Welcome to our weekly brief. Here you will find what is going on on the markets and what are expected events in week 25.
Fundamentals and expected events: week 25
Crypto markets: The latest market dip from the last weekend appears to have been triggered by Agricultural Bank of China, the third largest bank in the world, publishing and then deleting a statement about immediate ban of customers that deal in any manner with cryptocurrencies. The total crypto market cap has shrunk to $1.3 trillion. Bitcoin is currently trading below $33,000. Ether, the second-largest cryptocurrency, collapsed below the psychologically important level of $2,000 for the first time in nearly a month. Other major altcoins are also taking a massive hit at the time of writing. Ripple-affiliated XRP is currently trading at $0.69. Dogecoin is trading at just $0.25. There are speculations that China started to crack down on cryptocurrencies because of the incoming digital yuan. It’s worth noting that the Agricultural Bank of China is actually working on the CBDC and has participated in previous tests.
Stock and commodity markets: Wall Street on Friday recorded a fourth losing day in a row. The S&P index fell 1.9% for the whole week, which is the deepest weekly decline since the end of February. Stock markets are reacting to a turnaround in the Fed’s communication, which on Wednesday indicated that it had started a discussion about slowing dow with its QE and that it could start raising rates earlier than previously indicated. This statement was supported by more hawkish comments from Fed on Friday. Subsequently, stocks that pulled indices up at the beginning of the year corrected the most last week. There were also more declines in other markets. Japan’s main stock index, the Nikkei 225, fell 3.5%. Hong Kong’s Hang Seng fell 1.35%. According to analysts, the repercussions of Wednesday’s decision of the US Fed and fears of higher inflation were the main causes of the decline. Commodities were slightly declining as well.
Important events: ECB Governor Lagarde will speak this week and we will also see three speeches by FOMC members. US President Biden will be holding a meeting with financial market regulators. Jerome Powell will have a speech on Tuesday, followed by macroeconomic data from Great Britain, Germany, France, Canada and United States.
Cryptomarkets and marketcap: week 25
The total crypto market capitalization reached 1,418 trillion USD on June 21st.
Bitcoin’s price is currently 32,967 USD.
Bitcoin’s dominance is currently 43,6%.
We had another week where the price failed to move anywhere outside of the range with 40-42K resistance zone and the 32-34K support. It is a common beginner’s mistake to try to predict where the market is going to move during the ranging market phase. Range means there is indecision on the market and both sides are lacking conviction to break the support or resistance of this range. The only thing that this long lasting range can tell us is that whichever side of the market is going to break out of the range, it’s going to be a big move.
The range with 2300-2100 support and 2700-2800 resistance was just broken on the 4H chart that is relevant to the current range. We broke the support on a relatively high volume, which is a sign of a high quality breakout because there are a lot of sellers involved in this move (breakouts on small volume usually don’t work out and it’s just a random market noise). However, let’s keep in mind that BTC and ETH are highly correlated and we have not reached the bottom of the BTC range that might cause reversal on ETH as well.
An interesting anomaly is happening on the chart of the WAVES/USD. While other cryptos are experiencing big corrections, WAVES is attacking the current top of the range Resistance zone at 16,5$-18$. I keep repeating that over the past month that all the moves on the crypto market are highly correlated so we want to keep an eye on cryptos that are not following the same patterns as there might be high volatility moves coming. Of course we don’t just jump into the market without confirmation that what we expected to happen does happen and we can make profits on it. More on this in our Platon Trading Academy.
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.