Welcome to our weekly brief. Here you will find an overview of main events and news from last week and expected events for week 02.
Fundamentals and expected events: week 02
Crypto markets: The crypto market had lost around $230 billion in the first week of 2022, falling from $2.25 trillion on December 31, 2021, to $1.9 trillion on January 7, 2022. Bitcoin and Ethereum lost the most capital. Some of the most prominent cryptocurrencies had significant support levels being broken, followed by liquidations dominated by long traders. The latest recovery attempts failed cand at the time of writing cryptomarket is again mostly in red numbers with total market cap falling back under the level of 2 trillion USD. Given the rise of many conventional financial instruments linked to Bitcoin or other cryptocurrencies (ETFs, futures), the correlation of virtual coins with other risk assets is growing and thus the cryptomarkets are following the traditional financial markets.
Stock and commodity markets: Last week was nervous also on the financial markets. Technology stocks were under the most pressure. US Nasdaq wrote off 4.53 % during the week. Oil prices rose sharply on Thursday and Friday after reports emerged that unrest in Kazakhstan disrupted production at the country’s largest oil field. Hawkish comments by US central bank officials drove gold prices to a two-week low last week. However, the Omicron continues to shatter records and spread rapidly across the planet. In this context, investors are seeking refuge in gold. The value of the precious metal rose sharply again.
Important events: We are waiting for speeches from Fed’s Jerome Powell and also from ECB’s Christine Lagarde. The chances of the Fed raising rates in March are already around 80%. Rates are likely to be one of the key issues this week as well, with US inflation results due on Wednesday. Czech unemployment and inflation data will also come out this week. Other important factors will be the development of the situation with Covid-19, or the negotiations between Russia and the US on the situation in Ukraine. Earnings season is also starting slowly, which will bring results from several US banks on Friday. A subsidiary of developer Shimao has defaulted on the principal on its loan. Its credit rating is BB and thus it signals that stress is starting to spread across the development sector. The situation in the property development sector thus remains a significant source of uncertainty.
Cryptomarkets and marketcap: week 02
The total crypto market capitalization reached 1,99 trillion USD.
Bitcoin’s price is currently 40,950 USD.
Crypto Fear and Greed index is 23, extreme fear.
They are playing us nicely… the “weak hands” (traders with weaker nerves) have closed their positions and are waiting. What can I say, “That’s the point!” We’ll see. We hit the last chance box reliably and stayed in it long enough for most traders to lose their nerve. As a rule, there are massive reactions at major supports. There were reactions, but not massive ones, which caused a lot of uncertainty in the market. Fear index almost at maximum. It is very interesting to see how algorithms can work with sentiment. Let’s go to our scenario now. Nothing has changed. This support is key for the small and big fish in the market. Breaking it would require us to dive to $30k for BTC. Both an opportunity and a temporary loss for big holders like Elon Musk. The probability of a drop is less than that we will now head above 45k for BTC. A retest of $41k is still likely before this move. Confirmation of a move to $45k+ will be when the RSI is above 50. The 50EMA is now at $43600 for BTC and is also the first resistance BTC will face, the next is at 45760 and the key $47k for BTC. And it will be decided this week which way we go.
DOGE / USD
Since the Key TL breakout, the price has respected the 50EMA without any breakout attempts. The whole market is waiting for BTC. Even the bullish divergence on the 4H TF did not kick the price to a significant move. Now we have another bullish divergence on 4H TF with much more probability to break. The key RSI TL has already been broken and an upward move is only a matter of time. This week is looking extremely interesting for bigger moves. The first resistance is 0.16 and the second more important for the next bigger move is 0.172. We are 0.8 points away from the next more vague move up on the RSI… Come on DOGE, let’s get this thing going!
ETH / USD
Something is wrong with ETH. All the channels have been breached. Completely new TA created. To illustrate this, today we exceptionally switched to a 3D TF, which shows how ETH is respecting the long term channel that has its start in 2020 on 10/27. This channel shows that there is upward pressure on the price in the long term. The bottom of this channel is at $2200 for ETH, which is very unlikely to be reached. This channel crosses Critical Support in the form of a major trend line, which price has not reached even after this latest correction. The fact that it hasn’t even touched it is a very positive indicator and may indicate where price will be in the next period. A return above the 50 RSI on the 3D TF will be an incredible boost for price. The first very positive indicator will be a break of the main RSI TL. We may not break $2750 per ETH and it will be all about price gains.
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.