The entire market is in an upheaval. Cryptocurrencies have suffered major losses, and we’re not just talking about Bitcoin here, but there are other currencies, such as Ethereum, Litecoin, Ripple, Dogecoin, and many others. All of this can be attributed to what Elon Musk has been doing and saying causing major turmoil in the markets.
Bitcoin has had one major bearish week. The major break started when the instrument broke below the $53,000 support level. The instrument began a major move to the downside that saw it lose all the gains that it managed to get back when Tesla announced it would be buying $1.5 billion worth of BTC and add them to its balance sheet. Overall, BTC has lost almost 50% falling from $60,000 as high and reaching the low of $30,000.
That being said, the instrument has started to show some bullish momentum appearing as per the RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence). The RSI has managed to kick off the oversold territory below the 30-level and seems to be on an upward trajectory to reclaim the midline as it prints around the 40 level. If the Bulls wish to regain their control of the market, a clear break above the 60 level on the RSI is needed to cement the Bulls’ strength.
As we mentioned, Bitcoin wasn’t the only coin that suffered huge losses. Ethereum was experiencing its own negative structure as the instrument found itself falling below all SMAs (Simple Moving Averages) reaching the low of $1,900 before finding enough bullish momentum to move back higher. In fact, the drop caused Ethereum to wipe out almost 56.67% of its value (from the highs of $4,385 to lows of $1,900).
However, ETH has been able to rise back above $2,650 (as of this writing) but faces against the $2,750 resistance level. In order for the bullish momentum to regain any kind of strength, the instrument must be able to breach the 200-SMA on the 4-hour chart. Looking at the RSI and MACD, one can notice that the bearish momentum is in full swing. The RSI is printing below the 30 and 40 levels which indicates massive bearish pressure, while the MACD is showing some of the momentum decreasing as per the histogram.
Litecoin finds itself in the same box as Ethereum and Bitcoin as the negative pressure continues to reach into all aspects of the crypto market. Within 9 days between May 10th and May 19th, the instrument lost over 64% of its value, diving from $414 all the way to $146. However, unlike the previous two instruments, Litecoin doesn’t seem to be generating enough bullish momentum to say that it’s recovering. LTC is currently trading around $208, which isn’t all that higher from the low we just mentioned.
The technical indicators seem to support that hypothesis. RSI shows just how deeply rooted the bearish pressure is, while it has managed to shrug off the oversold status, but it has done so just barely. The instrument might be poised for more downside, however the MACD is showing some saving grace. The histogram is showing that the momentum might be decreasing with how it moves back towards the midline. However, don’t be driven by that as the MAs are still well below the midline showing that the momentum is clearly 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.)