Weekly Cryptocurrency Market Brief

We had expressed how last week was a week of chaos and overwhelming bearish pressure on the entire cryptocurrency market, and not just one or two. The reason for the downturn was how Elon Musk was switching between being with and against Bitcoin. This caused the pioneer cryptocurrency to fall heavily and dragged most of the cryptocurrencies along with it.

 

Since the last time we talked about BTC, the instrument has largely stayed within the same trading range between the $30,000 psychological level support and the $40,000 resistance level. The bearish pressure has continued to exert heavy losses on the instrument as it tries to pick itself up and move back higher, however with the current resistance levels acting as gatekeepers.

 

As things stand, the technical indicators RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are showing that there might be some consolidation in the future of this instrument. The recent rise in the BTC, as it attempts to break above the $40,000 resistance level, has allowed the RSI to rise as well, settling near the midline. This tells us that the instrument might be preparing to enter into consolidation mode until a more clear path opens up higher.

 

Ethereum finds itself in the same boat as BTC. ETH attempted to start a comeback rising towards the 200-SMA (Simple Moving Average) on the 4-hour chart, however, that was rejected heavily, resulting in a major move lower. ETH fell towards the $1,750 psychological support, before the Bulls stepped in to Buy-The-Dip. Traders saw an opportunity at that point and began to buy up Ethereum resulting in a march higher breaking above the $2,500 resistance and is currently trading just below $2,800.

 

Ethereum traders have their eyes set on the $3,000 mark. The current structure of the price dynamic, coupled with the technical indicator structure, gives the inclination that there might be some push higher in the near term. The RSI is currently printing just below the 60 level which corresponds to the $2,800. In order for the bullish pressure to take over the reins, a clear break above the $2,800 resistance is needed, as that would open the doors for a test of the $3,000 resistance giving the instrument a clear path even higher.

 

The same movement that was witnessed in Ethereum and Bitcoin, can also be seen in Litecoin. After reaching the lows of $145, before finding some support and rising slightly, the instrument was met with heavy resistance at $240 and forcing the instrument to drop even lower towards $120. Since then, the instrument has been able to find the needed bullish pressure to start the climb higher, even breaking above the 50-SMA on the 4-hour chart before finding some resistance around the $200 mark.

 

The technical picture is showing something of consolidation happening. By the looks of the RSI and MACD, the instrument is looking to consolidate around the current levels of $200. The RSI is printing close to the midline, without being able to break above the 60-level which indicates that there is some bullish momentum but not enough to break through the current resistances. MACD is also showing that the bullish momentum we talked about is failing as per the descending histogram as the MAs are also printing near the midline of 0.

 

(Note: The above thought piece covers the wider VA industry, and may not be an activity that Arabian Bourse Limited (ABX) is looking to be licensed to undertake.

 

ABX has received in-principle approval from Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM) and is currently in the process of obtaining an FSP. ABX aims to be the first of its kind fully regulated, virtual asset MTF and custodian in the region focused on institutional and retail investors.)

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