Last week in the news

Posted high earnings of US companies supported investor’s optimism both for equity and crypto market during the previous week. Both S&P and Nasdaq finished the week at higher grounds, surging by 1.5% and 2.4% respectfully. Crypto market surge of 11% was led by majors, where BTC was looking for a break of $40K resistance and ETH was testing $3K.

The US Department of the Treasury released a study on the high-value art market, noting that there are high risks of money laundering in emerging NFT`s market. The same study is noting that there is decreased risk for terrorism financing through this market. As a resolution, the study is recommending high transparency and implementation of AML rules.

Large winter storm, which hit the US during the previous week, has left its consequences on power grids in Texas. In order to help authorities to cope with electricity shortages, the crypto miners, who are situated in Texas, have powered down their mining operations. Riot Blockchain, the biggest crypto miner in the US is currently operating with 1%-2% capacity.

Winter Olympic Games are officially open in Beijing, while the International Olympic Committee, for this purpose, has launched a mobile game which incorporates NFT`s. Namely, as gamers make progress in the video game, they are rewarded with NFT`s, which then can be traded or simply collected.

During the previous week the crypto derivative market has reached its new all-time highs in volumes. As per analysts estimates, it represented 61% of all trades in crypto`s during the last week. Rationale behind this surge in futures and options trading are purely speculative, analysts say, as the crypto spot market has been in decline recently, traders turned to speculation over BTC and ETH future prices.

Crypto market cap

Posted high earnings of US companies supported investor’s optimism which was reflected also in the crypto market. Total market capitalization of the crypto market has been increased by $190B or 11% on a weekly basis, while major coins were the main supporters of this increase. Daily trading volumes were modestly increased from the week before, and were moving around $230B on a daily basis. With the latest surge, total outflow of funds from the beginning of this year was decreased to 14% from previous week`s 14% so the total funds outflow currently stands at $300B compared with the end of 2021.

Another week in a row major coins are contributing to the increase in total market capitalization. Bitcoin is still leading a list with added $78B or 11%. BTC is followed by Ether, who gained $60B and managed to increase its market cap by almost 20% on a weekly basis. Other major coins with good performance were Binance Coin with an increase of 10% or $6B and Solana, which increased its market cap by $6B or 23% on a weekly basis. With respect to coins in circulation, Tether had a modest drop of 0.3%, while Filecoin continued to increase its coins in circulation from the beginning of this year, adding an additional 1.7% during the previous week.

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

Crypto futures market

The latest lower volatility on the crypto market made an impact on increased speculative drivers among investors. During the previous week crypto derivatives market reached its new ATH in volumes. As per analysts, it represented 61% of all trades on the crypto market. All maturities for both BTC and ETH futures were traded higher from the end of the previous week. BTC shorter maturities were up by some 8%, while there has been a change of 2% for maturities as of the end 2022 and 2023. BTC is still holding around $40K for the end of both years.

ETH futures had a stronger push in prices, which was in a range of 17%-20% for maturities until May this year, while maturities ending years 2022 and 2023 were up by 10% both. Price of ETH ending this year still holds below $3K.

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

Bitcoin: to be or not to be $45K?

Bitcoin continued its recovery from losses from the beginning of this year and managed to gain an additional 11% during the previous week. Investor’s optimism was increased due to posted high earnings of the US companies; however, analysts are noting that the BTC market is still highly leveraged and that some higher volatility might again happen in the future. Investors have currently turned to futures and options markets, speculating regarding BTC`s future prices, seeking higher returns.

Bitcoin started the previous week modestly above $35K, and continued to test this supporting line during the week. Major break to the upside occurred on Friday, when the coin reverted to test resistance line at $40K. During Saturday trading, resistance line has been broken to the upside, however, BTC is continuing to trade around $41K. RSI made a strong move from levels above 30 up to 55. As of the end of the week, the moving average of 50 days started its slowdown of divergence from its 200-days counterpart. Whether MA50 will start to converge toward MA200 in the coming days is still too early to be noted. However, it brings some optimism that this might soon occur, which will indicate potential for BTC`s reversal from current levels.

At this moment the chart is moving in a positive direction, however, there are still pending risks, which does not allow too much optimism for the coming period. Resistance line at $40K has been broken, which is on the positive side. Still, coin is continuing to test this, now support line. As investors turn to the futures market, there is a risk that the spot market will not have enough strength in the next couple of days to clearly move away from $40K support. In case that this occurs, then BTC will head toward the next resistance at $45K, with a short stop around $43K. On the other hand, there is some probability that BTC might shortly revert down to $40K, eventually $38K to test it once again, before final turn to the upside.

Ether: is it too early for higher optimism          

In line with increased market optimism, Ether made its path to the upside from levels of $2.4K up to $3K, where the coin is ending the week. However, it must be taken into account that two weeks ago moving averages of 50 and 200 days made a clear cross, indicating increased potential for the coin to make its further moves to the downside.

A strong push in price at Saturday`s trading moved the RSI to the levels above 50, which is indication that the coin is recovering from recent oversold market. It also indicates that there is space for the price to go higher until it reaches a clear overbought market. On the other hand, moving averages are pointing to risks that the coin is still not ready to recover to the levels from the end of last year.

ETH is currently testing the resistance line at $3K. Whether it will be broken in the coming days will depend purely on market strength to move price to the higher grounds. In case that resistance line is broken, the coin will head toward the next short term resistance line at $3.3K. However, if there is no strength for such a move, then it might be expected that ETH will shortly revert to the support line at $2.850 to test it once again.

Ripple: is short term recovery sustainable?        

Despite general market optimism, Ripple recovery  was conducted in a sort of slow motion. Previous week XRP continued its low volatility, while on Friday the coin managed to move from levels around $0.6 support line up to $0.65 resistance. During the Saturday`s trading short term up move continued to the level of $0.68, but the coin did not have strength to clearly break $0.65 resistance, neither to move to next resistance at $0.7.

Moving averages are still diverging from each other, without any slowdown in sight. RSI continued its move from levels of 30 up to levels of 40, but half of the road toward the oversold market has not been reached. Current charts are showing that there is some potential for the resistance line at $0.7 to be tested in the coming period. That would be the case if current $0.65 resistance is clearly breached. On the opposite side, the coin might revert to $0.60 in case that current resistance line sustains.

Binance Coin: crossing oscillators

During the previous week BNB moved from its slow-motion volatility and made a short recovery to the level of $400 from $360 previously traded. Highest weekly level reached was $430, still, the coin swiftly returned back to the support line at $400, where it is ending the week.

As it has been expected for some time now, moving averages of 50 and 200 days finally made cross, where MA50 crossed MA200 from the upside. In technical analysis this is indication that potential short term downtrend might be ahead for this coin. Since cross occurred as of the end of the week, it will need couple of following days to confirm itself. RSI have moved up to the level of 50, indicating that the coin is currently on a halfway to its overbought market.

Current charts suggest that the coin will continue to test the current resistance line at $430. There is currently decreased probability for the break toward next short term resistance at $500. Since the support line at $380 has not been tested, it increases probability for BNB to head toward this line before it makes a move to the upside and test $430 again.

Cardano (ADA):  oscillators are slowing down

Since the end of January ADA has significantly decreased its volatility. This came after the coin reached the $1.0 support line and also ended a cycle from July last year. After this level, the  market was not on a sell side, hence, it was expected that ADA would set a road of recovery. That the bottom line has been reached, modestly confirms the current slowdown in oscillator`s divergence. MA50 is currently slowing down its move away from its MA200 counterpart, and it might be expected that it will soon start a convergence path toward MA200.

RSI is currently on the half way to the overbought market, which adds to ADA`s potential for a move to the upside. Highest level reached during the week was $1.17, however, the resistance line at $1.20 has not been tested. This increases the probability that ADA will make a move toward this level in the coming days. In case that there is no clear market strength to go above this level, ADA will revert for one more time to the support line at $1.0.

LINK: high potential for higher grounds

For the last two weeks LINK has been struggling to find a way to reach the resistance line at $20, but despite general market optimism, coin is still missing this move. Although during the week LINK tested for one more time support line at $15, it swiftly reverted to the upside, but only to the level of $18.

Charts are pointing to positive developments in moving average lines of 50 and 200 days. They are still moving as two parallel lines, with potential for MA50 to start converging toward MA200 from the downside. This cross would indicate high probability for a short term trend reversal to the upside, however, at this moment, there is still time until this cross actually occurs. RSI moved to the level of 45, however, there is still a long road until the clear overbought market.

Level to watch in the coming days is the resistance line at $20. It has not been tested during the last two weeks, which increases the probability for LINK to make this move in the coming period. There is currently no indication that the coin might go above this level in the coming days, except in case of some strong fundamentals behind such a move. On the opposite side, there is some probability for the support line at $15 to be tested for 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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