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Weekly Cryptocurrency Market Brief

The cryptocurrency market is in the process of consolidation, which it has been for the past couple of weeks. After the major downturn that happened, the market has been trying to hold off any more negative pressure, while at the same time building enough momentum to move higher. These opposing forces have been making the moves in an attempt to take over the market, but so far there hasn’t been a clear winner.


Over the past week, bitcoin has been bombarded with negative pressure after it failed to break above the $40,000 resistance level. This level is what the Bulls are aiming for to reclaim the reins of the market. The drop that followed the rejection, pushed the instrument below the 50-SMA (Simple Moving Average) on the 4-hour chart reaching the $33,000 support level, however, soon the instrument began to rise back higher as it currently breaks above the 100-SMA on the same time frame.


Technical indicators, specifically the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence), are showing signs of bullish pressure taking over. The RSI is currently in the process of breaking above the 60 level, indicating that the negative momentum is slowly dissipating and the bullishness is on its way back. The MACD is also showing signs of bullish behaviour as the indicator MAs have broken above the midline with the histogram turning green.


Ethereum has also been trading in a consolidation manner between the $2,950 as an upper bound and the $2,250 as the lower end. After the rejection of the move above the resistance at $2,950, the instrument fell heavily to the mentioned support, that’s when the Bulls entered the market and began to move higher breaking through the 50 and 100-SMAs on the 4-hour chart. It would seem as if ETH is aiming to break above the mentioned resistance in an attempt to move towards the $3,000 and hopefully break above the 200-SMA.


The technical background on the ETH shows that the RSI is breaking above the 60-level indicating that the bullish momentum is returning. However, that’s not enough to completely say that the market has turned bullish, as the RSI would need to start printing closer to the 70-level in order to comfortably say that Bulls have the market. The MACD is showing the same exact formation with an increase above the midline of 0 and the histogram is showing that there is enough room for an increase in momentum.


Litecoin finds itself in a similar situation as BTC and ETH, however its consolidation seems to be much more defined than that of ETH or BTC. The instrument attempted to break above the $200 level, managing to reach the $210, but quickly found the sellers waiting, forcing the instrument to fall back towards the $160 support. LTC found enough support at the mentioned level to attempt a move higher, breaking above the 50-SMA (just barely) as it comes face to face with the 100-SMA on the 4-hour chart making it that much more difficult for the instrument to make any kind of upward move.


The RSI and MACD as both showing that the momentum is all but gone. There seems to be some kind of bullish potential as per the RSI which has recently passed the 60-level, but not enough to say that the bullish momentum has made it into the instrument. A solid increase in the RSI and MACD is needed to say that. Speaking of which, the MACD seems to be showing that consolidation is the way to go. Looking at how the MAs and histogram are so close to the midline, suggests that there isn’t enough momentum to continue higher or lower.

(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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