Last week in the news

Previous week was marked with several news related to regulation of the crypto market, which made an impact on the sharp drop of major crypto currencies. Bitcoin was traded down to $45K while Ether made a move to $3.2K.

As Reuters reported, the U.S. Treasury Department officials met with financial industry executives in order to discuss risks and benefits of stablecoins. This meeting is perceived as a step further in future regulation of this market, considering its strong expansion during the last few years.

As it has been announced by Coinbase, the company received a notification from the Securities and Exchange Commission that the company will be sued in case of a launch of the Lend program. The Lend program refers to allowing Coinbase customers to earn interest by lending USDC. SEC did not provide further explanation why such a product would be a legal issue.

Switzerland`s stock exchange is one of the first stock exchanges which will offer bonds and stocks as digital tokens. Plans for digitalization of the stock exchange were initially established in 2018, while during the previous week, SIX managed to obtain a licence from Swiss regulation in order to start with operations. Digital stock exchange will support blockchain-based securities. Thomas Zeeb, executive in SIX told CNBC that this is only the beginning of digitalization in financial markets and that “we will continue to work with our clients, regulators and other stakeholders to shape the markets of the future”. Exact date when the digital stock exchange will start operations has not been announced.

Ukraine is another country in the world which adopted regulation which legalizes transactions in crypto currencies. Until the adoption of this law, crypto currencies were circulating in the country, however, in the gray zone. The importance of this law is to set legal ground for further innovations and development of businesses around crypto assets and protection of investors.

In a speech held on Friday at Eurofil Financial Forum held in Slovenia, Benoit Coeure, head of the Innovation Hub of the Bank for International Settlements stressed the urgency for central banks to dig into field of CBDC`s as increasing stablecoin market puts high challenge on existing financial systems. He has noted that stablecoins, DeFi`s and big technological companies will put pressure on current business models of the banks.

Founders of crypto tokens Solana managed to raise $314 million of new funds in order to further support token to fit into decentralized finance and non-fungible tokens and will attempt to increase network speed while decreasing costs of transactions. Raise of funding was led by Andreessen Horowitz, a venture capital firm based in Silicon Valley. Since the end of August token`s value has increased by 270%, from $80 up to $216.

During the previous week, the U.S. Treasury Secretary Jannet Yellen urged the U.S. Congress to raise the current debt limit, putting in question future government financing in case that current limit remains at the same level. She also mentioned that funds might be exhausted as soon as October this year.

Binance.US officially announced that they will support Cardano`s hard fork and network upgrade, which will take place on September 12th at approximately 21:44 (UTC).

Crypto market cap

News regarding potential regulation of the crypto market, followed with SEC`s rejection of approval of Coinbase`s crypto lending product have moved the crypto market on downside during the previous week. Total market capitalization dropped by 8% on a weekly basis, ending the week slightly above $2 trillion. Highest drop in notional amounts was with currently most popular coins on the market, like BTC, ETH, BNB and ADA. Daily trading volumes have been increasing, now moving between $250B and $300B. Total inflow from the beginning of this year stands at $1.29 trillion, which is an increase of 163%.

Although the majority of coins ended the previous week in red, there are still several coins with a very good week. Price movements from several past weeks are implying that current investors focus is on coins with potential in DeFi`s and NFT`s, as well as stablecoins. Demand for Tether continues to rise, as coin gained an additional 2.3% in market cap. Another coin which gained almost 20% on a weekly basis is OMG. On the other hand, the most popular coins lost some portion of their market value. Bitcoin was leading the list with a decrease in market cap of $90B or 9.5%, followed by Ether which was down by almost 17% or $76B. Cardano and Binance Coin lost some $15B each.

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

Crypto futures market

Following developments on the spot market, both BTC and ETH futures prices have decreased compared to a week before. Highest drop is with futures maturing until the end of this year, with some 10% decrease for BTC futures and 17% for ETH futures.

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

Bitcoin: how probable $40K is?

After execution of options which pushed BTC price to resistance level at $50K, coin reverted during the previous week to test support line at $45K. Lowest price reached during the week was $43K, but it occurred during quite short period of time, after BTC reverted back to $45K support. RSI made a move below 50, but it is still not near the oversold zone. Moving averages of 50 and 200 days have moved quite close to each other, increasing potential for their cross. Although during the last several weeks BTC price found support at 200-days moving average, with the latest price move this support was broken.

Current charts are revealing some pressure on the downside. This increases the probability for the next support line at $40K to be tested in the near future. However, BTC is still holding to $45K support, so this would be a level to watch in the coming days. In case that it is broken on downside, BTC will head shortly to $42K in its move toward the next significant line at $40K. In the opposite case, there would be room for $50K resistance to be tested one more time.

Ether: new ATH on hold      

With its latest push of price to level of $4K, ETH reached a clear overbought market and entered into short term reversal during the previous week. Price was moving from $4K down to $3.015 which is the lowest level reached on a weekly basis. During the week, ETH was testing the resistance line at $3.500 on several occasions, but finished a week below this level. RSI is currently moving around 50, not indicating potential reversal.  Moving averages of 50 and 200 days are speeding divergence from each other, however, ETH is currently finding support at the 50-day MA line. Daily trading volumes increased at the beginning of the week, but modestly dropped down during the course of the week.

Based on current charts, there is decreased probability for ETH`s move to the upside in order to challenge old ATH from May this year at $4.350. Level which is currently in the spotlight is the resistance line at $3.500. There is a high probability that this level will be tested once again in the coming days. In case that it is clearly broken, it will open a way for ETH to move to the next resistance at $4K. However, if market strength remains lower, then it might be expected for ETH`s reversal to the support line at $3K, down to $2.850.

Ripple: channel continues to hold  

Last week Ripple started with testing resistance at $1.4, however soon reverted to downside, following general market trend, and finished week at levels modestly above $1.0 support line. Lowest level reached during the week was $0.95. XRP is currently finding support at 50-days moving average. MA50 and MA200 are continuing to diverge from each other. RSI is modestly below 50 not indicating a potential reversal soon.

Channel still holds for XRP. Coin is continuing to move between levels of $1.0 and $1.3 regardless of its short break at the beginning of the previous week. Charts are currently showing modest pressure on downside, but with MA50 as a support line. Level to watch during the following few days is the support line at $1.0. If the market finds strength to break it on the downside, the next level to watch is $0.9 as a long term support line for XRP. In case that support holds, then it might be expected for XRP to revert to the upside in order to test resistance at $1.2, eventually $1.3 which is the top border of a channel.

Binance Coin: how strong is $380 support?

Since the end of August BNB was testing $520 resistance on a several occasions, but up to now, this level remains unbreakable for BNB. In its last attempt BNB did not manage to go above resistance line, hence, reverted to downside in order to test support line at $430 and shortly next support at $380. BNB is currently finding support at 200-days moving average. Oscillators are continuing slowly to diverge from each other. RSI went all the way down to 40, but it is still not indicating oversold market.

As per current charts, there is high probability that BNB will continue to test support line at $380 in the coming period, especially with decreased trading volumes. In case that it is broken on the downside, next support line stands at $350. In case that it is not broken, then next target of BNB will be resistance line at $450, with decreased probability of testing $520 for one more time.

Cardano (ADA):  all eyes are on Alonzo upgrade

As hard fork is coming due, nervousness of both developers and markets is increasing. During the previous week, Cardano founder Charles Hoskinson warned of a “massive FUD storm” which happened during the previous week. As analysts are noting this FUD came mostly from Ethereum proponents. During this FUD, ADA`s price significantly dropped. Lowest level reached during the previous week was $1.96. However, the coin soon recovered, ending the week around $2.7 level.

September 12th will be a very important day to watch, as Alonzo upgrades will go live. Markets have positioned during the previous few weeks in expectation of this date. If everything runs smoothly after a major upgrade, there is a high probability for ADA to try to break current ATH at $3.09. However, in case of any upgrade issues or obstacles, the market might turn to the opposite side. In this sense, September 12th should be perceived as a good day for ADA, but also as a date of increased risks for investors.

LINK: back in the channel?

During the previous week LINK returned to levels at which the coin was moving since the beginning of August this year. After reaching a level of $36.3 on Monday, LINK made a strong reversal to the downside, moving all the way to the support line at $25. Coin is ending the week slightly above this level.  RSI is around 50, not indicating any reversal soon. Moving average of 200 days is slowing down, while MA50 is strongly converging toward it from the downside. Cross is still not in store, but might be in the coming period.

In case that $25 support line is not broken in the coming days, there is an increased probability that LINK will make its move toward the next resistance line at $30, with decreased potential for a move to $35 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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