Week 21 – Fundamental and technical analysis

week 21

Fundamentals and expected events: week 21

Crypto markets: Fear has returned to the crypto markets as the Fear and Greed index dropped down to level 10, meaning extreme fear. The crypto-ecosystem as a whole has taken a dive following not only the macroeconomic data and also an upcoming correction on from the “free money” era of COVID spending but also due to the TerraUSD and Luna series of events, beginning on May 8th, when these stable coins lost their stability. However today it seems that Bitcoin finally initiated an impressive leg up and jumped above $30,000. Most altcoins are also well in the green.

Stock and commodity markets: The broader traditional financial system was also under pressure. The prestigious DJIA index has failed to improve for eight weeks in a row, something it hasn’t seen since 1923. The broader S&P 500 index is experiencing a situation not seen since 2001, in fact since the dot-com bubble burst. Indeed, the index has fallen for the seventh week in a row, something it has only seen twice since 1980. Moreover, during Friday’s session, it had already begun to enter a bear market, falling by more than 20% from its highs. By the end of last week, the US dollar posted its first decline in 7 weeks.

Fundaments and important events: World Economic Forum (WEF) will be the main event this week, apart from Wednesday’s minutes from the last Fed meeting (FOMC minutes). WEF will take place in Switzerland after covid break and comments from leading businessmen, politicians and central bankers on the economic outlook and, consequently, on interest rates are expected. There will also be continued macro data and a few more interesting companies reporting earnings this week, again mainly from the retail sector.

Tip: Stagflation – what it is and how to protect your assets

Cryptomarkets and marketcap: week 21

BTC / USD

The overall view of BTC remains unchanged since the last analysis. BTC has opened the door for further upward movement. A breakout from the RSI key trend line showed us a possible long entry early on. Still, SL is a must. If we break 31k now and stay above this price, we are looking at a move to the 200EMA around $34k for BTC, where we will decide which way to go next. The next stop will then be around the $40k per BTC price. The road to the downside remains open. $14,500 is the very bottom we could reach after the bear flag is realized. But it is more than unlikely. But the price threshold that still remains open is $23-24k for BTC. But it is not necessary to price to 23k to start a significant move up. For now, all we need is a local TL to keep us on price and RSI. We are ready for the next move up. Now it just depends on whether the market makers will try to check the “weak hands” as they say, out of the game with another drop to 24k.
TA BTC

ETH / USD

At ETH everything is very similar. The breakout of both price and RSI TL points to ETH’s appetite to head higher. ETH is currently above the 50EMA. The 50EMA is gradually reversing direction from down to up. Timing the entire market is a must. In the last few days we could see that not all major coins moved synergistically, but that could change now. The price pressure has been there long enough and now it is time to liquidate the shorts. The first stop for ETH will be at $2400-2500. Breaking $2550 and testing that price level will result in an explosive move to the $3200 price level and then $4000. Let’s not forget that ETH is still working on moving to POS, which will be a big incentive for investors in the near future. Critical support remains at $1500. But for now, it is not yet actual. We will see when ETH completes this move up.
TA 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.

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