Last week in the news
Bitcoin and Ethereum hit new all time highest levels which were supported by Coinbase listing on the stock exchange during the previous week. Overall, investors optimism continues to be high as both the stock and crypto market are performing in a strong up trend for the last few weeks, regardless of short term reversal as of the weekend.
Dogecoin made astonishing performance, with price moving from $0.18 up to $0.45 in a single day. It is still unclear whether Elon Musk supported interest in DOGE, considering that he again tweeted about this coin. However, some analysts are noting that there might be speculation in the question, so investors should be careful about taking too many risks on this coin.
Coinbase listing on the stock exchange increased investors' confidence in digital assets, as it is perceived as another milestone of crypto business occupying mainstream. As of April 14th, Coinbase went public through listing on Nasdaq. On the first day of trading the company was valued at $86 billion. Pre-listing valuation was standing at $68 billion. Although this is a huge success for one relatively new sector of business, there are analysts who are pointing to high risks of investing in stocks of Coinbase and similar companies. Major concern is related to extreme volatility of the crypto market, mostly Bitcoin which is driving it, and which might impact high volatility of stock price. When asked about this issue in an interview with CNBC, CEO of Coinbase Brian Armstrong noted that the company is not correlated to particular crypto asset, but there are more than hundred crypto assets to which it is exposed, so investing in Coinbase shares could be perceived as sort of “index bet”.
The Central Bank of Russia announced issuance of its own digital currency as of the end of last year. As per latest information available, the rollout of testing phase should start as of the end of this year. As noted in publicly available consultation paper, the aim of digital currency is to “boost competitiveness of the economy” and would not replace paper money which is still going to be in regular use along with giro and digital money.
Turkey will officially ban payments in crypto currencies noting that it represents high risks due to its anonymity which could lead to high losses that could not be recoverable. In the core of this government decision stands fear of potential criminal activities which cannot be traced. Some analysts are questioning if this could be a political decision in order to support local currency as it dropped significantly in value during the last few years as a result of political instability, due many people exchanged locally currently for crypto in order to sustain value of their holdings.
Fourth week in a row Dow Industrial is moving to the up side, reaching nearly all time highs. In an interview, BlackRock CEO Larry Fink noted that he is quite optimistic that the stock market can go even higher from these levels due to recovery optimism after a pandemic and strong fiscal stimulus. He also noted that at this moment he is not concerned about growing government deficit, but it might be an issue in case that the U.S. does not sustain continuous growth above 3% within the next 10 years.
Crypto market cap
During the week before total crypto market capitalization hit a milestone of $2 trillion, while during next week strong capital flow to this market continued, as it hit $2.2 trillion. However, on late Saturday, strong outflow within a day returned the market cap to previous levels. As of the weekend there has been modest outflow of $50B or 2.5%. Major contributor to this outflow is Bitcoin. Daily trading volumes were increased during the whole week, to levels from $300B up to $600B on a daily basis.
Total cash inflow from the beginning of this year is $1,15 trillion which is an increase of 145% in relative terms.
It was the third green week in a row for the crypto market but with red weekend. Strong funds inflow continued, but this week Bitcoin was not in the spotlight of investors, although it has reached new highest value during a week. Highest performer in absolute values was Dogecoin with additional $26B in market cap, which is an increase of 343% on a weekly basis. Ripple also managed to gain some $9B in market cap within a week, or 17%. Highest outflow experienced Bitcoin who lost some $74B as of the week end, or 6.7%.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
BTC in short term reversal
Since the beginning of March, Bitcoin was trying to break strong resistance level at $60K. During previous week BTC managed to finally break this level and moved to new resistance and also new ATH at level of $65K. As of late Saturday, BTC entered into short term reversal, moving back to short term support at $50K. At the moment, BTC is moving below level of $55K. RSI is around 40, quite close to the oversold zone. Move to test support at $50K once again would indicate that clear oversold zone is reached where BTC could revert back to test again next resistance at $55K up to $60K. On the opposite side, next support lines stand at $45K down to $40K. What is interesting with the latest move is that the uptrend channel is broken on the down side, so within the next few days we will search for confirmation that BTC is looking to trade at levels below $60K.
Ethereum tested support at $2K
For the second week in a row ETH is reaching new highest grounds. Two weeks ago ETH set ATH at $2.195, while during the previous week the coin managed to reach a new historically highest price at $2.550. However, the weekend brought change and ETH entered into short term reversal, after reaching the clear overbought zone at ATH. ETH headed toward a significant support level at $2K, and is currently traded around level of $2.100. Based on current charts, there is a probability that ETH will test current resistance level at previous ATH at $2.100. If this level is not broken, then next support can be found at $2K, $1.950 down to $1.850 where currently 0.618 FIBO stands. However, if the coin reverts to the up side then ATH will be tested once again.
Is Ripple chasing ATH?
It was the second amazing week in a row for XRP with price moving from $1.30 up to $2.0. These last moves are imposing a question if Ripple is setting a clear road to reach ATH level at $3.3 in a near future? Current chart is suggesting that XRP is in short term reversal after a strong move. For the last two weeks RSI is moving above levels of 70 which is a clear indication of an overbought market. XRP is currently trading above level of $1.25. Long term support line stands at$1.20 which coin is currently testing. Next support level is at $0.9. In case that $1.2 is not broken on the down side, then XRP might revert to the up side in order to test once again the level of $2.0 in case that resistance at $1.4 is broken on the up side.
What’s in store for altcoins
Bitcoin Gold was testing long term resistance level at $120 during the previous week, moving in a clearly overbought market. Without strength to break it, the coin reverted modestly back to support levels at $100, testing shortly long term support at $85. RSI moved below 70, which indicates that some short term reversal is ongoing. In case that resistance level at $100 is broken on the up side, level of $120 might be tested. In contrast, the next support level stands at $85 which is a long term support line and which BTG might test once again.
In a short move Theta managed to reach new highs at a level of $16.5 during the previous week. Without strength to move further, the coin reverted shortly to levels above $9 during Saturday trading. From this level short term resistance stands at $11, so if broken on the up side, the coin might take a road to test ATH at $16.5 once again. On the opposite side, support levels stand at $8, down to $6.
Cardano (ADA) made a break above resistance level at $1.4, reaching new ATH level at $1.55 during the previous week. Coin is currently in short term reversal, where support level at $1 has been shortly tested. Coin is currently trading around resistance level at $1.2. In case that this resistance is broken, then the coin will head toward ATH at $1.55 once again. If not, then ADA will revert down to test support at $1.
Second week in a row Litecoin was strongly pushing to the higher grounds. Long term resistance level at $300 has been broken and coin headed to the level of $330. During the weekend, LTC entered into short term reversal reaching support level at $250. In case that $250 is not broken on the down side, the coin will revert to test next resistance at $300. In the opposite case, the level of $250 might be tested again, and if broken, next support stands at $230.
LINK had made a clear break of $35 resistance during the previous week, heading toward new ATH at $44. Previous ATH had been reached in February this year. With this move, RSI went to the overbought zone, indicating trend reversal. Coin is currently moving around level of $35, where it is clearly testing this support line on the down side. In case that it is broken, the next level of watch is $30 down to $20. A move on the opposite side would indicate a move to $40 eventually ATH at $44.
DOGE had an incredible move during last week, starting a week around levels of $0.07 and finishing it around $0.44. It is currently trading around levels of $0.30. Since there is not much fundamental data about such a strong move, some market participants accepted that it was due to another Elon Musk tweet about this coin. Applying technical analysis in this case could provide some misleading signals, so we will just watch developments around DOGE during next week.
Very good week for NEO as coin managed to break resistance level at $70 and move up to test long term resistance at $80. After breaking this level, the coin moved to test next long term resistance at $110. It is currently trading around a level of $80, after short term reversal to the down side and clear overbought market. Current charts suggest that NEO is testing support level at $80. If not broken, the coin will revert to resistance at $90 up to $110. However, break on down side would indicate testing of next support at $70 down to $65.
Monero (XMR) made a clear break of long term resistance at $300 and moved to next also long term resistance at $370, but week ended in reversal testing support at $300. Clear break of this level on the down side, would lead coin to next support line at $270. However, move to the up side would lead to resistance at $330 and $370 to be tested again.
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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