Week 19 – Fundamental and technical analysis

Fundamentals and expected events: week 19

Crypto markets: Bitcoin and the overall crypto market continues to weaken in correlation with declines in technology titles within the major US indices. Sales are driven by persistent concerns about high inflation and looming stagflation, rising dollar rates, and especially disappointing corporate results for some technology sector leaders. There have been warnings of a bubble bursting across the sector, which includes digital currencies. In the digital currencies sector alone, there were several negative news that led, among other things, to a drop in the Fear and Greed index to Extreme Fear at 11 points. Bitcoin marked for the first time in eight years a first time of six consequtive red weekly candles. Total market capitalization dropped below 1.6 trillion USD. Over 69,000 traders saw more than $260 million was liquidated in the past 24 hours.

Stock and commodity markets: US stocks are in the red again. The S&P 500 index notched up its fifth weekly loss in a row, making it the longest losing streak since 2011. European stock markets continued their declines from last week. Inflation concerns and worries about the impact of rate hikes persist. The energy sector is negatively affected by the highly volatile movements in oil prices. Data from China has confirmed the slowdown in the Chinese economy and China is at risk of missing its target for this year. Continued lockdowns of China’s largest ports are not helping the situation either. The euro is weakening again against the dollar. Oil is trading towards USD 110 per barrel Brent. Gold is weakening significantly in correlation to the strengthening dollar.

Fundaments and important events: In the coming week, the main focus will be on inflation data from both the US and China for April, followed by Fed’s May FOMC meeting and a series of Fed statements and US consumer sentiment data. China will release a range of data including trade data, which will be influenced by lockdowns due to COVID-19 disruptions. UK GDP data for March and Eurozone industrial production data are also coming this week. President Zeman will appoint a new CNB governor on Wednesday. Fitch Ratings has downgraded its outlook for the Czech Republic for the first time since November 1998. Analysts are beginning to warn of impending stagflation in the EU.

Tip: What is digital identity and how it will evolve?

Cryptomarkets and marketcap: week 19

BTC / USD

What can we say, BTC is giving us a run for our money… However, there are still most experienced traders who wanted this move. And currently there is massive accumulation of BTC by large investors. Panic?… No way, a real opportunity! Everything you accumulate now will be returned to you ten times or more in 2-5 years. Even averaging the price down is a real win now. BTC was moving along the trend line without much appetite for a breakout and that was the first sign that an exceptional move was coming. Currently, the price has stalled right around the $30k price for BTC and this is the best opportunity to enter at the moment. BTC and alts are on “sale”…!

Now a bounce up to the 39k level is very likely where the decision will be made. The likelihood of going straight to 24k for BTC now is very small.

A well set SL is the key now. We need to break the local key TL first and then up to test 200EMA.

ETH / USD

With ETH, we figured 2700 was an important zone and $2500 was key support. $2500 ETH whizzed through and didn’t even take a breath, stopping at $2300. ETH and BTC are on the same falling wave. The question is whether the wave has already hit and we can bounce. Yes we are ready for a local bounce. ETH unlike BTC is relatively very close below the key zone, so 55EMA will test at 15% upside and 200EMA at 20% upside, which is not that unusual for cryptos. The last time support formed for another move up was 62 days in May. We must now arm ourselves with patience and really average the buy price on the downside. Either there will be one big positive wick today or it will be a really long spring.

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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