Last week in the news
Modestly flat week on the crypto market as the majority of coins were moving within short range. The US Senate passed the Relief Bill worth $1.9 trillion, late Saturday, which should be finally approved on Tuesday. This program includes one-off payment to all US citizens of $1.400, which could be paid as of the end of this month. Many investors have previously expressed their concerns that these measures might overheat the economy and push inflation up. On the other side, Secretary Yellen and Fed Chair Powell noted that stimulus measures would not be reflected too much in inflation due to high unemployment rates. They still expect that inflation for this year would be in a range of targeted 2%.
At a hearing before the Senate Banking Committee, Gary Gensler, the new SEC Chair, provided some indications that new regulation on crypto currencies might be soon imposed in the US. The aim of this new rulebook would be to promote blockchain technology while providing safety for investors. Certainly, this new rulebook should provide more clarity, especially when it comes to question whether crypto currencies should be treated as securities or not. As of the end of last year, the U.S. SEC charged Ripple Labs for violation of securities law with issuance of XRP, exempting any other coin on the market issued in the same manner. Markets are closely watching developments around Ripple, as resolution might have a significant impact on the crypto market in the US, in a first place for BTC and ETH.
Following high popularity of digital coins like BTC, central banks around the world are continuing their experimental phases for introduction of national digital currencies. While the vast majority of them are still in the research phase, as per a report provided by Bank for International Settlements, China was the first country to start testing use of electronic Yuan, or eCNY in its large cities like Shenzhen, Shanghai and Beijing. Monetary authorities see benefits of digital national currencies in faster and more efficient money transfers and payments, but on the other side, they hope that it would be a more efficient way to cope with shadow economies. Electronic Yuan is not based on blockchain technology, and there is also no official information from Peoples Bank of China when eCNY would be officially introduced for public use. Recently the US Treasury Secretary, Janet Yellen, supported issuance of the US digital currency, which should occur during the next few years. At the same time, she noted in several interviews threats that exist around Bitcoin as a means of payment.
Goldman Sachs is back in crypto business. As reported by CNBC, this investment bank will start trading bitcoin futures and forwards, but is also interested in bitcoin ETF`s as well as digital asset custody.
Crypto market cap
Total crypto market capitalization remained flat during the previous week, with quite modest increase of some 4% w/w. This increase was mostly driven by Bitcoin and Ethereum, while Cardano (ADA) was one of rare coins with a higher level of outflow of some $7B. Volume of daily traders was decreased to levels around $250B on a daily basis. Total cash inflow from the beginning of this year is $706B which is an increase of 89% in relative terms.
After a short term reversal during the week before, the majority of crypto currencies stabilized around current levels during the previous week. Highest gainers in market capitalization were Theta with 28% increase, followed with LINK with 8% compared to previous week. Ethereum gained 5%, while Bitcoin remained almost flat with a small increase of 0.3%. Cardano erased gain from a week before with a decrease in market cap of 20%. This coin also fell to 4th place among all other coins. On the down side were also Stellar, with a decrease of 12%, Monero with 8% and Ethereum Classic with more than 3% decrease.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
BTC still testing $50K
During the previous week, BTC continued to test resistance at $50K. Short term reversal to the up side started when coin was not able to break short term support at $45. RSI continued to move around level of 50, without clear indication that some reversals might be expected. Important level to watch during this week would be $50K, which BTC still continues to test. In case that this level is broken on the up side, next resistance is at $55K up to $58K. Break of $58 would lead to new ATH. In case that current resistance is not broken, BTC would revert to the down side to test once again short term support at $45, down to $40 and 0.618 Fibonacci retracements.
ETH back to $2K?
ETH tested a significant support level at $1.400 during the week before, but without strength to break it returned to levels above $1.600. Reversal was also indicated with RSI which was down to 40 before it returned at current levels of 50. At this moment, ETH is testing short term resistance at $1.650. In case that this level is broken on the up side, next resistance stands at $1.850 and above at $2.000 which is also ATH for this coin and significant psychological level. In case that market remains flat during next week, there is potential for ETH to test once again at $1.400, or 0.618 FIBO. Next significant support stands at $1.250.
XRP volatility slowed
Current chart for XRP looks like this coin fully lost strength to move at any side. During the whole previous week, the coin was moving between levels of $0.4 and $0.5. RSI at levels of 50 does not provide a clear clue if there might be some move to the opposite side. In case that there is no potential to go above current resistance at $0.5, XRP might revert to the down side in order to test support at $0.37 or next level at $0.30. In the opposite case, next resistance above $0.5 can be found at level of $0.58.
What’s in store for altcoins
After a strong push in price during the second half of February, the first week in March was time for modest slowdown for Cardano (ADA). There was some 20% funds outflow from ADA or nearly $7B, and coin fell one place in a list of currencies with highest market capitalization, currently standing at 4th place. After reaching ATH at $1.47 a week before, ADA is currently trading around levels of $1.11. RSI dropped to 60 after reaching almost 80 a week before, so it might indicate that the current trend is still not over. In this case, the coin might test short term support at $0.97. On the opposite side, next resistance levels stand at $1.14, up to $1.20.
While all other coins were in the flat mood during the previous week, it was an exciting week for Theta. Recently Theta reached ATH at $4, but the previous week it managed to reach another price milestone at level of $4.95, which is marked as a new ATH for Theta. At the same time, RSI reached the overbought side, so the coin reverted a bit down to levels of $4 which is current support level and previous ATH. Short term support levels stand at $3.3, $2.5 and $1.7. Move on the up side would indicate another testing of new ATH at $4.9.
Litecoin was down to levels of $150 during the previous week, where short term support stands. However, the coin was not holding to these levels for a longer period of time, but has swiftly reverted to next resistance at $180, where it is currently trading. If LTC manages to break this level, next to be tested is $210, which might lead to a historically important level at $230. In the opposite case, the level of $150 might be tested once again, all the way down to next support at $130.
LINK gained some 8% in market capitalization during the previous week, by reaching a price of $30. Coin is currently testing short term support at $25. Clear break on the up side, would bring LINK to the next resistance line at $30. On the opposite side, the level to watch is $18 as short term support.
DOGE was extremely flat during the previous week, moving in a short range between $0.046 and $0.05, which is short term resistance for this coin. If the level of $0.05 is broken during this week, then it might push the coin to next resistance at $0.06 up to $0.07. If not, then next short term support at $0.03 might be tested.
During the previous week NEO was testing short term resistance at $40. It is still trading modestly below this level. If coins manage to break this level, long term resistance will be tested at $45 up to next level at $55. On the opposite side, support levels stand at $30 down to $20.
Monero (XMR) reached a level of resistance at $230 during the previous week, but the coin did not go above this level. It revered modestly down to $200 which is long term support for this coin. If the support level of $200 is broken, next levels to watch are $170 and $150. On the opposite side, resistance levels stand at $230, $250 up to $270.
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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