Cryptocurrencies Market Update ➡️ Solid ECN

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ETHEREUM​

ETHEREUM price fell over 6.0% on Friday and broke below psychological support at $1600, which coincides with 38.2% Fibonacci retracement of the upward wave started in June 2022. Currently buyers attempt to halt declines around local support at $1550, which is marked with previous price reactions. However, should break lower occur. sell-off may deepen towards recent lows at $1460.

 

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BTCUSD: probable bankruptcy of Silvergate Bank – the driver of the decline in crypto assets

According to most experts, the pressure on the digital assets sector was exerted by reports of the probable bankruptcy of Silvergate Bank, which actively worked with cryptocurrency firms. Last Friday, representatives of the main company Silvergate Capital Corp. announced the delay in the publication of the annual financial report for the U.S. Securities and Exchange Commission (SEC). It was also stated that the reasons for extending the audit were, in particular, accounting for losses on bonds issued at the beginning of this year. These statements aroused suspicions in the cryptocurrency community that due to a number of negative events in the market, Silvergate's capitalization could have suffered greatly, and the bank is now financially insolvent. Against this background, many digital companies hastened to distance themselves from Silvergate, stating a minimal degree of cooperation or even a break in relations. This was done, for example, by Coinbase, Paxos, Galaxy Digital, Bitstamp, Bakkt, Gemini, Tether and a number of other companies.

New financial problems of a large company associated with the cryptocurrency sector increase investors' distrust of the industry and cause a decline in prices. In addition, monetary factors may exert additional pressure on the market this week. Thus, the head of the US Fed Jerome Powell will address Congress with a semi-annual report on the activities of the regulator, and February employment data will also be published. In the event that they turn out to be strong again, officials get another argument in favor of extending the cycle of interest rate increases.

Technically, the price is trying to resume serious growth, but for this the quotes will need to break above the resistance zone of 23000.00-23500.00 (Fibo retracement 23.6%, the middle line of the Bollinger Bands, the Murray level [7/8]). In this case, the growth targets will be 25000.00 (Murray level [8/8]) and 26562.50 (Murray level [+1/8]). The key for the "bears" is the level of 21875.00 (Murray level [6/8]), with its breakdown, the decline will continue to the level of 20312.50 (the Murray level [5/8]).

Resistance levels: 23500, 25000, 26562.5 | Support levels: 21875, 20312.5​

 

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Bitcoin​

CPI inflation data from the United States for February was released today at 12:30 pm GMT and came in-line with market expectations. Headline CPI decelerated from 6.4 to 6.0% YoY (exp. 6.0% YoY) while core gauge moved from 5.6 to 5.5% YoY (exp. 5.5% YoY). Reaction of the FX and equity markets was fairly muted - after initial volatile up and down swings, indices moved slightly higher and USD weakened. However, scale of the moves on USD and stock markets is relatively small. Much more action can be seen on the cryptocurrency market with Bitcoin testing $26,000 mark following the release.

Taking a look at BITCOIN chart at D1 interval, we can see that the cryptocurrency is trading higher for the third day in a row and, just as it was the case yesterday and on Sunday, the move is quite big. Bitcoin trades almost 9% higher on the day and makes a break above $26,000 mark for the first time in 9 months! Other cryptocurrencies are also trading higher with Ethereum adding 5% and Dogecoin trading over 4% higher.​

 

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BTC​

• Weaker sentiment on stock exchanges did not prevent cryptocurrencies from rising​
• The correlation of the price of BTC with the major indices has dropped noticeably recently​
• Bitcoin price is approaching overbought levels and 61.8 Fibonacci retracement​

The recent weakness of banks has caused capital to flow into cryptocurrencies for two reasons. The main beneficiary of the rally - decentralized Bitcoin - is not directly dependent on the centralized financial sector. Second, in the face of escalating bank problems, the chances of a Federal Reserve pivot have increased. Since the collapse of SVB, the Fed has already hinted twice at supporting market liquidity, which investors have taken as a positive prognosticator. It's still unpredictable which way the crisis will unfold but its hold on UBS's takeover of Credit Suisse coupled with a potentially dovish Fed could provide a catalyst for upside for risk assets.

On Wednesday at 8 pm GMT, markets will see if indeed Jerome Powell will be willing to go easy on Wall Street and change to a more dovish stance. If investors sense that the Fed is softening under the pressure of systemic concerns, the rally in cryptocurrencies is likely to be prolonged. At the same time, it is difficult to imagine the price of BTC continuing to rise if the scale of the current crisis were to increase significantly.

The price drop following the collapse of the SVB bank did not last long. Bitcoin surprised the markets and has since risen nearly 30%.

The largest of the cryptocurrencies has had one of its best weeks in the past few years, with the price rising more than 20%

The inverted head-and-shoulders formation pattern may herald bullish attempt to btrak the main psychological resistance level of $30,000.

Markets see more than 43% chance that the Federal Reserve will not raise interest rates on Wednesday. Just two weeks ago, the markets saw a 50bp hike as a chance. That's a drastic change.

The amount of stored BTC in the so-called 'cold wallets' of the largest BTC holders of so-called whales (above 1,000 BTC) is at levels last seen in mid-2020. This may indicate that if the BTC price maintains momentum, the amount of BTC in whale portfolios will increase again. For the moment, however, the amount of cryptocurrency in the whales' wallets continues to fall, which could indicate their sending BTC to exchanges and continued risk aversion among the largest holders. A change in this trend would be a sign of the growing strength of the largest of cryptocurrencies.

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Bitcoin, D1 interval. The price has approached $28,700, which coincides with the 61.8 Fibonacci abolition of the upward wave initiated in the spring of 2020. The RSI indicator indicates an overbought level signaling a possible correction.​

 

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BTC​

The largest cryptocurrency has fallen below $28,000 on a wave of general risk asset aversion on exchanges and news from the Binance exchange. Ethereum and smaller projects are also losing ground. The downward movement accelerated after the largest cryptocurrency exchange announced that it had temporarily halted spot cryptocurrency trading on the platform, for as yet unexplained technical reasons.

Bitcoin, H1 interval. The price has failed to overcome the $28 800 level and has formed a bearish double peak formation. The potential scope of the correction may stop at the SMA200 (red line) or at the level of the 23.6 Fibonacci retracement of the upward wave initiated on 10 March, i.e. at the level of $26 700, which also coincides with the decline after the Fed decision. A potential retracement deeper could foreshadow that sellers would want to test the 38.2 Fibo retracement at $24,000.

Ethereum, H1 interval. In the event of a deepening correction on Ethereum, key support is located in the region of $1710 -$1694.​

 

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Binance sued by CFTC - Crypto in retreat​

US regulator CFTC is suing cryptocurrency exchange Binance and its founder Changpeng Zhao due to issues related to violation of trading rules and derivatives. The news triggered a sharp sell-off of Binancecoin. Bitcoin also took a hit and dropped below the 28,000 mark. Nevertheless, at the moment Binancecoin is losing less than 2%.

 

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Ripple​

Cryptocurrencies are rebounding today despite the still-uncertain news about the conflict between the CFTC and the Binance exchange. Among all the projects, Ripple (XRP) stands out again. Fintech company Ripple will hold a closed-door consultation with the Securities and Exchange Commission (SEC) on March 30. The market took the news of the warring parties meeting in court as a signal of a potential settlement. Bringing it about would be a victory for the entire decentralized finance sector in the States. It would undermine the SEC's decision-making role and reduce the fear of the prospect of restrictions proposed by Gary Gensler.​

• Ripple is cited by many analysts as one of the future foundations of a digital financial infrastructure based on blockchain technology. For example, recently Ripple's blockchain was able to process a $755 million transaction, in 4 seconds, for a fee of tenths of a dollar (0.01 XRP). By the crypto market, the company is seen as a major competitor to the interbank market, which charges high commissions for processing international transfers;​
• Iron Key Capital analysts point to Ripple as a winner in the multi-billion dollar global payments market. In addition to Ripple itself, cryptocurrencies Stellar and Algorand are also gaining today. Both of them, along with Ripple, have been pointed out as being integrated into the new ISO20022 international settlement standard. This system will replace the SWIFT standard in the coming years. Ripple's victory with the SEC is expected by Ark Invest fund manager CathieWood, among others;​
• The next few weeks may bring a 'rally under the event' in the price of Ripple tokens. A similar course of events is characteristic of the crypto market at the same time as it often ends in a sell-off (profit realization, so-called 'fact selling', as the decisive moment is very close. This was the case, among others, with the price of Cardano, which implemented smart contract technology in September 2021, and Ethereum Merge, in the summer of 2022.​

The largest holders of Ripple so called 'whales' have increased their buying activity in view of the upcoming SEC decision.

Ripple chart, D1 interval. The price has overcome the key resistance near $0.55, set by previous price reactions. The chart, which resembles a technical saucer formation, may indicate a more permanent reversal of the downward trend.​

 

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Cardano​

• Bitcoin stays above $28,000, smaller projects record increases​
• Among altcoins, Cardano records record highs​
• Growth is fueled by the prospect of Cardano's integration with the Ethereum Virtual Machine​

The Ethereum Virtual Machine is a place for developers to build decentralized applications. The new feature is expected to allow Ethereum developers to create projects on the Cardano network using the Solidity coding language used on Ethereum Solidity. Without installing new tools or learning another programming language.Thanks to a new feature provided by Milkomeda, Cardano holders may soon be able to access Ethereum Virtual Machine (EVM), directly from their digital wallets. Investors positively welcomed the information about the potential expansion of the Cardano blockchain utility. This information was confirmed yesterday by Sebastien Guillemot, CEO of Milkomeda. Additional features are expected to include rewards for so-called staking and the construction of smart contracts on the Ethereum decentralized system (EVM). According to Guillemot, rewards for staking from Cardano's digital products built on Milkomeda will be automatically paid, every 5 days.

Cardano chart, D1 interval. The price has overcome short-term resistances approaching a test of the local peaks of mid-February 2023, at $0.42. The SMA100 average (black) is wrapping upwards and if the bulls maintain momentum it will be possible to cross the SMA200 from below, called in AT a bullish 'golden cross' formation. The formation could signal a change in trend. However, if resistance holds back the bulls the first important support should be sought at $0.35, which is set by the SMA200.​

 

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Dogecoin - Chart of the Day​

Dogecoin saw massive moves yesterday in the evening, with the coin rallying around 30% in less than 2 hours. While other cryptocurrencies also saw some gains, none experienced as big a jump as Dogecoin. It should not come as a surprise as a trigger for the move higher was Dogecoin-specific. Elon Musk changed Twitter's logo to Shiba Inu dog, a 'logo' of Dogecoin and its supporters. The move triggered an instant rally in Dogecoin, sending it to the levels not seen since early-December 2022. Musk himself explained that he is simply delivering onto promise he made in a tweet some time ago that he will buy Twitter and change its logo to Dogecoin logo.

Taking a look at the Dogecoin chart at the D1 interval, we can see that the strong upward move launched yesterday in the evening is continuing today. While price erased some of initial gains yesterday, Dogecoin bulls regained ground today and are pushing the coin towards the 0.10 area. A point to note is that the price of cryptocurrency managed to break above a mid-term support zone in the 0.0890 area, marked with previous price reactions as well as the downward trendline. A break above this area brightened technical outlook for the bulls and a test of the resistance zone ranging below 0.11 handle cannot be ruled out in the coming days.​

 

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DOGECOIN​

• Wall Street finished yesterday's trading higher as market odds for Fed rate hike in May dropped following another streak of disappointing data from US jobs market​
• Market now sees around 50% chance of 25 bp rate hike in May and around 50% chance of Fed leaving rate unchanged and pausing rate hike cycle​
• S&P 500 gained 0.36%, Dow Jones traded flat, Nasdaq rallied 0.76% and Russell 2000 moved 0.13% higher​
• Indices from Asia-Pacific traded higher today - Nikkei gained 0.1%, Kospi added 1.3% and indices from China traded up to 0.8% higher​
• Liquidity during today's European trading session is expected to be very thin as majority of stock exchanges from the Old Continent will be shut in observance of Good Friday​
• Japanese household spending increased 1.6% YoY in February (exp. 4.2% YoY)​
• Major cryptocurrencies trade mixed - Bitcoin drops 0.1%, Litecoin gains 0.1%, Ethereum trades 0.3% higher and Dogecoin slumps 2.8%​
• AUD and NZD are the best performing major currencies while JPY and CAD lag the most​

DOGECOIN is one of the worst performing cryptocurrencies today. The coin has almost fully erased the price jump triggered by Elon Musk changing Twitter logo to Shiba Inu.​

 

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Ethereum​

Sentiment in the cryptocurrency market remains mixed, with major projects moving in a sideways trend. Investors are concerned that Ethereum's correction after the Shapella upgrade will result in more sell-offs.

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What after the Shapella Upgrade?​

• Since December 2020, investors have been able to deposit their ETH on the Ethereum Beacon chain and receive blockchain rewards and profits. However, they couldn't withdraw those funds until the recent upgrade. So far, the declines after the Shapella are relatively small;​
• Before the update, all staked ETH was worth nearly $32 billion (about 15% of supply). According to K33 Research, even with small withdrawals, about $2.4 billion in ETH could hit the market as investors will want to withdraw some funds from the Beacon chain. With crypto market liquidity drying up, this could trigger a deeper correction;​
• On the other hand, Bernstein Fund analysts pointed out that of the 18 million ETH staked, nearly 70% were locked into liquidity protocols, allowing investors to de facto trade funds through decentralized Lido-type protocols, which will take off much of the downward pressure.​
• According to analysts, the 30% of investors who deposited ETH in the Beacon chain without using liquidity protocols are likely to have the highest level of conviction and will not be willing to sell. It is also worth noting that the seamless ability to deposit and withdraw ETH may encourage more investors to staking and drive capital flowing into the chain;​
• Passive ETH returns of 5 or 6% per year are no longer as attractive compared to the 0 interest rate period, when investors could not count on comparable yields from regulated fixed income assets. In addition, staking is to some extent subject to risks associated with crypto market regulation. Rewards for ETH staking will decline as the number of stakers increases.​

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News​

1. According to the Block 'open interest' report, the ETH options market (call options vs. put options) before the update showed the highest level since May signaling possible downward pressure​
2. The U.S. Treasury Department has indicated that the decentralized asset market poses a threat to national security.​
3. Divly revealed a report according to which only 1.62% of US cryptocurrency holders paid tax on their investments. The report is disputed by tax law specialists;​
4. According to Bloomberg, Singaupur's central bank is working to unify cryptocurrency-friendly regulations​
5. According to a survey by CoinGecko and Blockchain Research, 75% of cryptocurrency investors hold NFTs​

Ethereum chart, H4 interval. Looking at the chart, we can see that the price reached before the Shapell update was roughly similar to the peak of the price rally before the Ethereum Merge. If the declines accelerate the key for the price could be the demand reaction around $1700 zone, where we can see SMA200 (red line), 23.6 Fibonacci retracement of the upward wave started last June and previous important price reactions.​

 

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Bitcoin Jumps above $30,000​

Sentiment towards cryptocurrencies following Easter holidays is positive with major coins as well as smaller altcoins trading higher. Bitcoin is drawing a lot of attention today as the coin is testing a psychological $30,000 area and is trading at the highest level since early-June 2022. Bitcoin has already gained more than 90% off the early-November 2022 low. A near-term level to watch is the resistance zone ranging below $31,500, which marked the upper limit of a short-term trading range in May-June 2022.

BITCOIN trades above $30,000 for the first time since June 2022.​

 

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Ethereum​

Ethereum gains after US lower PPI reading and finished Shanghai update​

• Risky assets 'anti-dollar' on wave of weak dollar, after lower than expected PPI inflation reading from US​
• The highly anticipated Shanghai Hard Fork did not cause Ethereum's declines​
• Vitalik Buterin, the Ethereum founder, indicated that after the Shanghai update, the project has already passed the main milestones necessary for further development​
• The second largest cryptocurrency, Ethereum soared above key resistance on a wave of rising risk sentiment. The headline PPI inflation reading from the U.S. came in well below expectations, coming in at 2.7% versus 3% forecast and 4.6% previously. The data supported sentiment among risk assets and increased the chances of no Fed rate hike in May. Along with the cryptocurrency market, Wall Street index futures also gained today.​

The Ethereum Shanghai modification introduced yesterday, contrary to the predictions of many analysts including JP Morgan, did not cause a cascading sell-off and rapid withdrawals of Ethereum from the Beacon chain. In the face of a definite increase in risk sentiment, the market did not see the Ethereum fork as a 'catalyst' for profit realization. The modification has ensured that investors will get the opportunity to 'staking' Ethereum smoothly, without having to lock up their funds on the network for years to come. By many analysts, Ethereum is pointed out as the main candidate to 'dethrone' Bitcoin in the next few years, mainly because of its technological superiority and utility functions. Among other things, decentralized applications and smart contracts are built on the ETH blockchain.

Looking at the chart of ETHEREUM, on the H4 interval, we see that Ethereum has reached the euphoria peak of the summer of 2022. On March 13, the price broke above the SMA200 (red line) signaling a further bullish trend. Since the beginning of the year, the price of ETH has risen nearly 67% against Bitcoin's 82% rise.​

 

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DOGECOIN​

Elon Musk has told Morgan Stanley analysts that he wants to make Twitter the world's largest financial institution. Although the process is a long way off and its finale uncertain, Twitter announced yesterday that it will indirectly make stock and cryptocurrency trading available to users. The beneficiary of this news was Dogecoin, a cryptocurrency associated with Elon Musk and Twitter. The likeness of a dog that is the symbol of Dogecoin, recently at the initiative of Musk himself, momentarily changed the well-known Twitter logo.

The platform is set to begin a partnership with eToro and will start sharing price information from TradingView. Musk noted that almost all of the companies that have left the platform in recent months have already returned to it although Stellaantis and Volkswagen are still dangling. Ultimately, Twitter is expected to offer investors a range of functions through travel arrangements to financial services. In China, for example, payments giant Tencent offers payments through its WeChat messaging app. Cryptocurrency investors are hoping that Dogecoin will find its unique place on Musk's platform. The market is anticipating the next move from Musk, and any news of a possible promotion of Dogecoin payments on Twitter could result in a euphoric bump.​

 

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Bitcoin Dips Below $30K​

On Wednesday in morning trading hours Bitcoin and other cryptocurrencies plummeted below significant levels. Despite a strong decline in prices no fundamental information was released to the public. Drop occurred in 20 minutes and led to the liquidation of over $25 million worth of BTC futures long positions.

BTC fell below $30k level and ETH back below $2000. Long squeeze may be caused by investors digesting Gary Gensler Congressional Hearing, which took place yesterday.

BTC dips and is trading near support level marked with green zone. On MACD indicator a bearish divergence occurred which suggest that bullish momentum is weakening.​

 

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Bitcoin​

The major cryptocurrency has once again been pushed off the $30,000 level signaling a possible backdrop for a larger correction of the huge upward movement. Should the declines deepen, the 23.6 Fibonacci retracement of the upward wave, which began in November 2022, at $27,400, and the SMA100 (black line), which may overlap with the 38.2 Fibo at the psychological zone of $25,000, may prove to be important levels.

 

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Bitcoin​

Cryptocurrencies are losing ground against higher chances of a Fed rate hike, a stronger dollar, and regulatory risk.​

• Stronger-than-expected PMI indices in the US have increased the chances of a 25 basis point increase in Fed rates in May.​
• The stronger dollar has driven down risky assets, including Bitcoin, and weakened bullish sentiment in gold.​
• Coinbase CEO Brian Armstrong has indicated that the company may leave the US, which has raised concerns about the shrinking global crypto market.​

Bitcoin has lost for the third day in a row. According to Coinglas data, leveraged positions worth nearly $160 million were liquidated in the past day, of which 80% were bullish bets. The value of liquidated positions on cryptocurrency derivatives this week has already exceeded $400 million. Data from Santiment shows that the number of leveraged positions in the crypto market has increased with the rising price of Bitcoin, driving optimism, but ultimately leading to a reversal in sentiment and a sharp correction. Other altcoins, including Ethereum, Ripple, and Litecoin, are also falling along with the largest cap BTC.

Higher-than-expected PMI readings in the US have increased the likelihood of another Fed rate hike, which the market currently values at nearly 90% probability. Hawkish statements by Fed members have also contributed to this increase. Gold, which was correlated with Bitcoin during the banking crisis, has also come under pressure. Due to regulatory uncertainty, the market may once again pay attention to the associated risks. Some US investors and traders may leave the decentralized market for safety reasons if Coinbase, the largest crypto exchange in the US, closes its operations in the country.

The Bitcoin chart, on an H1 interval, shows that bulls are struggling to defend the $28,000 level, and a drop below the 23.6% Fibonacci retracement of the uptrend that began in early March suggests that the next significant support level may only be at $26,700, where we see a 38.2% Fibonacci retracement.​

 

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BTC​

Recently, many events have overlapped and influenced the prevailing sentiment on the cryptocurrency market.

On the one hand, we observe weakening bulls on the broader financial market after high index results in the first quarter of this year. Investors are trying to price in new quarterly reports published by the largest technology companies in the US and deteriorating macroeconomic data, which are starting to forecast the upcoming recession on the financial markets.

On the other hand, a lot has happened in the crypto market space. The recent hearing of SEC chairman Gary Gancler did not bring any new news. The SEC chairman continued his narrative without any explanation that all cryptocurrencies except BTC should be considered security - despite many questions from Congress Representatives.

Another wave of declines came today after the news about Coinbase suing the SEC. According to the information provided, Coinbase has taken legal action in a US federal court to force the country's securities regulator to give a definitive response to a petition it submitted in July. The petition sought clearer regulatory guidelines for the cryptocurrency industry in the US.

On the 4-hour timeframe, the BTC price continued to consolidate below $28,000, with the largest cryptocurrency by market capitalization trading at around $27,240, down 0.55% in the past 24 hours. BTC has already dropped by 13% from its recent highs of $31000. The price broke through the key support level around $28,600, indicating a bearish trend in the short term. Currently, the price is at the equilibrium level of the last consolidation range, indicating that the market is in a state of indecision. However, further price action downwards is expected, with the next resistance level likely to be at $26,650. This level acted as a support in the past. Overall, the short-term trend for Bitcoin appears bearish and traders should exercise caution when taking long positions. It is essential to keep an eye on any major news events or developments in the cryptocurrency space that may impact the price of Bitcoin.​

 

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Bitcoin

Bitcoin chart, D1 interval and US500 (yellow chart). Bitcoin again showed a negative correlation with the S&P500 and started an upward movement when US500 contracts weakened, influenced by weakness in the banking sector. The RSI indicator is still at relatively neutral levels indicating that the bulls still have plenty of room to possibly continue their attack. The first significant resistance level appears to be around $30,000 - $31,000, last seen in early summer 2022. The bulls has defended the bullish momentum at 23,6 Fibonacci retracement.

 

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Bitcoin Weaker Ahead of Options Expiring Friday​

Bearish pressure on Bitcoin is increasing as Friday's option expiration approaches. The bears could cause the price to settle below $27,000 allowing options market speculators betting on declines to cash in on record profits. Bitcoin has been pushed below $30,000 several times in April and today the cryptocurrencies are recording another weak day:​

• In addition to the uncertainty surrounding the BTC network's technical problems (soaring fees and tens of thousands of outstanding transactions), sentiment also weakened after still unconfirmed reports of a BTC sale by the US, which holds significant reserves of seized BTC from SilkRoad;​
• Investors are assessing the impact of a potential economic slowdown and Fed policy on cryptocurrencies. Today's claims came in stronger than expected, showing a strong U.S. labor market. This one may cause the Federal Reserve to stay on a hawkish track longer which does not seem positive for risky assets;​
• The call to put ratio (the ratio between call and put options) at 1.65 shows a lack of balance between bulls and bears. There is $560 million in call options and $340 million in put options. Bullish options have been by far the more popular in recent weeks, but in the end it is the supply side that gets the upper hand​
• It is now in the sellers' interest to get the lowest possible price before the options expire tomorrow. A drop below $27,000 could bring the bears as much as $230 million in profits, if the bulls manage to maintain the current level sellers will earn about $120 million according to Coinglass estimates.​

Bitcoin chart, H1 interval. The price has fallen below the SMA100, SMA200 and the 23.6 Fibonacci retracement of the March 10 upward wave, making it likely that demand will only be more active at the 38.2 Fibo level, near $26,650.​