Last week in the news
U.S. equities bounced a bit back on Friday; however, they are still below levels from the beginning of the previous week. Crypto market had a modestly volatile week, but still ended in a weekly profit. Bitcoin erased losses from the beginning of the week by reaching levels above $21K, while Ether bounced back to $1.3K level.
The most significant news during the previous week was the release of the U.S. inflation rate, which reached new highs at 9.1%. This was above market expectations of 8.8%/ At the same time core inflation was also above market estimate at 5.9%. On the other hand, released data on the US retail sales were also higher from market expectations at 1% compared to expected 0.8%. JPMorgan`s CEO, Jamie Dimon, commented the state of the US economy noting that it is good that there is economic growth, supported by job market and consumer spending, but then he turned to the overall general negative trends in the world, summarising that it will have “negative consequences on the global economy sometime down the road”. Still, what concerns investors after the release of latest inflation figures are further moves from the FED. Several FED officials publicly commented that they will support further increase of interest rates in order to cope with inflation, noting figures from another 75 to 100 basis points. Next FOMC meeting is scheduled for 26-27th July, so more information on how the FED perceives the current state of the economy will be available.
The Senate of Paraguay approved the bill which will regulate crypto mining and trading in this country. This is the second time that the Senate passes the bill, after it has been returned for modification from higher authorities. The bill introduces anti money laundering regulation within crypto businesses as well as part for the energy supply for these companies.
Ethereum`s fork Merge might occur on September 19th this year, as per statement made by Tim Beiko from Ethereum Foundation. This fork will enable Ethereum`s network to move from higher energy use for proof-of-work to more efficient one.
Total venture capital investments in the crypto industry dropped by 26% during the first six months of this year, as per estimates. Still total investments during this year hold at significant $9.3 billion. Negative developments on the crypto market in terms of terraUSD, Celsius and Three Arrows Capital collapses were few of the major contributors for investors to withhold the capital from this industry.
Uniswap (UNI) token increased its value by 20%, after Robinhood Markets, one of the popular brokers in the US, added this coin to its trading platform.
Crypto market cap
Surging inflation in the US implies further monetary tightening by the FED, which continues to be a main reason which is holding investors from both equity and crypto markets. This further drives a conclusion that market recovery is still on hold and probably will be for some time in the future. During the previous week total crypto market capitalization remained relatively flat on a weekly basis. Crypto cap reached $939B which is a modest increase from the previous week by 1%. Daily trading volumes were further decreased, moving between $67B and $97B on a daily basis. Total funds outflow from the beginning of this year holds at $1.242B, which is a drop of 57%.
Previous week was relatively flat on the crypto market, however, not for all coins. Bitcoin, the most dominant coin, lost some $7B in value compared to the end of the week before, however, Ether was up by $14B or 9%, supported by the news regarding new fork release in September. Since major altcoins were relatively flat, the market was driven by emerging coins in popularity on the market. Uniswap`s market cap was up by 14% supported by Robinhood Markets as this broker made the coin available for trading on their platform. Another coin with a significant surge in market cap by 22% was Polygon, followed by Monero which increased its cap by 11% on a weekly basis. Tether slowed the decrease in coins in circulation to 0.2% previous week.
Crypto futures market
Based on the movements of the crypto futures market from two weeks ago, it seems like investors are starting to slowly position their investments, anticipating some positive movements by the end of this and next year. However, the previous week was under the impression of negative macro-fundamentals in the US, in which sense, long term futures lost some of their strength gained two weeks ago.
In line with the spot market, BTC futures were down by some 4% on average for all maturities. BTC futures ending this year modestly dropped to $20.7K from $21.5K from two weeks ago. On the other hand, there had been some positive developments for ETH futures with shorter maturities, which gained some 2% on average. Since the official futures market closes on Friday, latest prices did not manage to catch a surge in ETH price from the weekend, so closing prices were above $1.2K. As for futures maturing as of the end of this year, they continue to hold around $1.2K.
Table below provides the most recent information on BTC and ETH future prices.
Bitcoin: scepticism remains
Posted macro fundamentals during the previous week shows that inflation in the US is still very strong, implying that the FED will most probably continue with its tight monetary policy. This would mean less liquidity to invest in the markets, and the crypto market is also one of them. Investors are currently looking at the next FOMC meeting, which will be held as of the end of this month. Although Bitcoin managed to sustain a $20K support line, scepticism still remains on the market, which does not allow for a stronger rebound.
It was a relatively volatile week for Bitcoin. During the first half of the week, $20K support has been tested for one more time. Lowest level reached during the week was $18.8K, however, not for a long time. Soon, BTC reverted back to the level of $21.5, around that level the coin is also finishing the week. RSI reached level of 50, but it still does not clearly indicate that the market is ready for a move toward the overbought side. Moving averages of 50 and 200 days are still diverging from each other, without indication of a slowdown in this move.
Charts are pointing to a sort of side trading for BTC since mid-June. It is positive for the coin that the support line at $20K managed to sustain selling orders and hold strongly the support line. On the other hand, there is still not enough market strength to push the coin to the higher grounds, considering generally decreased trading volumes on the crypto market. If BTC manages to head toward higher grounds, it could be expected that $23K short term resistance will be its next target. On the opposite side, there is a possibility that the $20K support line will be tested again in the coming period.
Ether: positive news imply positive moves
It was quite nice to see that the eyes of inventors are back on Ether. For some unclear reason, Ether was completely neglected by the market, which pushed coin all the way down to $1.0 support, during the latest period. It looks like things are changing as investors have moved from strictly macro fundamentals toward actual good developments occurring with Ethereum at this moment. Namely, as it has been announced by Ethereum Foundation, fork will be released on September 19th, and will bring for Ether an efficient proof-of-work which will consume significantly less energy.
ETH started this week by testing one more time support line at $1.0K. Without strength to break it, the coin reverted to the upside, and moved toward the short term resistance line at $1.2K. As this line was also broken, the next stop for ETH was long term resistance at $1.4K. ETH is ending the week modestly below this level. Relative Strength Index broke level of 50 and stopped around 58, implying that market will certainly look for an overbought side in the coming period. Moving averages of 50 and 200 days continue their modest divergence from each other, indicating that potential cross is not in store for this coin in the coming period.
Current charts are suggesting that ETH will start week ahead by testing the resistance line at $1.4K. Current, relatively lower trading volumes are modestly decreasing probability that this line can be broken to the upside. If, by chance, this occurs, then the coin will certainly head toward $1.520 next resistance. On the opposite side, there is a probability for ETH to test the support line at $1.2K.
Ripple: what about $0.4?
Slow motion moves continue for XRP, but with some positive indications based on technical analysis. Charts are starting to point toward the $0.4 resistance line, however, considering decreased daily trading volumes, it might take some time till XRP reaches this level in the coming period.
Previous week was positive for XRP, regardless of the coin`s slow moves. Coin started the week by testing the $0.3 support line, but without market strength to break it to the down side. Still, during each day in the week, buying orders were the dominant ones, so the coin slowly moved to the upside toward the resistance line at $0.35, where XRP is finishing this week. On a positive side is that RSI made its move above level of 50, reaching 55, indicating that the market might head soon toward the overbought side. This increases the probability for $0.4 to be the next target of XRP in the coming period. Moving averages of 50 and 200 days stopped their divergence, but they are currently moving as two parallel lines. There is still no indication that a potential cross might occur soon.
Current charts suggest increased probability for the $0.4 resistance line to be tested in the coming period. However, before that, XRP needs to find enough market strength to break the current resistance line at $0.35. On the opposite side, there is a probability for XRP to test the support line at $0.3 for one more time, while there is no indication that this line might be breached to the downside.
Binance Coin: opening path to $300?
Under the sentiment of the bearish market, BNB, like many other coins on the crypto market, was pushed to the lower grounds without an obvious reason. Based on its latest moves, it seems like that the market started to look at actual value of the coin, and not only toward macro economics, which would certainly be positive for BNB in the future period, considering Binance`s latest significant business expansion.
Although BNB started the previous week at lower grounds, above the support line at $200, the rest of the week the coin was heading toward the resistance line at $250. This line has been clearly tested, and the coin also finishes this week around this level. Buying orders were dominant on the market during the whole week. RSI was pushed above the level of 50, reaching 57 as of the weekend. This implies that the coin might soon reach overbought territory, which certainly opens the path toward the next resistance line at $300. For the last two weeks, moving averages of 50 and 200 days slowed down their divergence from each other and are still moving as two parallel lines. Cross is still not in prospectus.
Current charts show that BNB will start a week ahead by testing the resistance line at $250. There is increased probability for this line to be broken to the upside, when the coin will head toward the next resistance line at $300. However, on this road, there could be short stops around the $270 level. On the opposite side, there is some probability for $200 support to be tested for one more time.
Cardano (ADA): still no strength for higher grounds
Side trading continues for ADA. It seems like the market is looking for a certain end of the bearish market in order to push this coin to the higher grounds. On a positive side, the support line at $0.40 is holding strongly, while during the week, the coin managed to reach its highest level at $0.45. Daily trading volumes continue to be decreased, on a positive side, previous week buying orders were the dominant one on the market.
Relative Strength Index continues to reflect market`s side trading. During the week the indicator moved from 35 up to 45, still not indicating that the market is ready to head toward the overbought side. Moving averages continue to move as two parallel lines, without any indication that they might start with convergence toward each other in order to make a cross.
As daily trading volumes continue to be significantly decreased, it could not be expected that ADA will make some significant moves to any side, in which sense, side trading might continue for some time in the future. In this sense, it could be expected for the $0.40 support line to be tested one more time. On the opposite side, a move toward $0.5 resistance would require for ADA to make a break from the $0.45 resistance line.
LINK: is it time for higher levels, or still not?
Side trading continues for LINK third week in a row. During the previous week, the coin managed to move in a range from $5.6 up to $6.57. On a positive side is that during the last four days, buying orders were the dominant one on the market, which might further support the coin in the week ahead.
Positive development as of the end of the week was that RSI was pushed modestly above line of 50. This is indication that the market is looking for the path toward the overbought side. With such development, a path to a new resistance level might be open. Moving averages of 50 days stopped its modest divergence from MA200 counterpart and currently they are moving as two parallel lines. Still, there is no indication of a possible convergence toward each other and cross in the coming period.
As per technical analysis, there is still space for LINK to test the $7.0 resistance line, which coin did not manage to do during the previous week. As daily trading volumes are decreased, the market still does not have strength for a clear move toward $7.0 and above. However, dominant buying orders are increasing such possibilities. On the opposite side, the support line at $6.0 might be tested for one more time.
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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