MA200.
During the week support lines at $1.950 and $1.850 had been breached, and ETH finished the week testing $1.700 support line. There has not been market strength to push the price further to the downside, so ETH reverted a bit back in order to test the $1.800 resistance line. In case that this resistance line is breached to the upside in the coming period, there is probability that ETH will return back to $1.950 resistance to test it once again. Considering that ETH is currently moving in oversold territory there is a decreased probability that the price might be pushed further to the downside, in which case it would be a signal that ETH is heading toward the $1.520 support line. Further negative fundamentals might trigger such a move, while at this moment there is very low probability for it.
Ripple: downside pressures continue
During the previous week, XRP continued its slow moves around the $0.4 support line. Still, downside pressures continued during the week. This was particularly evident on Friday`s trading when volume of daily trading reached double the size of previous sessions, with prevailing selling orders. Price of XRP moved down to $0.37, however, the coin managed to sustain this level and not slip further.
For one more time within the last two weeks, RSI has been pushed to the oversold territory. At this moment, it seems so hard for currency to revert its path toward the overbought line. RSI continues to move around level of 30, with no indication that reversal is ahead. Moving averages of 50 and 200 days are moving to the downside for some time now, where MA50 started its stronger divergence from MA200 counterpart.
At this moment it is positive for XRP that the coin manages to sustain a $0.4 support line. Although it has been modestly breached during the previous week, the move to the downside has not been strong enough to move the coin away from this level. Current charts are showing potential for this level to hold in the coming period. However, in case of negative fundamentals, there is a probability that the price of XRP might be pushed further down to the next support line at $0.35.
Binance Coin: $350 continues to be a target
During the previous week BNB continued its recovery from the push to the downside two weeks ago. Coin managed to reach its highest weekly level at $337, however, on Thursday`s trading it reverted to the downside and finished the week at levels modestly above the $300 support line. Certainly during the week the coin was supported by Binance Coin`s further expansion to Italy, after France, Bahrain and Dubai. What caused this push to the down side, is still unclear. What charts are currently suggesting is that the $350 resistance line continues to be a target for BNB in the coming period.
RSI is clearly showing that the coin started its reversal to the overbought market after BNB reached a clear oversold market two weeks ago. During the week the indicator reached level of 50 and finished the week modestly below this level. At the same time moving averages of 50 and 200 days are continuing their downtrend as two parallel lines. There is still no indication over a potential cross in the near future.
Technical indicators are clearly showing that there is potential for BNB to test the $350 resistance line in the coming short period of time. Coin is currently testing a $300 support line which will continue to do during the first days of the following week. There is currently decreased probability that this line might be breached to the downside. Only in case of potentially negative market fundamentals, price might revert to the downside, in which case the path toward the $250 support line will be open.
Cardano (ADA): reversal is still on hold
Cardano continues to struggle with price reversal, after the coin reached a clear oversold market two weeks ago. During the previous week ADA continued to move to downside, reaching its lowest weekly level at $0.44, where it is finishing the week. RSI is not moving from the oversold market, with the highest weekly level at 35. This is a signal that the market is still not eyeing short reversal, which continues to be on hold. Since the beginning of this year, moving averages of 50 and 200 days are moving as two parallel lines with clear downtrend.
Current charts are not looking quite in favor of ADA. There are continuing prevailing selling orders on the market which might push the price of ADA further to the downside. What is currently positive is that daily trading volumes have decreased, in which sense, price could not be pushed too much lower from these levels. However, any negative fundamental news, might support further price decrease. On the opposite side, there is some probability that the price might revert modestly toward the $0.5 level in order to test this resistance line one more time.
LINK: low probability for stronger reversal
During the previous week LINK was clearly traded sideways. Price of the coin was moving modestly toward level of $7.6, however, during Friday`s trading price reverted again to the downside, ending the week around $6.5 level. Price recovery, after reaching a clear oversold market, continues to be on hold, as there is still ongoing selling pressure for this coin, but luckily, with significantly decreased daily trading volumes.
RSI continues to move in the oversold zone. Highest level reached during the week is 34, which clearly shows that the market is still not ready for a price push toward upside. Moving averages of 50 and 200 days does not provide much support to technical analysis at this moment, as they continue to move as two parallel lines with downtrend.
Based on technical analysis there is potential for LINK to move toward the $6 support line in order to test it for one more time in the coming few days. On the other hand, there is equal probability for a move to the upside and long term resistance line at $8.
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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