Week 15 – Fundamental and technical analysis

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Fundamentals and expected events: week 15

Crypto markets: The global cryptocurrency market cap has tumbled below $2 trillion yet again, as Bitcoin, Ethereum, and other assets retraced and in the following latest selloff, the global crypto market cap dropped to around $1.97 trillion. One of the main reasons of the recent drop is the crypto markets close correlation with stock markets. Other factors remain in the macro field, starting with new lockdowns in Asia due to increased numbers of coronavirus cases, the Federal Reserve’s end of QA programme, ECB and other central banks interest rate hikes, and soaring commodity prices due to Russia’s attack on Ukraine.

Stock and commodity markets: Most indices are now in the red numbers. Result season for the Q1 is starting. The EU approved further sanctions against Russia, including a ban on coal imports from August 2022. Annual coal contracts rose 6% and electricity rose 1% in response on Friday. On the other hand, oil prices are falling down due to lockdowns in China. Even if the lockdown in Shanghai ends, half a million barrels a day of oil demand will continue to be threatened by new restrictions in other parts of the country, Bloomberg reports. Gold in March, as investors sought a hedge against inflation and political turmoil, climbed above $2,000 a troy ounce and is still rising.

Fundaments and important events: The global economy is still under extreme pressure after two years of pandemic closures and restrictions, followed by the Russia-Ukraine war and economic sanctions against Russia, which is further complicating the road to recovery. Annual consumer price inflation in the Czech economy accelerated further in March and at 12.7% was the highest level since May 1998. FED also announced that february’s consumer price inflation (CPI) report of 7.9% was the largest annual increase in 40 years so far. The ECB will hold a meeting this Thursday, and a rate hike can´t be ruled out. Furthermore, the ECB decided to end QE early (in 3Q). There will be further macro data about inflation and unemployment from other countries.

Tip: Inflation and how to protect your savings. 

Cryptomarkets and marketcap: week 15

BTC / USD

After several retests of $45850, BTC failed to hold this important support, and so came the slide down to the $41k BTC level. BTC stopped right in our buy box at the bottom of the channel. The majority of traders are expecting a retest to the 40k level, which may not necessarily happen as BTC is already forming a bullish divergence on the vast majority of TFs. A bounce off the bottom of the channel is very likely. This entire channel can also be viewed as a bearish flag with a target price of $16k. We now see this scenario as less likely. The greater probability is that BTC will test the $45800 level now as resistance and if it breaks it will start a proper run as the key TL will be broken at the same time.

TA BTC

ETH / USD

Just as ETH poured us a bit of optimism at first glance last week, this week it’s the exact opposite. However, this is due to the way ETH held its price before the plunge, so it may not mean anything. The bullish divergence on the 4H TF suggests to us that a bounce is imminent. This deeper drop in ETH below important supports could be more accurately called a fakeout. The 0.5 Fib also suggests to us a bounce. And where could we get to with this bounce? The $3310 is the first significant resistance. To the downside, critical support is at $2800, a break of this support would mean a further drop to $2500.
TA ETH

Disclaimer: This is not an offer for concluding a contract. Trading cryptocurrencies is a highly risky business and as such you are the only person bearing the risk and responsible for your own decisions. Do not engage in trading unless you do your own research and are fully knowledgeable of the risks.

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