Last week in the news
Second positive week on financial markets. Both equities and the crypto market were traded at higher grounds. Bitcoin is finishing the week modestly below $45K resistance, while Ether managed to break psychological $3K line.
From March 31st all companies operating in the crypto field within the UK must be fully registered with the Financial Conduct Authority. This might be an issue for some companies currently operating in the UK, since they would need to fully comply with the UK regulation on anti-money laundering. At this moment, temporary licenses are issued to Revolut and Copper, waiting for their full license after the deadline as of the end of March. As per initial information, about 80% of 33 currently operating companies have withdrawn their applications due to very tight rules FCA imposed.
As announced by the company, Goldman Sachs is the first US bank which started trading crypto assets over the counter. The bank is trading a non-deliverable option, a BTC-linked instrument with crypto bank Galaxy Digital. This comes as a part of Goldman`s strategy to offer institutional investors an opportunity to dive into the crypto market, serving as a principle for such transactions.
Israel`s Bank Leumi announced a start of BTC and ETH trading which will be available to its customers through their Pepper Invest platform. This offer will be supported through Paxos, a New York based trading platform. Starting trading date is still not announced, considering that this new product is subject to Israeli regulatory approval.
A new tax law in India, which will become effective in early April, will impose a capital gain tax of 30% for crypto assets. It will not allow for losses to be deducted from profits. The law is also proposing a 1% tax deduction at source for all transactions while gifts in crypto would also be taxed. Crypto community in India is overwhelmed with negative comments, while the government is perceiving this law as a sort of trade-off between the question whether to ban crypto in India, or to regulate and tax this market.
Metaverse is continuing to gain more users. Last week there was a fashion show where over 70 companies involved in the fashion industry took place. All these companies were involved in brand protection strategy before they showed up their NFT`s in the first Metaverse Fashion Show.
Crypto market cap
Positive trend started two weeks ago and continued on a crypto market also during the previous week. Total crypto market capitalization returned to the level from mid-February this year, reaching $1.97 trillion. Although this level is still far away from historical peaks, it still provides some confidence that the next target at $2 trillion might be easily reached in the coming days. Positive market sentiment is back on the market, as surging inflation figures are pushing investors toward riskier assets in quest for higher returns. Daily trading volumes were slightly increased, ranging from $120B up to $180B on a daily basis. Total outflow of the funds since the beginning of this year has decreased to the level of 10% or $211B.
Positive period for the crypto market continues. Almost all coins finished the week green, which was long awaited by some investors. Major coins were leading an increase in market cap in nominal amounts. Bitcoin increased market cap by 5%, adding $44B to total cap, while Ether also performed well with additional $18B on a weekly basis or 5%. Weekly surprises came from coins which were sort of pushed aside by the market from the beginning of this year. This group was led by Cardano, with a strong push of $8B in market cap or 27% increase on a weekly basis. ADA was followed by Solana, which managed to increase its market cap by 11% or $3.5B. Solana also increased the number of coins in circulation by 1.5% w/w which supported to some extent its surge in market cap. Filecoin was another coin with increase in circulating coins by 1.5%
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Crypto futures market
Second week in a row crypto futures were traded higher, both BTC and ETH. Shorter maturities for both coins finished the week around 8% higher from a week before. Significant development is with ETH futures, considering that maturities in December this year and next year finally managed to reach levels above $3K. BTC futures were also pushed to the higher grounds with December this year traded above $45K, while December 2023 is struggling to break the $50K level.
Table below provides the most recent information on BTC and ETH future prices.
Bitcoin: on a breaking point
Second week in a row BTC`s price was pushed strongly to the upside, which is a move awaited by the market for some time now. Bitcoin is back to $45K levels, finally managed to leave $40K support behind. Although this was excellent news, still such a move is raising a risk that BTC is on a breaking point at this moment. This means that it will be decided in the coming week whether BTC will have strength to move further to $50K, or it will return back to previous levels.
On a positive side are movements of moving average lines of 50 and 200 days, where they have started strongly to converge toward each other. This might imply potential for change of a BTC`s short term trend to the upside, however, there is still space until such a move is confirmed on the charts. Another positive move is coming from the RSI indicator, which was pushed to the level of 60 during the previous week, indicating that the market is eyeing the overbought market. Considering that it has not been reached during the previous week, leaves some space for the price to move up until RSI reaches 70 line.
As previously noted, BTC is currently standing on a breaking point. Coin will continue to test the $45K resistance line in the coming days. In case that this line is not broken, BTC will revert to the downside, smoothly toward $43K, until it finally reaches $40K support. Currently, there is a decreased probability that $40K might be broken to the downside.
Ether: resistance at $3.2K next target?
Ether finally had one really good week, since the beginning of this year. During the course of a previous week price was pushed to the higher grounds, enabling ETH to reach the long awaited psychological $3K level. Now the question is if there will be strength to reach and test the $3.2K resistance line?
Moving averages of 50 and 200 days started their moves in a positive direction, modestly converging toward each other. Although cross is still to come in the following period, it provides some glimpse into potential price moves for ETH in the period to come. RSI has been strongly pushed to the level of 64; however, the overbought market has not been reached.
Technical analysis is suggesting that ETH will continue toward the $3.2K resistance line in order to clearly test it in the coming days. Whether there will be strength for a move above this level is to be seen, however, at this moment there is decreased probability for such a move. On the opposite side, there is probability for the psychological line at $3K to be tested again, with low probability for testing the $2.850 support line.
Ripple: time for short break?
In line with general market sentiment, the price of XRP was pushed to the upside from level of $0.79 from the beginning of the week, up to $0.85 resistance line. This move increases the prospectus for a $0.9 long term resistance line, however, it might take some time until this level is clearly tested.
Moving average of 50 days started its convergence toward the MA200 counterpart, which is positive development for XRP. At the same time RSI reached level of 60, still modestly pointing toward potential move to the overbought market in the coming period. However, XRP continues to move in a modest manner, which might take some time for coins until it really reaches this point in charts.
Current charts are pointing that there is some potential for a short break from the road to the upside for XRP. Current resistance line at $0.85 will be tested in the days to come, however, there is currently decreased potential for this line to be clearly broken. It is more probable that XRP will make a short break and revert to the down side to test support line at $0.8, with decreased potential that $0.75 might be tested one more time.
Binance Coin: next resistance is still far away
As it has been expected and clearly pointed in charts, BNB has reached a resistance line at $420 during the previous week. However, there has not been strength to push the coin to the higher ground, so BNB ended the week modestly below this resistance line.
On a positive side was that moving averages of 50 and 200 days stopped their divergence from each other, but there has not been the start of the convergence, rather, they are continuing to move as two parallel lines. This indicates an increased probability that BNB will need more time until prices actually start moving in a market desired direction. RSI was modestly moved to the level of 60, however, with relatively slower volatility, it will also take some time until the market finally reaches the overbought stage.
During February this year the highest level reached was $440. There is some probability that the market will look at these levels in the coming period, while the next resistance line at $520 is still too far for BNB. On the opposite side, there is an increased probability that BNB will revert to the support line at $380 to test it for one more time in the coming days.
Cardano (ADA): how long can $1.0 hold?
Cardano was a huge surprise during the previous week. Coin managed to attract additional $8B in market cap and push the price to the level of $1.15. Charts were pointing to a sort of short reversal, but not exactly to such a strong push. Taking previous trading into perspective, the latest move looks more like a whales-move rather than pure market moves, which should be taken with precaution.
Moving averages of 50 and 200 days have slowed down their divergence and now they are moving as two parallel lines. There is no indication of a potential convergence in the near future. With the latest price move, RSI was pushed to clear the overbought market, which is the initial indication of a potential short term price reversal.
Technical analysis is suggesting a potential short reversal after clear overbought market is reached, in which sense, it might be expected that the support line at $1.0 might be tested in the coming period. There is also some probability for $0.95 to be tested again. On the opposite side, the resistance line at $1.20 seems hardly reachable for ADA.
LINK: short reversal is still in store
Regardless of general market optimism, LINK somehow stayed in the shadow of other coins on the market. LINK started the previous week above $14 and managed to push price only to the level of $16.3. Resistance line at $15 is still tested, like the week before. It seems that the coin does not have strength for a move to the higher grounds.
Moving averages of 50 and 200 days stopped their divergence from each other, however, they continued to move as two parallel lines. There is still no indication that soon they might start converging toward each other. On the other side, RSI is also moving slowly in the zone above 50, which might indicate that there is a longer road toward the overbought market.
Second week in a row LINK is testing the $15 resistance line. Charts are pointing to increased probability of a short term reversal in the short future period. In this sense $13 might be the next target for LINK in the coming days, without indication that price could go lower from this level. On the opposite side, LINK might continue to test $15 resistance, however, with decreased probability that this line might be broken to the upside.
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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