Fundamentals and expected events: week 13
Crypto markets: There is a strong recovery in most major crypto assets, which is a very positive sign in the face of rising interest rates and global geopolitical uncertainty – both of which usually send investors away from risk assets and towards safe havens. As increasing interest rates can result in capital being siphoned out of markets, the fact that we are seeing strong performance from crypto assets despite this is evidence that investors believe in the positive development of cryptocurrencies based on their inherent strengths. The crypto Fear and greed index also reached greed field again with values over 60 points.
Stock and commodity markets: Financial markets entered the new week on a quite optimistic note, although Asian stock indices are again under selling pressure when Shanghai was thrown into lockdown due to the spreading covid-19. However, during the European session, an uptrend had already started to assert itself on equity indices, while commodity prices generally (with the exception of gas) declined. The markets are still under the influence of the geopolitical situation in Ukraine. Energy prices are extremely high and growing again, which in turn has influenced the political decisions of many world leaders. This is most likely the beginning of a change in the global economic and political cycle, which could reciprocally lead to substantial changes on the stock and commodity markets.
Fundaments and important events: This week the markets will be waiting for macroeconomic data from the United States, mainly unemployment and consumer inflation. Inflation should be also reported from EU. The CNB meets on Thursday. Markets expect a 50bp increase in interest rates to 5%. This is due to the inflationary pressures.
Cryptomarkets and marketcap: week 13
BTC / USD
Such market behaviour is a bit for the strong natured investors. I encourage everyone to read our previous analyses to get a feel for what is really going on in the market. Our scenario came to fruition almost without fail. The only thing missing now is the $50k threshold. We are currently ahead of all resistance. We are above both 50 and 200EMA. The 1H TF is already starting to show that the market is overbought and the first signs of a correction are already appearing. The bearish divergence on the 1H has already triggered a mild correction. And how far will we go in this correction? At least three waves to the downside, which could correspond to $45850. But this won’t be enough for a significant correction. Until today, short positions have been pushing the price up, and they have been predominant. For a more significant correction, longs need to start outweighing shorts to build liquidity. We can see that a bearish divergence on the 4H TF could be a good start. The $40516 per BTC is now key support for further upside movement. We don’t want to see BTC even one dollar below this price. The top of the channel is now at $51200. In the event of an upward move, the next move will be decided here, but the RSI needs to reset to the RSI 40-50 level.
ETH / USD
ETH has been slightly more tepid than BTC, but ETH still blew through the Decision Box. The market is very overbought, the RSI is at 80. It also needs a correction. The $3050-3140 boundary is now key for further upside. We shouldn’t close below $2800 on this correction so we can soon look higher to the middle part of the channel around the $3800 price and then higher to $5200 where we hit the top of the channel. The way ETH is behaving now, the upper channel is a long way off and the scenario for a bigger correction to $2800 is in the air. The middle part of the channel around $3800 after a market reset and a slight correction is still very likely. $2831 is now key support and we should not close a dollar below this price.
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.