Fundamentals and expected events: week 10
Crypto markets: Cryptocurrency markets were hit by a sudden fall over the weekend, with the global market cap dropping 3.80% in just 24 hours. However as of this afternoon, cryptomarkets have rebounded and most are back in green as investors are looking for alternatives to for some already too expensive gold and falling stocks.
Stock and commodity markets: Gold is appreciating due to the increased nervousness of the markets, which has not subsided since Thursday last week, when Russia launched its invasion of Ukraine. Since then, gold has appreciated by around 7 per cent to CZK. Since the beginning of this year, gold has added 15.3 per cent. Gold is also supported by the freezing of the Russian central bank’s reserves. Gold represents the part of Russia’s foreign exchange reserves that the freeze has largely failed to reach. Other precious metals, however, are doing even better. Palladium by nearly 66 per cent, platinum by 23.8 per cent and silver by around 18 per cent. The oil supply disruption has led to the WTI price reaching USD 130 per barrel at the opening of the markets today. This is the highest level since 2008. Rising energy prices are adding to inflationary pressures. This environment continues to create significant volatility in equity markets, which are in a correction zone.
Important events: This week will again be under the sign of high volatility and increased nervousness on the markets. The war in Ukraine is continuing and with it the expansion of sanctions can be expected. The main movement in the markets has been the flight from venture capital to safe havens and this week should be no different. In addition, the economic calendar is very busy this week. It kicked off with Czech wages for 4Q21, which, adjusted for inflation, ended in negative territory by a larger-than-expected 2%. Labour Minister Jurečka said on TV over the weekend that the government will consider capping fuel and energy prices on Wednesday. The main event in the Euro area is Wednesday’s ECB meeting. At the last meeting in February, ECB indicated the first rate hike this year for March. But in the meantime many events unfolded and therefore there are now talks about the use of instruments to maintain financial stability, similar to pandemic PEPP asset purchase programme, a type of “war” asset purchase programme. As for the US, inflation for February will be reported on Thursday. It was expected to rise from 7.5% to 7.9% mainly due to rising energy price pressures. China over the weekend unveiled its official economic growth target for this year at 5.5%, at the upper end of market estimates.
Cryptomarkets and marketcap: week 10
BTC / USD
BTC has reached our “decision” box or very strong resistance around 45k. A rejection of the move to the top of the channel was likely. BTC broke below both the 50 and 200 EMAs on the 4H TF after this bounce. A retest of the lower part of the channel with a bullish divergence on the 4H TF may be an interesting impetus for the price to rise to the top of the channel. i.e. after breaking 45k, it may get to 50k. It must be said that BTC is behaving very weak, which is creating negative sentiment. And it is in such extreme situations that the biggest movements occur. If we now surpass 41k, we have a lot to look forward to. Breaking the $37,500 price level and retesting it will result in testing the 33k price level and if that level is not sustained, up to 26-28k.
ETH / USD
ETH showed a sample fakeout after breaking TL. Rising up to our “Decision” box and after forming a double top on the RSI immediate rejection and price drop. The price went all the way below both the 50 and 200EMA and to the bottom of the channel. ETH is looking tired and a retest of the bottom of the channel is nothing positive. Each bounce with a lower low is getting closer to breaking the bottom. And we really don’t want that because we could get as high as 2187 and possibly 1750 for ETH. But what we do see positively is that a triangle formation is forming at the bottom of the channel. And if there is a move up, it will be a very significant move.
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.