Weekly Cryptocurrency Market Brief

The cryptocurrency market has been recovering from the recent pullback to the supports. Many coins have taken the brunt of the attack as they fell far more than most investors were expecting. The focus of this week in the market was how to recover from the lows that many coins have seen. Bulls were able to start some sort of move higher, but the overall tendency in the market remains to the downside.

 

Looking at the pioneer cryptocurrency, BTC (bitcoin), we can notice how it was able to jump from the support around $48,000 towards the $56,000 resistance level. The instrument broke through the $51,300 and through the 50-SMA (Simple Moving Average) on the 4-hour chart. This was a major win for the Bulls as they could start the upward movement towards the previous highs. However, it would seem that they were unable to predict just how many sellers are actually at the $56,000 level.

 

This resulted in a consolidation at the resistance level, while both the Bears and Bulls battle each other for supremacy. The RSI (Relative Strength Index) along with the MACD (Moving Average Convergence Divergence) are showing that the momentum higher is all but depleted. The former is printing just below the 60-level indicating that the bullish momentum is still not in complete control, especially since the instrument was sent below the 30 level in the last pullback. The MACD is showing the same lack of momentum in either direction.

 

It’s not only BTC that is caught in consolidation mode, but LTC (Litecoin) is also caught in a tight consolidation as well. When we last left LTC, we had expressed how the instrument was trading between the 50-SMA as an upper bound and the 100-SMA as a lower bound. The instrument continued to trade in a volatile manner, eventually the Bears won the battle forcing the instrument to drop towards the $220 support which coincided with the 200-SMA on the 4-hour chart. Bulls were able to establish a solid base and start an upward move that saw the instrument attempt to break above $260.

 

However, the resistance coincided with the 100-SMA as the RSI and MACD are both showing the lack of momentum taking hold of the instrument. This pushed LTC back into the consolidation zone with the 100-SMA acting as an upper bound, and the 50-SMA acting as a lower bound. MACD is showing the lack of momentum with the histogram printing right at the midline, while the RSI seems unable to break above the 60 level in order for the bullish momentum to continue.

 

While BTC and LTC are battling against their respective consolidation zones, ETH (Ethereum) has continued its upward movement after establishing the $2,300 level as a solid support. It helps that the mentioned level also witnessed the convergence of the 100 and 50-SMA on the 4-hour chart. The instrument continued to break through important resistance levels such as the $2,500 as well as the $2,650.

 

The instrument continued to move past these resistance levels and reached the $2,800 before encountering enough sellers to put a dent in the upward move. Looking at the indicator composition, we can notice that the RSI is between the 60 level and 70 level, meaning that it still hasn’t entered the overbought zone and there still might be enough room for an upside move. However, the MACD is showing that momentum is slowly moving lower since the histogram is showing signs of falling.

(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-principal 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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