Weekly Cryptocurrency Market Brief

Over the past week the cryptocurrency market has been moving higher. The overall bullishness of the market has presented itself with many instruments breaking above their respective resistance levels. However, with this move higher, it also meant that there was bound to be some consolidation going on as the move higher also meant that momentum would be waning. With that said, let’s take a look at how Bitcoin, Ethereum, and Litecoin are doing.

 

When we last spoke about bitcoin, we had mentioned how the instrument has been facing some negative pressure, especially after the inability to properly break above $46,000. However, the $44,000 has been acting as a solid support for BTC. Over the past week, Bears have been attempting to break below said support, but the Bulls have kept their footing solid and have disallowed the move from happening. This gave the Bulls the needed momentum to attempt another move higher, which was able to break above $48,000 and is currently eyeing the $50,000.

 

Looking at things from an indicator point of view, we can notice that the RSI (Relative Strength Index) and the MACD (Moving Average Convergence Divergence) are showing that the bullish momentum is in control for the time being. The high that Bitcoin managed to reach before the consolidation set was $49,400, which also happens to be the 70 level on the RSI. Coupled with the fact that the MACD is actually pointing higher and the histogram turning green, shows that Bulls are in complete control and we can expect even more upside for the time being.

 

Ethereum is also facing the same challenges of bitcoin. ETH has also been stuck in a consolidation between the $3,360 as an upper bound and $3,040 as a lower bound. These two levels represent the 61.80% and 50.00% of the Fibonacci retracement taking the drop from the high of $4,385 to the low of $1,700. The instrument has been showing real bullishness in its ability to rise from the mentioned low all the way back to current levels. However, in order for the bullishness to continue, a clear break above $3,360 is needed. This would break the consolidation and would mean that Bulls are in absolute control.

 

Looking at the indicators, we can almost see the same exact picture. The RSI has dipped below the overbought zone, back to the 60 level indicating that the instrument has had enough time to rest and gather what strength it has to make another push higher, but in order for the bullishness to really return a break above the mentioned level is needed. MACD is showing that the MAs are above the midline, but it also raises a red flag as the histogram is actually printing red. This could be a sign that the Bears have a chance of turning the momentum around.

 

Litecoin is not looking as good as the other two major cryptocurrencies. While BTC and ETH have both managed to break through their respective 50.00% Fibonacci retracement level, LTC has barely struggled to move above it’s 23.6% Fibonacci level. LTC’s Fibonacci retracement takes into consideration the move downward from the high of $415 to the low of $104. This makes the 23.6% Fibonacci level at $180. This level is key for the instrument to regain some momentum and continue moving higher. However, in order to say that the momentum has changed, LTC needs to break above $295 which is represented by the 61.80% level of the same retracement.

 

The momentum indicators of RSI and MACD, however, don’t see there’s a chance of this happening. MACD is showing a decrease in momentum, with how the histogram is showing a move into the red. True that the MAs are still pointing higher, but the overall picture paints a less than ideal outcome. The RSI also shows some negativity forming, with how the line points lower and the recent move below the 60 level. With that said, there is still some hope for the instrument to rise once more, if and only if the LTC manages to break above the 200-DMA (Daily Moving Average) at $195.

 

 

(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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