Last week in the news
Positive news on the market coming from both the U.S.Treasury and SEC, with statements that they have no plans to ban crypto currencies in the U.S., have pushed crypto prices higher during the previous week. Bitcoin has passed the level of $50K after two months, reaching $55K, while Ether returned back to challenge $3.5K resistance.
During the previous week both U.S. Treasury Secretary Janet Yellen and SEC Chair Gary Gensler have said that they have no intention to impose any sort of restrictions on trading crypto currencies. Previously, the WSJ reported on the possibility that stablecoins might soon face regulatory requirements like the one that are currently in place for banks in the U.S. This comes in anticipation of the official publication of the stablecoin report which is expected to be published in late October by the Treasury advisory group on digital currencies. Some analysts are noting that markets are waiting for the regulator signals on future crypto market regulation which would be a major breakthrough on security and regulatory acceptance of crypto and stablecoins. Some are expressing the opinion that introduction of regulation might push crypto market prices much higher and impact its wider use in population and businesses. Although this might be one of the scenarios, still, for its wider business use, crypto coins need to gain a higher level of stability in line with the regulatory frame.
The U.S.Senate has adopted legislation on a temporary increase of the debt limit of $28.4 trillion for additional $480 billion, or up to a limit of $28,9 trillion. This legislation was brought up in order to avoid risk of potential US default on its obligations. Extended limit will be valid until December 3rd.
CEO of Soros Fund Management, Dawn Fitzpatrick, confirmed to Bloomberg that the family office owns some coins “but not a lot”. Fitzpatrick also expressed her view on Bitcoin that it is not only an asset which is perceived as a hedging tool but also that this coin became mainstream.
In a research note to clients, JPMorgan` global strategist Nikolaos Panigirtzoglou wrote that investors are turning from gold to Bitcoin as a hedging asset. As evidence, he is noting that the price of gold fell 6.5% during this year, while the price of Bitcoin has increased by 85% in the same period.
Crypto market cap
Highly positive news from the U.S. Treasury and SEC officials, which noted that there is no intention for crypto trading to be banned in the U.S., pushed the crypto market to higher grounds during the previous week. Market surge was driven by Bitcoin, who managed to reach $1 trillion in market capitalization, first time after May this year. Total market cap reached $2.35 trillion which was an increase by more than 9% on a weekly basis, or by additional $200B. Regardless of the spikes in prices, daily trading volumes remained relatively the same as week before, moving between $170B and $200B. Total inflow from the beginning of this year stands at $1.55 trillion, which is an increase of 195%.
Second week in a row crypto market is gaining in market cap. Previous week was led by Bitcoin whose capitalization surged for almost 15%, reaching a level above $1 trillion. Ether gained, but at lower level, surging by additional $30B in market cap, or 8% on a weekly basis. It was a positive week also for Ripple, with gain of additional $5B or 11% in market cap. Surprisingly, Binance Coin slowed down, and was one of the rare coins which lost some 1% of its value within a week. On the other side, OMG Network entered into correction, with a loss of almost 6%, after a significant spike in price two weeks ago of 70%. Tether is continuing to increase the number of coins in circulation, reaching 68,4 billion, or 0.6% on a weekly basis. During the previous week Litecoin increased its circulating supply by 2.9%.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Crypto futures market
Crypto futures are continuing to trade higher in line with positive influx from the spot market. Short term BTC futures surged by almost 13% on a weekly basis, but the price still holds around $55K. However, futures with maturities in March next year were traded up by 16.5%, while December was higher by 24%, revealing positive market expectations on the future price of BTC.
ETH futures were also traded higher but with relatively lower increase in price. November maturities were higher by 7%, still holding slightly above $3.5K. Longer maturities were up by some 12%, reaching the highest price of $3.7K in March next year.
Table below provides the most recent information on BTC and ETH future prices.
Bitcoin: is a short term reversal coming?
Positive news that crypto trading is not going to be restricted in the U.S. was welcomed by the crypto market also as a sort of relief after PBOC decided to implement a full ban on any kind of crypto business or holdings by its citizens. Bitcoin was one of the cryptos who gained the most from this news, increasing its price by almost 15% in a single week. BTC finally moved above the resistance line at $50K and headed toward the next resistance at $55K. Last time when BTC was at these levels was in May this year. Highest level reached during the week was $56K, but only on a short occasion.
Golden cross from mid-September started to reveal itself with MA50 starting its higher divergence from MA200 oscillator. With the latest push in the price, RSI has reached a clear overbought zone and modestly reverted back to levels slightly below 70. BTC has tested the resistance line at $55K, but in this turn did not have strength to move above it. As of the end of a week trading volumes have decreased. This is raising the question if BTC is preparing to enter into short term reversal in the following period?
Current level in the focus of the market is the $55K resistance line. Considering that RSI reached the overbought side and at the same time trading volumes have slightly decreased, it increases the probability for BTC to enter into a short term reversal in the coming days. Potential levels to watch on downside are support line at $50K, with decreased probability of reaching $48K. In case that market still is not finished with the demand side, then price might be pushed to the level of $60K, but technical indicators are showing decreased probability for such a move at this moment.
Ether: $3.5K continues to be a hard task
It was a positive week for Ether, but compared to BTC, price increase has been slightly weaker. During the week Ether moved its price by 8%, from $3.3K up to $3.6K. Highest level reached was $3.680. At the moment the coin is testing the resistance line at $3.500 on the upside. RSI has been moved to the level of 60, but has not reached clear overbought level, which leaves some space for price to go higher from current levels. Oscillators are continuing their divergence from each other, but slowing down their paths.
Resistance line at $3.500 is continuing to be a major level to watch in the coming period. This line is currently tested, but decreased trading volumes during the last two days might indicate that there is still no market strength for ETH to finally and clearly break this level. Although RSI is showing that there is room for price to go higher from current levels, still other indicators are not clearly in alignment with it. Indicators are sort of mixed at this moment. In this sense, short term reversal might be ahead for ETH, at least to the level of current MA50 at $3.3K. If this line is broken, then ETH will continue its road toward the long term support line at $3K, but still with decreased probability. In case that market pushes price further, then the next level to watch would be $3.8K up to $4K.
Ripple:$1.2 resistance determines next move
Although positive market news did not have significant influence on XRP during the previous week, Saturday brought a significant breakthrough and that awaited price shift from $1.0 all the way up to $1.20. Coin is currently trading around $1.16 level. RSI moved from 50 to 60, but it is still not in the overbought territory. During the previous week oscillators have modestly reverted their path toward each other, but safe distance between them still holds.
Considering that RSI has still not reached a clear oversold side, leaves the way for XRP to move higher from current levels. On the other hand, with Saturday's surge, XRP moved above MA50 line which was its major resistance during the previous week. Resistance line at $1.20 is currently the one to watch closely. There is a higher probability that XRP will continue to test it in the coming days. In case that it is clearly broken, the next target of XRP will be resistance at $1.3, with decreased probability of $1.4. However, if the coin enters into a short term reversal, then the next stop will be the $1.0 support line which collides with current MA50 level.
Binance Coin: is $380 next stop ?
Regardless of the general crypto market push to the upside, it seems like the price of BNB was not exactly correlated to general market sentiment. However, the coin did have excellent performance two weeks ago when the price was increased by 23%, better than the majority of other coins. It looks more like that BNB had started its reversal during the previous week. Highest price reached during the week was $480 but only on a short occasion. At this moment, BNB is traded around $418 level.
RSI reverted back from 60 down to 50, while oscillators are continuing to move in parallel. Resistance line at $430 has been clearly tested during the previous week, but there was no market strength to break it on the upside. Instead, the coin entered into a short term reversal. There is a high probability that next stop of current BNB`s move will be the support line at $380, which would also be the end of current reversal. Next support line is at $350 with currently lower probability to be reached within the next couple of days. On the opposite side, $430 resistance might be tested one more time.
Cardano (ADA): end of a triangle is coming ?
For the last two weeks ADA is slowing down, while continuing to move in a triangle formation. During the previous week the price range was between levels of $2.15 up to $2.37. At this moment the coin is traded around $2.27. Trading volumes have decreased, compared to the previous period. RSI moves around 50 for the last two weeks, while oscillators are slowing their convergence from each other. For a second week there is a question if the break of a triangle is to happen soon?
Considering decreased trading volumes, which implies decreased investors interest for this coin, it is not to be expected from ADA to make some significant moves in the coming period, except in case that fundamentals push it. Technical analysis is showing that ADA is testing a short term resistance line at $2.30. In case that it is broken, which would imply break of a triangle on the upside, next stop might be at MA50 level, which is currently at $2.45. In case of reversal to the down side, the support line stands at $2.0.
LINK: can MA200 hold the upside pressure?
During the previous week LINK slowed down, moving between levels of $25.4 and $28. Resistance line at $30 has not been tested during the week, however, LINK found its major resistance at the MA200 line. Oscillators are continuing to move very close to each other, but still as two parallel lines, while RSI continues to be at 50 area.
Considering that the major resistance line stands at MA200, it increases probability for a short term reversal down to the major support line at $25 to test it on the downside one more time. However, if LINK finds strength to break the MA200 resistance line, there is a high probability that the coin will head toward the next major resistance at $30 in order to test it.
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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