Weekly Cryptocurrency Market Brief

The cryptocurrency market has run out of steam to the upside after the weekend. During that time, investors decided to start to liquidate whatever positions they had and enjoy the gains they’ve made. Following that, most of the crypto assets have consolidated during Monday’s trading day. However, that simply couldn’t be sustained, as headwinds continued to increase during Tuesday and Wednesday which led the assets to fall. Altcoins suffered the most, with Ethereum almost testing $3,000 due to a rejection near $3,400. Ripple and Dogecoin are also in the red, having lost 1.1 and 2.9%, respectively. The rest of the top 50 tokens are mainly in red, apart from a selected few.

 

Bitcoin has been showing a great deal of bullish pressure ever since the last test of the $44,000. The instrument managed to find the needed momentum to break higher and attempt a break through the $50,000. This came as a massive push for the Bulls as they desperately needed some good news to continue the move higher, however, the momentum higher encountered heavy resistance at the mentioned level, forcing the instrument to retreat. The retreat has forced BTC to break below the 50-SMA (Simple Moving Average) and the 100-SMA on the 4-hour chart, which is only adding to the fact the Bears are back in control of the situation.

 

Looking at the Momentum indicators, specifically the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence), we can clearly note that the Bears are in control. Starting with the RSI, we can see that the indicator is currently printing at the 40-level, this is very important to take note of as if the negativity continues to increase and results with a break below the mentioned level, we could be seeing a drop in BTC towards the $44,000 support. The MACD is not denying this theory. The MAs are printing downwards and below the midline, while the histogram is also showing the prospect of increasing negativity in the near term.

 

Ethereum had seen almost the movement in the price as BTC. ETH has gained enough momentum to continue moving higher toward the $3,400 level, however the level of bearish pressure available at the top levels contributed to the recent pullback it faces. The instrument attempted to consolidate at the mentioned resistance, but eventually the Bears won out and pushed ETH lower, breaking below the convergence of the 50- and 100-SMA on the 4-hour chart. Now, Ethereum is heading back lower towards the $3,000 support.

 

The mentioned resistance is quite strong, being the 61.8% Fibonacci retracement taking the drop from the high of $4,385 to the low of $1,700. This gives so much power to $3,400 as breaking above that level would mean that the Bulls are back in control. The RSI on the 4-hour chart has currently dipped below the 40 level, meaning that the Bears are quite strong at this point in time, but they haven’t gotten complete control, only a break below $3,000 and the 30 level on the RSI would accomplish that.

 

Litecoin is trading up alongside the rest of the crypto market for the week, i.e. more downside to be expected. LTC looks to have formed an ascending triangle pattern, with that said, the current price action of the instrument shows that the support of the triangle might be on the verge of breaking. However, there doesn’t seem to be enough bullish momentum to counteract this move. The crypto trades above the 50-DMA (Daily Moving Average), but below the 200-DMA, indicating the crypto is likely in a period of consolidation.

 

The crypto may find support near the 50-DMA, while the 200-DMA could hold as resistance. Looking at the price movement, we can notice that the $200 level has been an area Litecoin struggles to cross above, this price level may continue to hold as resistance in the future. The higher low trendline has been an area where the price has been able to find support and stay above, it may continue to hold in the future.

 

 

 

 

 

(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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