The cryptocurrency market underwent further consolidation over the past week. Bitcoin operated primarily in the $30-35k range, dipping below $30k on June 22, 2021. Having previously formed a bearish engulfing candle on the weekly chart, it was expected that the digital asset would dip down to further levels below 35k. It did so, yet the price remained above the critical support at $30k and finished strongly with a Sunday night rally from $32.5k to about $35k by the close of the week, consequently forming a double bottom pattern on the daily chart.
Stellar (XLM) formed a similar daily pattern to Bitcoin, with a double bottom formation signalling a potential reversal. It has held above a strong support at $0.237, which also represents the 78.6% Fibonacci retracement level based on its rise beginning in November 2020. Yet, breaking and holding above the resistance level at $0.273 is necessary for its continued rise, while a drop below $0.237 signals further movement to the downside.
Kusama (KSM) has also seemingly settled above the $160-170 support zone. Having reached lows of $151, reflecting the 78.6% Fibonacci retracement level from its November 2020 rise, it formed a Dragonfly Doji candle on the daily chart on June 26, 2021, followed by a green bullish candle the following day. Yet, for the uptrend to continue, it needs to break above the $200-215 resistance zone, since it is currently trading in the $175-195 range. However, a daily close below $170 would indicate further bearish movement for Kusama, a scenario which bulls would want to avert after its previous drop from $540 to $161 between June 10 and June 22, 2021.
Shiba Inu (SHIB) has maintained its state of consolidation over the past five weeks. Having reached a high of over $0.000035 on May 10, 2021, it underwent a large correction of over 80% and has since remained in the $0.0000055-0.000012 range. Currently trading at $0.0000080, it would seek to break through resistances at $0.0000090 and $0.0000100 to confirm a bullish pattern. A pattern break down below the $0.0000050 level could signal further movement to the downside.
(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.)
