Weekly Cryptocurrency Market Brief

More negative pressure can be observed in the cryptocurrency market. While some instruments have been able to keep a consolidation going on for the most part of the week things were bound to change. We have seen how the negative pressure has built up on these cryptos and the result was a big move towards the downside, breaking through the lower bound of the consolidation. The Bulls are questioning themselves at this point to see if they should put up a stand and let the market run to reach a floor before taking the next course of action.

 

Bitcoin has been caught in a consolidation since the beginning of the month, trading between the $35,500 as an upper bound and the $33,000 as a lower bound. The instrument was traded between these two levels for the better portion of a week, as BTC was able to reach the mentioned upper bound, however, with the convergence of the 200-SMA (Simple Moving Average) with the upper bound, the instrument quickly turned tail and fell breaking below the $33,000 support as of this writing.

 

The momentum indicators, specifically the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence), are showing that this increase in negative momentum is just in the beginning stages. The RSI is showing the negative momentum in full force as the indicator has broken below the 40-level and is approaching the 30-level which usually indicates that the instrument is in for an extended period of negative pressure. The MACD only proves this point with the MAs pointing downwards, while the histogram has turned red and seems to be increasing.

 

Litecoin is in the same boat as Bitcoin, as the instrument’s consolidation between the $150 upper bound and the $130 lower bound seems to be coming to a close. LTC has been trading between the mentioned levels, as neither Bulls or Bears could catch the upper hand and actually break the dynamic, that’s until this writing. We are seeing how the Bears are gaining enough momentum to push the instrument below the $130 support. Breaking below said level would subject LTC to the $120 support and $105 in extension.

 

The RSI on Litecoin is very similar to that of Bitcoin. The negativity is quite clear with the indicator printing below the 40-level and seems on course to continue moving lower to reach the 30-level. This usually means that the instrument is set for a negative move. The MACD is also confirming the down trend with how the indicator is printing below the midline and there seems to be more negativity coming its way.

 

Bitcoin and Litecoin were consolidating as they traded in their respective ranges, however, it would seem that Ethereum is the odd instrument out. Those two were trading in a sideways direction, going nowhere fast, however, ETH has been moving higher as the positive momentum was clearly the favored on this instrument. Ethereum managed to break above the 200-SMA on the 4-hour chart reaching a high of $2,400, where it attempted to break above it twice already. However, ETH was also touched by the negative momentum and pushed the instrument below the 200-SMA and 50-SMA on the same time frame.

 

The negativity is evident as per the RSI which is trading right at the 40-level. This gives the Bulls some hope as they would be seeing the current level of ETH at $2,160 as a support to stage another comeback higher. If the instrument is able to pull that off, it could delay the negative momentum a bit further, but the MACD is not reinforcing that idea. The indicator is showing negativity with the MAs pointing downwards and the histogram showing more and more red.

(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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