Last week in the news

It was a relatively calm week for the crypto market. Majority of altcoins were traded sideways without a clear trend. As of the week-end Bitcoin and Ether reverted modestly to downside, with BTC trading slightly below $34K, and Ether around $2.2K.

There has been some promising news regarding future mining of Bitcoin. Tesla`s CEO Elon Musk and MicroStrategy CEO Michael Saylor hosted a meeting with Bitcoin miners in North America. The topic of the meeting was a potential for use of renewable energy for mining and, through this, a way to increase sustainability of mining and crypto business in the U.S.  Although some of latest Musk`s tweets were related to concerns regarding environmental issues coming from increased carbon print for Bitcoin mining, when Tesla Inc. suspended accepting BTC for purchase of Tesla cars, this new initiative provides a glimpse of light that crypto currencies could potentially be broadly accepted as payment mean for goods and services in line with fiat currencies. During the previous week, the price of BTC was also supported by U.S. hedge fund billionaire, Ray Dalio, who noted that he also owns some Bitcoin.

During the previous week Iranian government announced regulation with the aim to ban mining of crypto currencies. This decision was made after its capital, Teheran, and several other large cities faced blackouts due to electricity shortages. Reason for these power shortages, which occurred on several occasions during the last few months, was increased electricity use coming from mining of crypto currencies. Due to high temperatures in Iran, crypto miners need additional power in order to cool down servers, which significantly increased the use of electricity. As CNBC estimated, around 4.5% of global Bitcoin mining is conducted in Iran.

Regardless of the latest decrease in price of Bitcoin, Cathie Wood, the founder and CEO of the Ark Investment Management continues to be positive on Bitcoin as well on stocks of innovation companies. As she noted in an interview, she is expecting deflation in the forthcoming period due to decreasing commodity prices, more than she expects inflation to occur.

Five individuals from BitConnect have been charged by the US Securities and Exchange Commission for offering digital securities to retail clients without registering securities offering with the SEC. Offering was organized through referral programs, including referral commissions and the company managed to raise $2 billion through this offer, with the promise of a lucrative monthly return of 40% made through trading with Bitcoin. BitConnect stopped working in 2018.

The U.K. based crypto exchanger Luno started a marketing campaign with advertisements in London Underground and London busses with the note “If you`re seeing Bitcoin on the Underground, it's time to buy”. The U.K. Advertising Standards Authority forbade further exposure of these commercials, as they are misleading in a sense that they do not highlight the risks of such investments.  

Crypto market cap

Although there has been some volatility in total market capitalization during the previous week up to levels of $1.7 trillion, the market has ended a week with market cap at levels slightly above $1.45 trillion. It was a sort of mixed week without a clear trend. Daily trading volumes have been modestly decreased compared to the last two weeks, and were ranging from $250B up to $300B on a daily basis. Total inflow from the beginning of this year currently stands at $667 billion, which is an increase of 84% in relative terms.

Although there has been some volatility in total market capitalization during the  previous week, up to level of $1.7 trillion, the market has ended a week with market cap at levels slightly above $1.45 trillion. It was a sort of mixed week without a clear trend. Daily trading volumes have been modestly decreased compared to the last two weeks, and were ranging from $250B up to $300B on a daily basis. Total inflow from the beginning of this year currently stands at $667 billion, which is an increase of 84% in relative terms.

Side trading was predominant on the crypto market during the previous week, with modest drop for some major currencies as of the week-end. Volatility has decreased to some extent compared to the previous two weeks. Leaders in decreased market capitalization were Bitcoin with a drop of $72B or almost 10%, followed by Ether with a decrease of $15B or 5%. Some altcoins which gained in market cap during previous week were Ethereum Classic with additional $4B, EOS with an increase of $4B, IOTA gained $2B and DASH ended the week with a surplus of $1.5B on a weekly basis. Circulating supply of leading crypto currencies has not changed during the previous week, where only Tether gained 3% in total supply, reaching $61.29B.

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

Bitcoin: second week in oversold zone

Previous week was relatively calm for Bitcoin as currency was modestly moving within a range of some $5K, between resistance at $40K and short term support at $35K. As of the week end, coin modestly moved to levels below $35K, down to $33K. During whole week, RSI was moving in oversold zone, indicating that some trend reversal could be expected soon. However, a move below the support level at $35K is indication that the next support level at $30K might be tested. Whether this would be Bitcoin`s reversal point, we will see in the coming week. However, what we are watching at this moment is a clear break of $40K resistance which would be a clear indication of trend reversal.

Currently, BTC is testing support level at $35K, and is moving around $33K, which is still not clear indication that $35K level is broken on the downside. In case that the break happens, BTC might test the next support level at $30K where 0.236 FIBO stands. Previously this level was shortly touched on 19th and 23rd May which is increasing the probability that this move might happen again. In case that $35K is not broken on the downside, then BTC will certainly revert to test resistance level at $40K. In case that resistance is finally broken, then levels of $45K and $50K will be in the spotlight.

Ether: a need to test $2K still holds?

During the previous week Ether shortly tested psychological level at $2K, with one move down to $1.770, but without any strength to continue trading at this level, Ether reverted back to previous levels. During mid-week, ETH was trying to break resistance at $2.630, but again without enough strength to make a clear break on the up side. ETH ended the week at levels around $2.200. Since, coin was not able to break the current resistance level, it reverted to the support at $2.100. However, chart suggest that the latest short term reversal to the down side is still not over, which increases the probability that $2K will be tested once again shortly. RSI went down to 40, which is supporting the probability of another $2K test.

Levels to watch during next week would be support level at $2.100, down to psychological level at $2K where 0.236 Fibonacci retracement currently stands. If this level is not broken, then the coin will revert to resistance level at $2.400 and up to $2.650 to test it again.

Ripple: bears are still holding?  

During the previous week XRP broke support level at $0.9 and shortly tested next support at $0.7. Coin soon reverted to the up side in order to test resistance at $1.0. However, without strength to break it, it reverted once again to the $0.9 support. At this moment, XRP is trading around $0.8 level. RSI shortly reached 40 but soon reverted down to levels modestly above 30. This is indication that the down trend is still not over and that there is still space for bears until a clear oversold side is reached.

Technical analysis suggests that there is still some potential for $0.7 to be tested again. It would provide a clear sign of an oversold market, where some short term reversals might be expected. On the up side, resistance at $1.0 should be watched. In case that this level is broken, then XRP will head toward next resistance at $1.20. However, at this moment, there is more indication for probability on the downside.

What’s in store for altcoins

Bitcoin Cash started the previous week at levels around $530 and moved to the upside to test resistance level at $800. However, since there was not enough demand to go further, BCH reverted modestly to the down side. It is currently trading slightly above support level at $600.  In case that current move on the down side continues, then there is probability for BCH to continue to the next short term support at $460. However, in case that current support at $600 is not broken, BCH will revert to the up side in order to test once again resistance at $800. Next resistance level stands at $1.000.

During the previous week Litecoin had a short ride to the level of $120, but demand side was higher, so LTC reverted back to test resistance at $200. Coin is currently testing a support level at $160. Based on technical analysis there is some space for LTC to move to the next support level at $180, until a clear oversold market is reached. On the opposite side, resistance stands at $200 and in case that it is broken, the coin will move to the next resistance at $230 and $250.

Binance coin (BNB) is currently trading at $300 support level, after reaching resistance at $400 during the week. However, at the beginning of the week, BNB has shortly tested support at $200, but without strength to go below this level. Current chart suggest that there is some probability for BNB to again test support level at $250, probably down to $200. This would be a clear indication of an oversold market, and that reversal to the up side can be expected. On the opposite side, current resistance stands at $400, and if broken, next resistance to watch is at $520.

During the whole previous week Dash (DSH) was testing resistance at $200, but without enough strong demand side in order to clearly break it. Coin is shortly moving to the down side and short term support level at $150. In case that this level is clearly broken, then a move to $120 might be expected. However, RSI is moving close to the oversold zone, which provides some indication that short term reversal can be expected soon. Move to the opposite side from current levels would lead DSH again to the resistance at $200 and if broken, to the level of $250.

EOS had a strong push to the upside during the previous week, to the levels modestly below current resistance level at $8. However, the coin did not manage to go beyond, so it reverted a bit to the short term support at $5. At this moment EOS is traded modestly above this level. In the coming period it should be expected for support level at $5 to be tested. In case that it is broken, EOS would head to the next support at $4. However, in case that $5 is not broken on the down side, then the coin will revert to the support at $8 once again. Next resistance line for EOS stands at $10.

During the previous week IOTA trading slowed down, between levels of $0.85 up to $1.33 and without a clear trend.  Coin is currently traded modestly above support level at $1.0. In case that coin manages to break this support line on downside, the next level to watch would be $0.75. In case that IOTA reverts again to the up side, the level which would be tested is resistance at $1.5.

At the beginning of the previous week, NEO had a strong push to the up side, to the level of $66. However, the coin ended the week around level of $50. Resistance level at $65 has been tested, but without strong demand which would push the coin above. So, it reverted to the downside. Support level at $45 still has not been tested, indicating the probability that the coin will make a move toward this level in the coming period. In case of reversal to the up side, levels to watch are $65 up to $70.

Monero (XMR) was traded sideways during the whole previous week, without a clear trend. Coin was moving in a range between levels of $219 up to $290. XMR ended the week above $230 level, which is also a short term support level for this coin. Next support level for Monero stands at $200 which might be tested in case that current support is broken. If the coin reverts to the up side, then the level to watch is $250 up to $300.  

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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