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Weekly Cryptocurrency Market Brief

After an extended period of weakness in the cryptocurrency market, we are starting to see things pick up. The various instruments are starting to show signs of bullish movements once again as many cryptos are showing signs of increased gains. Polkadot has increased by 15%, which puts it among the most improved crypto assets, however, it’s not the only one. Kusama is up by 25.5% to trade near the $515 mark. Monero is also up, gaining 14% to trade near $277 within the same time period of the other two.


Bitcoin has had a pretty bad week as it dropped from the highs of around $40,000 towards the lows of $31,000. It would have seemed as if the Bears are in control of this market, and at a glance they are, however with the presence of strong support between the $31,000 and $30,000, the Bulls are able to recover back higher towards the $36,700 mark. This climb from the lows of $31,000 represents 21.67% increase in value, which might attract more traders into the asset.


Looking at the technical point of view, specifically the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence), we can notice that the bullish momentum is starting to show itself, especially on the 4-hour timeframe. The RSI has managed to rise above the 30-level and out of the oversold area, reaching the 60-level which indicates that the bullish momentum is gathering, but only a sustained move higher towards the 70 level would really set a bullish cycle.


Ethereum hasn’t seen the same bullish presence as that of BTC. ETH has been consolidating around the $2,600 level with some bearish pressure making itself known. The instrument saw a move lower breaking through the 50- and 100-SMAs (Simple Moving Averages) on the 4-hour chart before settling around the $2,250 support. There, buyers entered the market and managed to push the instrument back to the 100-SMA which is acting as a resistance level. A break above this level would mean that the bullish momentum is back and we could be expecting more upside from Ethereum.


However, technical indicators are not showing the needed momentum to carry out a move higher. The RSI got held up at the midline barrier of 50, meaning that the bearish pressure is still in control. The drop in the indicator to 30 caused a lot of damage to the bullish presence and it doesn’t seem the Bulls are able to recover. Not to mention the near unmoving MACD which is printing right at the midline 0 with the MAs below it indicating that the overall momentum is sideways with a bearish bias.


Litecoin finds itself in the same boat as ETH. The instrument experienced some negative pressure after an extended period of consolidation. The instrument has been barely able to trade above the $190 level, eventually falling towards the $145 support. There, the Bulls were able to enter the market and push the instrument back towards the 50- and 100-SMAs on the 4-hour, where they converge at the $170. Overall, the momentum remains to be sideways, however the negative pressure is quite evident.


Despite this, the technical picture as per the RSI and MACD is showing something different. RSI has managed to cross above the 50-midline which gives the Bulls some optimism of more upside, but it’s not clear whether or not this move higher can be sustained. The MACD is also showing that the sideways movement is going to prevail with the indicator printing barely at the midline with the MAs below it showing that there is a chance of more downside 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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