Last week in the news

For the last few weeks the majority of crypto currencies was moving in an overbought zone, so some reversal was expected. It happened during the previous week, where the crypto market lost some strength to push prices further on the up side.  However, Cardano managed to beat all time highest levels by reaching $1.4 on Friday and jumped to third place in market capitalization, taking Tether`s place, below Bitcoin and Ethereum. Certainly some significant positive influx came from Gene Simmons, and his public and financial support to this coin two weeks ago. However, as Business Wire reported, investment fund FD7, based in Dubai announced plans to sell $750 million worth investments in the Bitcoin in order to increase positions in Cardano (ADA) and Polkadot (DOT) due to diversification purposes.

News of the week is coming from US Treasury Secretary, Janet Yellen. She announced in an interview at a DealBook conference that FED is currently considering issuance of digital currency to be introduced in the US payment system within the next few years. At the same interview, she once again expressed her concerns about the “inefficiency” of Bitcoin as currency for transactions due to its extreme volatility and too high energy consumption for its operations.

MicroStrategy Inc. announced that the company used a recent draw back in price of Bitcoin in order to increase their holdings of BTC for additional 19,452 coins, purchased for an amount a bit over $1 billion. This company is one of largest holders of BTC, whose holdings of digital tokens are now estimated to 90,531. This purchase has been funded with issuance of new convertible debt securities.

In an interview for Bloomberg, Cathie Wood, CEO of Ark Investment Management expressed her view on the Bitcoin market, noting that BTC is still in its early stage and that there is potential of trillions of dollars in the market cap. She sees Bitcoin also as reserve currency in the crypto world.

The 10Y US Treasury yields are continuing to rise, reaching levels above 1.6% on Thursday. However, some investors are not much concerned about it, considering that they are taking into account expected strong US economic recovery in the future. That brings worries about future increasing inflation and real rates of return which would be lower. In addition, increase in inflation might trigger increasing expectations on FEDs increasing its benchmark rates.  On the other side, Janet Yellen and Fed Chair Jerome Powell noted their view that new stimulus packages of the US administration in the amount of $1.9 trillion will not be reflected too much in inflation due to high unemployment rates in the US. In this sense, the FED would probably keep their current policy for some time and keep targeted inflation at 2%.

Crypto market cap

After reaching historical high at levels of $1.722B, crypto market total capitalization slowed down a bit during last week down to levels of $1.430B. This decrease is the result of cash outflow mostly from major crypto currencies, Bitcoin and Ethereum, who lost $180B and $51B. This decrease pushed outflow also from other altcoins.  Total cash inflow from the beginning of this year is $637B which is an increase of 80% in relative terms. Trading volumes had been significantly increased during last week, reaching $850B on Friday

There has been a short term trend reversal during the previous week for the majority of coins. This move was to some extent expected as the majority of currencies were moving for a longer period of time within the overbought zone. After reaching the historical milestone of market capitalization above $1.000B, Bitcoin fell last week to levels above $800B, which is a loss of 17% in market cap. Bitcoin Gold was down by 21%, Ethereum down by 24% and Ethereum Classic by 30%. The only coin which managed to increase market cap during the previous week was Cardano with an increase of 26% on a weekly basis.    

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

BTC short term reversal  

After reaching ATH at $58K, BTC didn’t have enough strength for a move to the level of $60K during the previous week. After moving for three weeks in an overbought zone, BTC entered into short term reversal down to levels of $45K. Support level at $50K has been broken, so currency tested next short term support at $45. RSI is currently moving around level of 50, which does not provide a clear view if reversal is over or there is still space for BTC to reach the next support level. In this sense, if BTC continues to go down side during next week, support level is found at $40K where 0.618 Fibonacci retracements stands and which is also a significant support level for BTC. On the other side, there is some probability that BTC will test once again current resistance at $50K. If this line is breached, next resistance is at $55K up to $58K, which is also ATH for BTC.

ETH  testing support at $1.450

As a reflection of BTC, ETH also entered into short term reversal during the previous week. After reaching ATH and psychological level at $2K, ETH slowed down a bit and moved down to support level of $1.850, and soon after headed toward long term support at $1.400 where 0.681 FIBO stands. Currency ended last week around levels of $1.500.

At a level of $1.4K, RSI has reached 40, which is close to the clear oversold side, after which currency rebounded modestly up to $1.500. Whether clear oversold levels have been reached, it is about to be seen during next week. Levels to watch on the down side are $1.400, as significant support level. If this level is broken, then next significant support stands at $1.250 which is also level of 0.5 FIBO. On the up side, short term resistance is at $1.650 up to $1.850.  

XRP volatility continues

XRP`s volatility continues. During the previous week XRP was traded below resistance level at $0.5. On Wednesday level of $0.37 has been shortly reached, but currency swiftly reverted back to levels around $0.45. RSI is moving around level of 40 which might suggest that currency could revert to the other side soon. XRP is testing resistance at $0.45 for the last three days. In case that this level is broken, then next short term resistance is to be found at $0.5 up to $0.58. In case that there is not enough market strength to break current resistance, XRP will revert to the opposite side, to the support levels at $0.7 down to $0.30.

What’s in store for altcoins

One of the rare currencies that managed to have a strong push in price during the previous week is Cardano (ADA). As of Saturday, new ATH has been reached at levels of $1.47. Just as a reminder, two weeks ago, ADA reached a historical level at $1.20, supported by a tweet from Gene Simmons, who announced that he has invested $300K into this currency. Currency then reached 6th place in market cap among all other coins. Last week it jumped to 3rd place, just below Bitcoin and Ethereum. ADA is currently trading at level of $1.34. As per business news, this move was probably the result of Dubai based investment fund FD7, who made improvements in diversification of crypto portfolio by decreasing holdings of BTC and increasing investments in ADA and DOT. Due to such developments, it could not be concluded with high certainty if ADA still has reached its highest level, or maybe some short term push is ahead. In case that currency enters into reversal, short term support levels are at $1.14 down to $0.97.

For some time LTC was testing long term resistance level at $230. Without strength to break it, currency reverted to down side, breaking short term support at $210 and ended this week testing support at $170. In case that this level is broken during the following week, next support to watch is $130 and $125. On the opposite side, resistance stands at $210 up to historically important level at $230.

LINK has managed to finally break the channel in which this coin was moving since the beginning of this year. Break was on down side, testing support levels at $30, down to $25. LINK is currently trading at $27. A clear move on the up side from this level would push currency to the next resistance at $30 up to $35. On the opposite side, levels to watch are $25 and $18 as next short term support levels.

For the last two weeks DOGE is continuing to test short term support at $0.05. Coin still didn’t manage to go below this level, which might indicate that some reversal could occur to the up side, at least to next short term resistance of $0.06 up to $0.07. Historically the highest level stands at $0.08. However, if current level is broken, then next short term support stands at $0.03.

NEO entered into reversal during the whole last week, moving from $55 down to $30. It has reverted a bit to the level of $38 where it is currently trading. NEO is currently testing short term resistance at $40. A move above this level would take coin to next long term resistance at $45 up to $55. On the opposite side, support levels stand at $30 down to $20.

After not being able to break resistance at $270 Monero (XMR) reverted to test support level at $200 during the previous week. It is currently trading around levels of $210. Next resistance levels for Monero stands at $250, up to $270. A move above $270 would lead to historical resistance at $320. On the opposite side, if the resistance level of $200 is broken, next levels to watch are $170 and $150.

After reaching ATH at level of $4, Theta reverted a bit during the previous week, down to levels of $2.5. This level was quite a short term level for Theta as it gained back in strength and continued trading around levels of $3. Short term resistance stands at $3.3, up to $4 as historical high. On the down side, support levels are found at $2.5 and $1.7.

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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