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Weekly Cryptocurrency Market Brief

Many coins have been consolidating their losses after the heavy drop that they have experienced. The most notable reason responsible for the current drop in the crypto market can be attributed to the recent pressure that the Chinese government has issued against miners. The government has issued a warning to all miners operating within its borders that they must cease their operations. This is colossal, seeing that 75% of global miners operate within Chinese borders, causing some panic in the crypto market.


Bitcoin faced massive bearish pressure over the past week. It had previously attempted to break above the $41,000 resistance line, but the bullish urge to drive the instrument higher was just not enough to do so. The result was a pullback towards the 200-SMA (Simple Moving Average) on the 4-hour timeframe. However, even that line was unable to keep the bearish pressure from dropping the instrument lower. BTC continues to move downwards breaking through the 50- and 100-SMAs on the same timeframe. That earthward burden continues to push the instrument down, reaching a low of $28,800 before correcting higher.


The technical indicators of RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are also showing that there is some corrective pressure being applied. The RSI has bounced from the oversold territory at the 30-level and managed to move higher to the 50-level, represented by $34,500 on the price chart. This rise showed the curative power in action, as the indicator is printing between the 50 and 40 level which usually represents some consolidation. This theory is further strengthened by the movement of the MACD which shows MAs below the midline, but the histogram is above the midline and printing green.


Bitcoin was not the only instrument that showed heavy losses. Ethereum is in the same boat as the pioneer cryptocurrency. ETH continued to fall heavily accumulating losses as it broke through the $2,200 support. Bulls had tried to intervene at that level, but the Bears were in control of the flow, forcing the instrument to extend losses towards $2,000. The instrument even fell further down, breaking beneath $1,800 reaching a low of $1,700, from that level, ETH managed to find the needed momentum higher to reach back towards the $2,000 resistance level as it tries to recapture it.


Looking at the RSI and MACD momentum indicators, one can notice that the negative impulse is indeed the dominant force at the moment. Even though the RSI managed to move above the 30 and oversold territories, it still remained below the 50 mark. Alone this would compel the Bears to continue to push the instrument lower, but Bulls are not having any of it. The MACD paints a very similar picture, as the MAs are below the midline but are pointing higher, while the histogram is printing green, but there seems to be a weakness in the momentum.


LTC was trading in a modest way, above the 50 and 100-SMAs on the 4-hour chart. Yet, the Bears soon found enough negative momentum to push the instrument lower. Litecoin broke below the mentioned SMAs and continued the move further down breaking through several support levels most prominently the $150. Since then, LTC continued the drop reaching a low of $105. The Bulls simply couldn’t sit idly by and let the instrument move any lower, as LTC found the needed corrective power to rise back higher and is attempting to break above the $130 level.


While the momentum indicators on BTC and ETH are showing more consolidation and a lack of positive propulsion, LTC is showing something a bit different. RSI is actually moving higher in an upward trend, indicating that there’s enough momentum, at this moment, to break above the 50 midline and allow the Bulls to actually regain some important levels. MACD does show the same momentum increase as the MAs are under the midline, in parallel the histogram is showing an increase in the bullish momentum.


(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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