Fundamentals and expected events: week 11
Crypto markets: Bitcoin briefly slumped during another turbulent weekend to a weekly low beneath $38,000 but reclaimed all lost ground and returned to a familiar level of around $39,000. It is hovering around that range today too. The altcoins are mostly neutral or in the red today, with a few exceptions, such as PlatonCoin, which is reporting an increase of more tha 10%. Traders will closely watch the European Union’s (EU) vote this Monday on a draft of the proposed Markets in Crypto Assets (MiCA) framework, which could have widespread influence on the market.
Stock and commodity markets: Chinese stocks listed in Hong Kong had their worst day since the global financial crisis. Concerns about the close relationship between Beijing and Russia and rising regulatory risks sparked a panic sell-off. Commodity prices have gone completely crazy, with oil hitting around 135 dollars per barrel (Brent), and gas has also not been idle, with its price briefly hitting around 345 euros per megawatt hour. Such strong energy supply shocks have not been seen in the world economy for a long time. It is the ongoing conflict in Ukraine behind that. Not surprisingly, there is a growth in demand for gold, as well as for other protective assets, such as Swiss franc.
Fundaments and important events: The European economy is going to lag behind American, even if the optimistic scenarios come true, and the war in Ukraine ends soon with a reconciliation. The sanctions against Russia, bringing a forced shift away from Russian energy resources, will bring further huge costs, the refugee wave will require significant financial support, and broken trade ties will be difficult to rebuild.
The price of food wheat on the Paris exchange, which determines the price of wheat and flour in the Czech Republic, rose today to a new historical record, up to CZK 11 580 per tonne (see chart). The average price for the period from the beginning of 1999 to the present day corresponds to around CZK 4 603.
The ECB meeting did not bring a change at the level of interest rates, but at the level of QE, where bankers will move faster in the coming months and the programme is due to end in the third quarter of this year. The inflation figures for February already reflect further increases in the price of electricity and materials in the domestic economy, and this is only just the start of the whole vicious cycle as the producers will have to pass increased costs on to consumers through the prices of their goods. Inflation figures lend credence to the scenario that the CNB will have to react and in its efforts to tame prices – thus tightening its monetary policy again. This week there will be closely followed meeting of the Fed, followed by a speech of ECB’s Christine Lagarde.
Cryptomarkets and marketcap: week 11
BTC / USD
BTC is located right in the middle between the shopping sales area. BTC hasn’t shown much in the last week. But we are approaching a decision point. Overall, TA doesn’t look overly optimistic, but there are a couple of bullish signals. After a retest of the channel that BTC has been in since the second half of this year, BTC immediately moved back into the channel after breaking out, and not just any channel, but with a very convincing candle. After such a candle, it may mean that major investors are starting to average out their purchases. And now there are two possibilities one more fakeout below the channel and back up or straight up to the 42k level where resistance in the form of the 200EMA is already waiting. The buy box still remains at $28-30k for BTC. Either way, we won’t stay in the same spot much longer. We are in the POC and this will soon blow the price into a bigger move.
ETH / USD
ETH fakeout broke the triangle and came back with the same candle as BTC. This says a lot and this consistency can really mean buying from larger investors. Even though we broke out, we are still making higher lows. And that gives us some hope for a move higher. So far, any move up looks more like a correction of a move down. So every single resistance plays a very important role. Every $100 from the $2610 price upwards, ETH will face a resistance. So for ETH to bite through to the upside it will need a big dose of energy. We have broken the local TL and, we are now getting above the RSI 50 and the key will be to break the RSI TL, which we will head towards after breaking $2610. As far as the downside is concerned, every $100 there is support as well as resistance for ETH. We are in a growth channel and the full bottom of the channel is $2290 – $2330 for ETH. A break and subsequent retest would mean looking below $2000 for 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.