Last week in the news
Potential economic impact of new variants of the virus and inflator pressures continue to be major drivers of investors sentiment on financial markets. Bitcoin was testing support at $30K, while Ether was traded below psychological level at $2K.
Binance continues to be in the spotlight of the regulators and the market. After FCA banned the company from conducting activities in the U.K., Italy also warned its citizens that Binance is not allowed to provide any service to Italian citizens, not even through its website binance. The list of countries who issued similar warnings are Lithuania, Hong Kong, Japan and Ontario in Canada. At the same time, Binance announced that it will no longer sell tokenized stocks through their platform, since they would like to emphasize other products that this company is offering. Binance did not point to any specific product, but it is well known that the company has a lot of regulatory issues, some of which are related even to violation of securities rules in certain countries. However, whether this is the main reason for ban of tokenized stocks, remains unclear.
The Peoples Bank of China made an announcement that people who are travelling to China will be able to open an e-CNY wallet for the purposes of making daily payments. In this way, foreign citizens will not be in need to open a domestic bank account in order to use mobile pay applications like Tencent and Alibaba. PBOC also announced during the previous week that by now the total amount of transactions with digital yuan reached 34.5 billion yuan, equivalent to $5 billion in 70.75 million transactions and 24.5 both personal and business wallets. Digital yuan is still in the testing phase without a defined deadline for its widespread use. However, some analysts are noting that it might occur in the dawn of the Winter Olympic Games which will be held in Beijing in 2022.
In an interview to CNBC, the U.S. Treasury Secretary Janet Yellen, expressed her expectations for the inflation in the U.S. to rise for a few more months, after which it should enter into a calmer zone. She also noted her worries regarding inflator impact on families with lower income, which might be affected to some extent by soaring housing prices. Latest released figures show that yearly inflation in the U.S. reached 5.4% in June, which is the highest increase for more than a decade.
News is reporting that Ark Investment Management is selling its stocks of Chinese tech companies, after Chinese latest hard push on crypto businesses. The founder and CEO of Ark Investment, Cathie Wood commented that this move is due to drop in valuation and probability that these stocks will remain low for some time.
PayPal decided to offer its U.S. clients a higher limit for purchase of crypto currencies. Limit has been raised to $100.000 per week, in order to provide “more choice and flexibility” to its clients when dealing with cryptos.
As announced by the U.S. Treasury Department, the President's Working Group on Financial Markets will meet on Monday to discuss risks, benefits and regulation of stablecoins. Among participants will be Treasury Secretary Janet Yellen, Fed Chair Jerome Powell, SEC Chair Gary Gensler and CFTC Chair Rostin Behnam. One of the aims of this working group is to seek further protection of investors, market and financial system. It is expected that the working group will issue a statement after the meeting.
Crypto market cap
Fears of potential economic impact of new variants of the virus and inflator pressures continue to shape investors demand on financial markets. Total crypto market capitalization decreased during the previous week by $82B or 6%. Bitcoin and Ethereum, as major coins, were leading the market on the downside, although almost all altcoins lost some of their value. Daily trading volumes continue to decrease, ranging from $100B up to $115B during the previous week. Total inflow from the beginning of this year currently stands at $486 billion, which is an increase of 61% in relative terms.
Crypto currency market ended the previous week in the red zone. Almost all coins lost some of their value. Bitcoin lost $31B in market cap or almost 5%, followed by Ethereum who was down by $25B or 10%. Ethereum Classic also lost some 7% in value, however, due to increased circulating supply, the market cap for this coin remained flat on a weekly basis. From the most popular altcoins, DOGE lost $5B in market cap or 18%, while Cardano was down by $4.7B or 11%.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Bitcoin: resisting support at $30K
Significantly decreased daily trading volumes made an impact that majority of crypto currencies were traded in a relatively small price range. Bitcoin started the previous week at levels modestly below the support line at $35K, and moved down to the next support line at $30K. RSI was moving below 50 down to 40. BTC finished the previous week around level of $31K.
Current charts suggest that there might be some pressure on the $30K support line during the coming period, as BTC did not clearly test this level during previous weeks. MA50 is continuing to diverge further from MA200. The triangle formation which started at the end of May this year, with a support line at $30K is still holding, but some break might be expected in the coming weeks. It should be taken into consideration that trading volumes are still relatively low in order to push currency on one side, so it can be expected that its future price movements will highly depend on fundamentals. Having this in mind, the level to watch during next week is certainly the support line at $30K which BTC will test. In case that this level is not broken on downside, the coin will revert to the up side and to levels at $33K up to the resistance line at $35K. However, in case that market moves below $30K, the next support line stands at $25K, however, the first shortstop might be at $28K since coin touched this level during June.
Ether: looking for a triangle break?
During the previous week Ethereum continued to follow a triangle path, as a formation in technical analysis. Coin reached the down side of a formed triangle at level of $1.850. For the last two days of the week, ETH was testing this level, finishing the week modestly below $1.900. Last week, ETH did not move above $2.150, which is the resistance line for this coin. What is also an important development for the previous week is that the psychological level at $2K was broken on the downside. Significantly decreased volumes of daily trading, certainly helped coin to make this move.
By looking at current charts, there are two major developments which are emerging. First event is the triangle break. As ETH is currently perfectly following its path, soon it might be expected that coin price will come to an end of a descending triangle and will start looking for a break whether on up or on a down side. The second one is a possibility in the trading world known as a “death cross”, when a moving oscillator of 50 days crosses its counterpart at 200 days. However, technical analysis is just suggesting that there is probability for these formations to happen in the coming period, but exact timing is not possible to predict. Eventually, indication stands that some level of higher precaution is necessary in the coming days.
For the next week it could be expected that ETH will continue to test the support line at $1.850. In case that it is broken on the downside, the coin will look for a support at the next line at $1.700. However, if market sentiment moves on the upside, then it can be expected that ETH will move back to $2.000 psychological level, up to $2.100 where current resistance line stands.
Ripple: $0.5 support is still in the spotlight
Ripple was moving in a very short price range during the previous week. It started the week at the $0.65 resistance line, but during the week the coin was traded on the downside, to the level at $0.55. XRP did not test the support line at $0.5, which might be its task for the next few days. Coin is still following a descending triangle formation on the charts which started during the end of May. Supporting line of the triangle stands at $0.5 level, which is another indication that this level might be tested soon. This would be an important moment, as soon, the coin might start looking for a triangle break either on the up or down side. However, when conducting technical analysis, it must be considered that oscillators are currently at almost-touching point. MA50 moved very close to MA200 on a daily chart, indicating probability that some move on the downside might soon come.
Levels to watch during the coming week is certainly the support line at $0.5 with high probability that XRP will test it. In case that level is not broken, the coin will revert to the upside and next resistance at $0.6, after a break of $0.55. On the opposite side, current resistance stands at $0.60 and if broken, next levels to watch are $0.65 up to $0.7.
Binance Coin: looking at $250 support?
There has been more news regarding Binance exchanger ban in several countries in the world, after U.K. refused to provide a licence for its operations in the U.K. market. However, Binance Coin remained resilient to these news. Still, it did followed general market trend during the previous week. Coin started previous week around levels of $335, and went modestly on a downside, reaching weekly lowest level at $290. Coin was traded in a flat mode, finishing week around level of $300. Still, BNB is moving in a channel from end of May, between levels of $430 down to $250.
The momentum line of 50 days is still modestly moving toward MA200 line, but they are still at relatively safe distance. In line with the small price trading range, RSI was moving around level of 50 during the whole week. By looking at the current chart, it might be expected that BNB will continue to test the support line at $300 in the coming days. As the coin is moving in a channel, there is some probability that this level will be broken on downside, in order for the coin to test $250 support and also downside of the channel. In case that BNB reverts to the upside, then the level to watch would be $350 up to $380.
Cardano (ADA): can $1.2 hold?
Cardano is continuing to move in a relatively short range, but certainly following the general crypto market trend. Coin started the previous week modestly below resistance level at $1.40, and moved down to test support line at $1.20 where it is currently traded. During the week RSI fell down to levels modestly above 30, but it is still not clearly in the oversold zone. It might be expected that the coin will continue to test its current support line at $1.20 during the following days. In case that it is broken, next level to watch standing at $1.0 down to $0.9. In case that current support line is not broken, then reversal to the upside is to be expected, with resistance at $1.4 as a target.
LINK: end of a triangle is reached
Chainlink started the previous week at level of $18 but soon reverted to down side to test long term support line at $15. This move was important from the perspective of the technical analysis, considering that the coin has reached the clear end of the descending triangle. So during the next few days, it might be expected that this formation will be broken. A move on the up side will push the coin back to the resistance line at $20. However, if the triangle breaks on the downside, it might be expected that the coin will test short term support at $12, which will further open a path to the next long term support line at $8.
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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