Last week in the news
The crypto market turned bullish at the beginning of the previous week after news suggesting that Amazon might accept payments in crypto currencies. Bitcoin reached a three-week highest level, soaring above $40K, while Ether made a move to $2.5K level.
A week started with news published by Coindesk that Amazon is preparing to hire “digital currency and blockchain product lead” which led many on the market to think that there might be some potential for Amazon to start accepting payments in crypto currencies. Amazon officially confirmed to CNBC that they are looking for an expert in the digital currency segment but noted that “specific plan for crypto currencies is not true”.
One of the information closely monitored by the market is Tesla Inc. earnings filed for the second quarter. As Musk previously announced that Tesla has sold a small part of its Bitcoin holdings in order to test the market, it remained unclear how much of Bitcoin Tesla Inc still owns. As per official report, the company still holds $1,3 billion worth of Bitcoin, which is a decrease from $1.5 billion that company held in February this year. Tesla actually sold some 10% of its holdings, in which way it has increased Q1 earnings by $272 million.
As of August 04th, Ethereum will undergo technical adjustments called Ethereum Improvement Proposal (EIP) 1559 with aim to improve transactional processes. Major improvement is related to transparency of transactional fees when dealing with Ether, where clear price paid to miners should be available. At the same time these changes will reduce the supply of Ether.As analysts are noting, from the investor's perspective, it can be expected that improvements in transactional cost transparency would increase the number of transactions, and in this sense, also demand for this coin, which will be reflected in its market price.
Binance, a world largest crypto exchanger, has announced that it has decreased leverage for trading futures from 100 to 20. The reason for such a move has not been disposed of, but its CEO, Changpeng Zhao shortly commented on Twitter, that it is in the interest of customer protection. Some analysts are anticipating that this is due to tightening of regulation on margin trading in the U.S., however, without official explanation, such clarification can be treated only as an assumption.
As Business Wire reported, the State Street Corporation will provide its customers crypto currencies fund administration, in cooperation with company Lukka, a software provider.
The U.S. economy performed strongly in the second quarter with 6,5% growth, but still, modestly below expected 7%. Modest oscillation from expected growth came from new variants, which still represents major downside risk for the U.S. and world economy.
After the U.S., fear of inflation is now spreading across Europe. As per latest official information published, the inflation in the Euro zone rose 2,2% on a yearly basis, beating ECB`s target of 2%, which is mostly the impact of surged oil prices. On the other side, core inflation was 0.9% y/y. Analysts are expecting that inflation will continue to rise in the future period, peaking probably above 2,5% or higher. The ECB has recently pointed to the probability of short term higher inflation from targeted, but considering the one-off effect, it will not have an impact on change of their current monetary policy.
Crypto market cap
News regarding Amazon`s potential acceptance of crypto currencies for payments have moved the crypto market on the upside during the previous week. As investors turned bullish again, almost all coins finished the week in green. Total crypto market capitalization has been increased by $220B on a weekly basis, or 16%, ending the week at $1.59 trillion. Market movers were Bitcoin and Ethereum followed with Binance Coin. Daily trading volumes were modestly increased moving around $230B on a daily basis. Total inflow from the beginning of this year currently stands at $803 billion, which is an increase of 101%.
It was a bullish week on a crypto market where almost all coins gained in value and market capitalization. Currencies which gained the most were Bitcoin, with an increase of $145B in market cap or almost 23%, followed by Ethereum with gain of $35B or 14% on a weekly basis. Binance Coin was also in the spotlight of investors, with increased cap by $4B or 8%. In relative terms, the winner of the week was NEO, who managed to increase market cap by 52% w/w. Stablecoin Tether modestly lost some of the value due to slightly decreased coins in circulation.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Bitcoin: charts are pointing to precaution, not optimism
Last week was marked with fundamentals which pushed market expectations on Bitcoin`s further expansion in case that Amazon accepts payments in crypto currencies. Although Amazon officially stated that it is not true, investors' confidence was holding, considering that Amazon is looking to hire a person who will cover digital currencies. This news helped Bitcoin to finally break a descending triangle formation where it moved for the last two months. Highest level reached during the week was $42.5K.
Although at first glance above mentioned developments might imply to some optimism that Bitcoin is heading toward its old road, charts are pointing to precaution with conclusions. Level of $40K is important from two aspects: first, it is a strong resistance line and secondly, it is top of the channel which started as of the end of May this year. The bottom line of the channel is at a level of $30K which has been severely tested during the last almost three months. With the latest shift in price, RSI went above 70, indicating a clear overbought market, which rings the alarm that some price reversal is ahead. MA50 is modestly starting convergence toward MA200 which is positive; while negative is that they are still a bit far from each other. Daily trading volumes were increased at the beginning of the week, but during the course of the week they have been almost halved.
Bitcoin is currently testing resistance at $40K, which is a level to watch during the next week. In case that it is clearly broken on the upside, Bitcoin will be on the road to the next resistance line at $45K up to $50K. In case that $40K is not broken, BTC will continue to follow channel formation and move down to $35K, with some lower probability to test again down side of the channel at level of $30K.
Ether: EIP1559 lead investors optimism
Very important news for Ethereum during the previous week was the release of new upgrade EIP1559 planned for early August, which should significantly improve mining cost transparency. This upgrade also brings reduction in supply of Ether. Investors are expecting that changes which upgrade brings would increase demand for this coin and in line with it, an increase in the price of Ether.
However, current charts are suggesting that technical analysis is still not fully in alignment with fundamental news. During the previous week, ETH made a move on the upside to the level of $2.5K down from level of $2K, which was the highest level reached during the week. This move also represents a break of the descending triangle on the upside. RSI is moving very close to the overbought zone, but at this moment it is still not clearly there. Indicators which are currently in the spotlight are oscillators which are at this moment at the same spot on the chart. This significantly increases the probability of a clear cross between MA50 crossing MA200 from the upside.
A level to watch during following days is the current resistance line at $2.4K, which ETH is currently testing. In case that it is clearly broken on the upside, it will open a road for ETH to reach next resistance at $2.630 all the way up to $2.850. In case that $2.4K is not broken, ETH will revert back toward the support line at $2.100.
Ripple: how close is overbought market?
In line with increased market optimism, Ripple made its move during the previous week up to level of $0.76 down from $0.6. Price is currently touching MA200, while RSI is very close to the overbought zone. At the same time MA50 is slowing down a bit, implying that soon it might start converging toward MA200 from the downside. However, two oscillators are still at safe distance.
XRP is currently testing the resistance line at $0.7. RSI is indicating that some short term price reversal might be ahead. In case that $0.7 is not broken, it could be expected for XRP to revert to downside in order to test the current support line at $0.65, with some probability for next support at $0.6. On the opposite side, if XRP manages to break current resistance at $0.7 and MA200 line at the same time, then it should be expected that the coin will head up to test next resistance at $0.9.
Binance Coin: triangle is broken, but momentum holds
During the previous week, Binance Coin managed to make a clear move to the upside and break descending triangle formation, where the coin was moving since the beginning of June. BNB started the week around levels of $270 and made its move up to the resistance line at $350. It is currently trading around $330.
Resistance line at $350 has been tested during the previous week, but it has not been broken on the upside. RSI is currently around level of 60, which leaves some space for BNB to move price forward until a clear overbought market is reached. In case that BNB manages to break current resistance, the coin will move further to the next important line at $380, and potentially all the way up to $430. However, what rings the bell at the current chart is a clear cross of MA50 over MA200 from the upside, which might indicate that some price reversal is in store for BNB. In case that short term reversal occurs, then level to watch would be $300, down to $250.
Cardano (ADA): watch for $1,4 resistance
During the previous week Cardano continued its short term ride to the upside, reaching $1.40. During one short move, ADA went above this level, to $1.47, however, swiftly returned to previous levels. What is interesting to see on charts is that ADA is continuously touching MA200 for the last ten days, as its supporting line. However, at the same time, MA50 is gaining its way to MA200 from the upside, but full convergence is still not in the view. RSI is around 50, not providing clear information regarding potential reversal.
Current charts are suggesting that the resistance line at $1.4 was in focus of the market during the previous week, but it still has not been properly tested. This increases the probability that the coin will move toward $1.40 in the coming days. If the coin manages to push price above this level, then it will head toward $1.6 resistance. In case of short term reversal, level to watch is support at $1.20, which is also currently fitting into MA200 move.
LINK: upside potential still not exhausted?
Chainlink was certainly one of the coins which were in the spotlight of the market, as the coin managed to increase its price by 30% in a single week. LINK started a week around level of $16 and made its push on the upside to the level of $23. Coin is currently trading around level of $22 where it is struggling to clearly break resistance at $20. Certainly the level of $20 will continue to be in focus in the coming days. RSI is currently very close to level of 70, which would be an indication of an overbought market and upcoming reversal. Charts suggest some potential for the upside, in which sense, level of $25 will be LINK next target. In case that there is no strength for such a move, LINK will revert modestly back to current support line at $15, with some short term potential for level of $18, based on latest historical data.
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.
Find us on