Weekly Cryptocurrency Market Brief

The cryptocurrency market is still feeling the negative pressure. Bulls have almost lost complete hope of a recovery, as the technical scene is depicting a Death Cross forming on the charts. A Death Cross is when the short-term Moving Average crosses the long-term Moving Average from the top to the bottom. This usually suggests the notion of more negative pressure being applied on the market, which usually leads to more downside momentum that may last until Bulls find their support.

 

Bitcoin is a prime example of the negativity engulfing this market. As of this writing, bitcoin is suffering from the negative effects as it continues to drop, after attempting to break above the 50-SMA (Simple Moving Average) on the 4-hour chart. The instrument bounced from the $31,500 level while the Bulls are trying their best to keep things in check, however, the overall negative pressure can be seen playing a major role in deciding which direction the instrument is going to take.

 

Looking at the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence), we can notice that the theory of negative pressure is quite correct. The RSI is currently printing below the 50 midline as the curve is pointing downwards, it has also broken below the 40 mark and seeks to reach the 30 level. While that’s manifesting, the MACD is actually revealing a lack of momentum from both the upside and downside. The histogram is showing limited strength as it prints right at the 0 midline, while the MAs are below it, indicating that the instrument is more likely to move to the downside.

 

Ethereum isn’t doing all that better than bitcoin. ETH has also been moving lower, after the instrument failed to break above $2,400, the instrument started a steep downward move that led towards the $2,100 support level. Since then, Bears have been attempting another break below, in which they succeeded and reached a low of $1,875 before rising back higher. In this bounce, the Bulls attempted to break above the $2,000 level, but that was violently rejected, which led ETH to fall back towards the $1,900 just as the support levels at $1,875, $1,800 and $1,700 are trying their best to keep the Bears in check.

 

The MACD has been showing weakening of the bearish pressure while the histogram rose above the midline, and the MAs remained below the midline. However, after the rejection from the $2,000 resistance level, the MACD is back to show just how strong the negative pressure really is. The RSI isn’t far behind, as it broke below the 40-mark and is heading towards the 30 level, sending more negative signals to traders.

 

Litecoin had attempted to reach the $140 resistance level as the bullish recovery was supposed to make that happen, but with the lack of any kind of proper momentum, that simply couldn’t happen. This led to a rejection at the mentioned resistance, leading the instrument to break below the 50- and 100- SMA on the 4-hour chart. The downward trend continued to push the instrument towards $123, with the $120 acting as the main support level. The instrument witnessed another small bounce, but the 50-SMA at $130 rejected the bounce and forced the instrument to fall again.

 

The MACD is entirely negative as the histogram is fully below the midline and is showing signs of more downward pressure to happen. The MAs are below the midline, exasperating the traders who are trying to increase the bullish pressure. The RSI on the instrument shows a similar vision as that of the bitcoin and Ethereum, meaning that the indicator rejected the bounce and is currently trading below the 40 level with eyes on reaching the 30 level.

(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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