Last week in the news

Ether reached new ATH, at a level of $3.855 late Saturday. Coin is highly supported with the emerging ecosystem around Ethereum blockchain, especially with its use in decentralized finance (DeFi) and increasing popularity of NFT`s. With the latest surge in price, ETH has beaten BTC in yearly price increase, adding 350% versus 97% for BTC since the beginning of this year.

Spotlight of markets during the previous week has been on weaker than expected US jobs data for April. US companies managed to add 266.000 jobs during April, which is significantly lower from market expectations of 978K. At the same time the unemployment rate jumped to 6,1%, instead of dropping to 5.8% which the market was expecting.  Latest non-farm payrolls drop indicated that the US recovery might take a bit longer than previously expected. FED Chair Powell noted after the latest FOMC meeting, that current recovery was significantly supported with Government measures and aid money.  Treasury yields on the 10Y benchmark rate dropped to 1.469%, from previous 1.6% levels, after investors decreased expectations that FED will raise interest rates any time soon. At the same time Gold has broken two months highs, at the latest price of $1.840.

In an interview with CNBC, SEC Chairman Gary Gensler said that more regulation on crypto currencies is needed in order to protect investors. This also refers to an update of regulation in order to ensure that misinformation and misuse of public influence do not occur. As he noted, he sees Bitcoin as a “speculative store of value”, but he also sees SEC`s role as “technologically neutral” with respect to market innovations.

As Coindesk reported, Iranian Central bank will ban all crypto currencies that are mined outside their country. This regulation is coming as an attempt of the central bank to halt flow of funds outside the country. At the same time, Turkey is making an effort to swiftly introduce regulation which would cover business of crypto exchangers. Namely, as per currently available information, all purchases of crypto currencies which exceed $1.200 would fall under anti-money laundering regulation and needed to be reported to regulators. Some time ago, there has been market information that Turkey's government is planning to ban all crypto currencies, after which two crypto exchangers went offline.

New index will be launched by S&P aimed to cover digital assets. The S&P Digital Market Indices would consist of the S & P Bitcoin Index, Ethereum Index and Cryptocurrency MegaCap Index. Data will be sourced through Lukka crypto data provider.

Dogecoin gained significantly during the previous week, again after new tweets from Elon Musk and also in expectation of his appearance on US show “Saturday Night Live”. In his latest tweets he called for precaution in investing, saying “cryptocurrency is promising, but please invest with caution! “. Majority of analysts are in agreement with this statement. As this coin is referred to on markets as a “joke coin” whose only aim when initially created was to make fun of Bitcoin, and that it gained more than 26.000% in last six months, as well as still unclear love-story between meme and Elon Musk, some precaution would be more than reasonable.

Crypto market cap

Crypto market capitalization continued for a second week with strong increase. This is also another week which was not led by Bitcoin, but with Ether and few other altcoins. During the previous week, market cap reached $2,4 trillion, which represents an increase of $237B or almost 11% on a weekly basis. It is also the new all time highest level reached. Daily trading volumes are also slightly higher, moving around $500B on a daily basis. Total inflow from the beginning of this year is $1,6 trillion which is an increase of 203% in relative terms.

Although the majority of coins gained, the previous week was certainly marked with Ether and DOGE. Ether gained additional $113B in market cap which represents an increase of 34% on a weekly basis. Second place is reserved for Dogecoin who gained some $41B or 87% for one week. Bitcoin had modest performance with additional $23B in market cap or 2%. One of rare coins which ended the week in the red zone is Ripple whose market cap was decreased by some $15B or 22%.  

Bitcoin: takes time to test resistance at $60K

Bitcoin was traded in a mixed mode during the previous week. BTC started a week with a selling pressure, reaching $53K, but soon reverted to the up side and ended this week at levels around $59K. What is emerging from market data is that interest in BTC have modestly declined during previous few weeks and interest of investors has been switched more to altcoins. Ether had always been a silent shadow of BTC, but for the first time in history it is outperforming BTC. Still, this could be treated as short term market development, as BTC is the oldest coin with still highest market capitalization and also coin with its own ecosystem.

Technical analysis suggests that BTC is moving between two important points during the previous two weeks, which are support at $50K and resistance at $60K. Currency was unable to break both of them. As last week`s bottom was at levels slightly above support level, suggests that there is ongoing modest increase in demand, switching pressure on the up side. As the chart is revealing a modest up trend, it could be expected for pressure on resistance at $60K to continue for some time. Up trend is also supported with RSI which is currently around level of 50, after reaching a clear oversold market. In case that current resistance is broken on the up side, then move to $63K and $65K can be expected, as BTC will test next short term resistances at these levels. In case that resistance is not broken, then BTC will revert to down side in order to test support levels at $55K down to $50K once again.

Ether: time for a short term break?

Positive news around Ethereum blockchain`s evolving ecosystem have pushed ETH to  new ATH`s for a second week in a row. Token is currently traded around levels of $3.900, while the highest reached price was $3.950 at late Saturday trading. During the whole week RSI is moving above level of 70, indicating a highly overbought market. Regardless, ETH continued to higher levels. Such a strong demand is certainly supported by news that Ethereum blockchain is currently strongly building its presence in the financial industry as well as in the field of non-fungible tokens. What is currently evident from market behaviour is that there is positive correlation between DeFi growth and price of ETH.

Ether made a strong move on Saturday from level of $3.500 up to almost $4.000, regardless of clear overbought market, indicating increased investors interest for this coin. Some short term reversal can be soon expected, but if ETH had reached its full potential in this round on the up side, cannot be said with high confidence. However, when it occurs, it could be expected for some quite short term support levels to be tested at $3.500 or $3.000.

ETHUSD chart with support and resistance lines RSI.png

Ripple: still holding to $1.60 resistance

For the last two weeks XRP has been testing resistance at $1.60, although the coin lost some of its strength during the previous week. At the same time XRP tested long term support at $1.40, but without strength to break it, the coin reverted to test resistance level at $1.60 one more time. As RSI is moving around level of 50, there might be a possibility for level of $1.60 to be tested once again. In case that it is broken on the up side, next resistance stands at $1.80, up to $2.40.  At the moment, the level to watch would be $1.80 due to potential formation of double top, in case that this level is not broken on the up side. It would be a certain indication of trend reversal. In this case important levels would be $1.40 down to $1.20.

XRPUSD chart with support and resistance lines RSI.png

What’s in store for altcoins

After a strong move on Wednesday from level of $950 up to $1.600, Bitcoin Cash reverted a bit to the down side as the overbought market has been clearly reached. Long term resistance stands at $1.600 where BTH was last time in May 2018. In case that this level is broken on the up side, then the coin might head to test next long term resistance at $2.000. However, short term reversal might be ahead, so short term levels to watch would be $1.300 down to $1.200.

Strong up trend for Litecoin continues, regardless of some short term volatility in price on the down side. Resistance at $300 was clearly broken on the up side during the previous week, and the coin headed toward the next important level at $330. RSI went above 70, which is a clear indication of an overbought market, so some short term reversal can be expected to level of $300. Next support level below, stands at $250.

Binance coin has strongly continued its rally to the up side. During the previous week new ATH has been reached at level of $680. Coin is currently holding modestly below this level. Some short term reversal might be expected in the coming days, at least to a level of new short term support at $600. However, in case that resistance at $680 is broken, then the coin would head to the newest ATH.

Dash (DSH) reached a new peak during the previous week at level of $480, at a higher level than previous one reached in April this year at level of $400. This is an indication of a clear up trend, while coin still have some space to reach long term resistance at $520. In case of short term reversal, short term levels to watch are $380 down to $320.

EOS had an extremely good week with price moving from $6.2 all the way up to $13, which is more than doubled in value. RSI clearly went above level of 70, after which the coin reverted a bit to down side as an overbought market has been reached. It is currently traded around level of $10. Long term support level stands at $8, which might be tested during coming days.

IOTA had solid performance during the previous week with moves from $1.8 up to $2.3. However, coin did not manage to hold for a longer time at this level, so it swiftly entered into a short term reversal down to current level of $2.1. Since resistance at $2.2 has not been broken, levels to watch are short term support at $2 down to $1.8 which might be tested again.

After testing resistance at $90 for some time, NEO finally managed to break it during the previous week. Coin also managed to break next long term resistance at $110, currently trading around $120. Next long term resistance level stands at $140, which NEO would probably try to reach in the following days. In case that there is not enough strength to break this level, then the coin will revert to support levels at  $110 and down to $90.

It was a great week for Monero (XMR) as it managed not only to reach old ATH at $460 but also to point at new ATH at $517. Coin is strongly heading up, and with RSI currently modestly below 70, there might be some short push more to the up side and possibility for a new ATH in the coming week. In case that coin reverts to down side, levels to watch would be $460 and $420.

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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