Last week in the news
It was a green week on financial markets. Equities, oil and gold were up, US dollar gained in strength against all majors, and Bitcoin reached new ATH at $60K. Analysts are noting that the latest increase in BTC price is coming from fears of inflation in the US, after the highest stimulus of $1.9 trillion has been adopted. The only selloff which occurred during the previous week was in US Tbonds.
Regardless of BTC price, there are reports that MicroStrategy Inc. is continuing with its strategy to increase coin investments even at ATH prices. Their holdings of BTC are currently estimated to be 91.326 coins with an average purchase price of $22.214 per coin. At the same time another company joined the BTC cash holding club, after Tesla and Square. As reported by CNBC, Chinese Meitu, an app making company, diversified its cash holdings through purchase of $22 million worth Ethereum and $17 million worth of Bitcoin. In addition, this company noted that it could start developments of its own ethereum based applications, but certainly they will look at investments into businesses based on blockchain.
China decided to become a more environmentally friendly country and decrease its emissions of carbon dioxide by 2030. Although this is quite a positive move, it will have some implications on targeted decrease of electricity consumption, and through this, on crypto miners. One of such announcements came from the Inner Mongolia region in China, which stated their plans to halt new mining activities, while existing ones will probably be closed. It is up to how this decision will affect the level of total mining, considering that Inner Mongolia participates with 8% in global crypto mining. One of options is for companies to move equipment to some other countries, before they are finally closed in China.
A selloff of US benchmark 10Y bonds, due inflation fears among investors, pushed yields to the level of 1,6%. These developments are putting spotlight on investors on the next FOMC meeting which would be held on March 16-17 and view of country leading economists regarding current economic developments and future prospects. On the other side, ECB held its meeting during last week, without announcement of any new measures. There has been noted that the ECB will continue with its bonds buying programs amid fears of potential increasing yields and through this, increased costs of borrowing funds. Increasing borrowing funds are certainly not welcomed since the EU economy was down by 6% during the previous year due to measures taken to fight the new virus.
Crypto market cap
Previous week was another green week for the crypto market, as there were not so many coins which ended the week in red. Such strong demand for crypto currencies has pushed total market capitalization to new highs, reaching $1.778 trillion. Previous peak occurred as of the end of February, at a level of $1.72 trillion. Last week`s increase was driven by Bitcoin, while there was also a strong contribution from the majority of altcoins. Volume of daily trades was moving in a range from $220B up to $280B on a daily basis. Total cash inflow from the beginning of this year is $985B which is an increase of 124% in relative terms.
Highest gainer in market capitalization during the previous week was Bitcoin which added $217 billion to its market cap. This represents an increase of 25% on a weekly basis. BTC was followed by Ethereum, who added $32 billion in a week, and an increase of 19%. Very good performance also had Theta, with a total market cap increase of almost 60%, followed by Bitcoin Gold with 30%, Litecoin with 23% and Bitcoin Cash with 15%. Ripple remained flat during the previous week.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
BTC setting road to $65K
After testing ATH and resistance level at $58K, Bitcoin managed to break this level during previous week, reaching new ATH at level of $60K. Technical analysis shows that since the beginning of this year Bitcoin entered into up-trend channel, with peaks at $42K and $58K. If this channel sustains during future period, next peak might be found at level of $65K and bottom at $48K. However, as RSI is currently at level of 70, it might take some more time for BTC to reach these new levels. For this week, it has already hit another significant milestone by reaching new ATH at $60K.
Level of $60K is certainly one to watch during next week. Clear break of this level on the up side, would indicate new ATH and next significant level of $65K. However, there is possibility for short term reversal, considering indication of modestly overbought market. On the down side, significant levels stand at $58K, down to $55K and $50K.
ETH back to $2K?
Ethereum continued to test resistance at $1.850 during the previous week, finally managing to break it as of the end of the week. ETH is currently trading around a level of $1.900, which is a clear path to test the next significant level and ATH for this coin at $2.000. RSI is currently around level of 60, which is an indication that the current trend is still not over, which supports ETH potential to reach next resistance. In case of short term reversal, important support levels stand at $1.850, down to $1.600 and $1.400, which is a level of 0.618 FIBO.
XRP volatility continues to slow down
For the last two weeks, Ripple has been struggling to gain at least some volatility, let alone a moving trend. Currency was moving between levels of $0.45 and $0.50. Week ended below support level of $0.45, but soon modestly reverted to the up side. RSI is still around level of 50, not providing any clear indication about potential future trend. Clear break from $0.45 level would indicate move to next resistance at $0.5. On the opposite side, next support levels are at $0.37, down to $0.30.
What’s in store for altcoins
Another milestone has been reached for Theta during the previous week. Currency reached another ATH at level of $8. This is the second week in a row that this coin is breaking historical highs. Previous has been reached two weeks ago at a level of $4.95. During the first three days of the previous week, coin was moving in a strong up trend, until the market was exhausted at level of $8, and where RSI reached level of 86. During week end coin reverted a bit on a down side, currently testing short term support at $6. Next significant support level for this coin stands at $4.8, down to $4 and $3.3. If resistance at $6 is broken, it could be expected that reversal from down side would lead coin to test again resistance and ATH at $8.
For the second week in a row Cardano (ADA) is moving in a slow motion between levels of $1.2 down to $0.98. RSI is moving around levels of 50, providing no clear clue about investors interest. However, we have seen from the past few weeks that everything is possible with this coin, and that it still has some potential for surprises. What is in prospectus for this coin in near future we are about to see during next week. If coin manage to break current support level at $0.98, next levels to watch on down side are $0.9 and $0.7. On the opposite side, resistance levels stand at $1.14, up to $1.20 and $1.34.
Litecoin managed to gain some strength during the previous week, moving above resistance at $210 in order to test next resistance at $230, where the coin is currently traded. RSI is currently at 65, which is an indication that the current move is still not over. If there is going to be enough investors interest to move the coin above current resistance, it is about to be seen. Certainly, it would be a significant milestone for LTC as it would open a door for testing the next long term support level at $260. LTC has still a long way to go in order to reach its ATH from December 2017, when coin worth was $404, but based on current developments, there is potential for this to happen during this year. In case that LTC reverts a bit during next week, support levels to watch are $180, $150 down to $130.
Previous week LINK was moving quite modestly between levels of $25 up to $32. Coin was clearly testing resistance at $30 but without strength to break it, it reverted to next support level at $25. With RSI currently around 50 there might be possibility for this coin to test once again $25 support. Next resistance above $30 stands at $35, while levels to watch on down side are $25, down to $18.
DOGE was testing resistance at $0.06 during the previous week. This level has not been broken, so coin reverted to short term support at $0.05. Currently is trading at level close to $0.06 with RSI around 50. In case that current level at $0.06 is broken, coin will move to next resistance at $0.07. On the opposite side, levels to watch are $0.05 down to $0.03.
For the last four days NEO is trying to break resistance at $40, but still without success. In case that this level is broken, the next level to watch is $55. If there is no strength for such a move, coin will revert to the down side and support level at $30 down to $20.
Monero (XMR) was testing resistance at $230 for the second time during the last two weeks. If this level is going to be breached a weak ahead is about to be seen, but RSI made a move from 50 to 60, indicating that uptrend still has some potential. If current resistance is not broken, then the coin might revert to down side to test next support at $200. Following support levels stand at $170 and $150. On the opposite side, the next level to watch above $230 is $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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