Welcome to our weekly brief. Here you will find what is going on on the markets and what are expected events in week 26.
Fundamentals and expected events: week 26
Crypto markets: Crypto markets failed to fully recover from the last week’s slump, that pulled Bitcoin below $ 30,000. The decline was even more evident on the altcoin markets. Bitcoin fell sharply on Tuesday after the announcement by the People’s Bank of China, from about $ 35,450 to nearly $ 29,420. However, whales were happy to buy cryptocurrencies during the dip, and so there was a turnaround, and now the crypto markets are in the green again.
Stock and commodity markets: Stock markets will enter the second half of the year in the new week. So far, this seems to be the second strongest half since the turn of the century. Stock indices have had a successful week. The S & P500 and Nasdaq added 2.74% and 2.35%, respectively. The Dow Jones index was even more successful, adding 3.44%. Market sentiment thus remains positive. Energy prices also continue to rise. OPEC + will hold several meetings this week to assess the situation on the global oil market ahead of the upcoming official meeting on Thursday, July 1, 2021. Gold has not been very successful lately and is still hovering around $ 1,800 / ounce.
Important events: The first week of this month will again be marked by important macro monthly data in the US and the Euro area. The president of the United States agreed with the senators on new infrastructure expenditures totaling $ 579 billion and also on not increasing the tax burden. Biden said it wasl a long overdue financial injection that will be modernizing the entire United States. In the Euro area, there will be rising inflation and preliminary June consumer price index (CPI) figures will be published during Wednesday’s trading session. Inflation in the Euro area rose above the European Central Bank’s 2% target in May, but ECB officials rejected price growth as a temporary and short-term phenomenon, coming with the recovery of Europe and the opening up of economies. However, several members of the ECB’s Bank Board have begun publicly considering a change in monetary policy. The ECB meeting on Wednesday should provide more information.
Cryptomarkets and marketcap: week 26
The total crypto market capitalization reached 1,439 trillion USD on June 28th.
Bitcoin’s price is currently 34,834 USD.
Bitcoin’s dominance is currently 45,4%.
Nothing new on the markets from the past week. We have been ranging between the 42,5K resistance and the 29K support for the 6th week now. Let’s look a bit at the history of how BTC behaves: when we look at a range with exactly the same values that was in play at the beginning of this year, we can learn from this. We were in this range for about 5 weeks and the catalyst for the price getting out of this range was the touch and “carry” of the price with 50MA on the daily chart. Something very similar might happen this week, just in a bearish direction. The contact and reaction of the price to the 50MA might determine the future move of the market…
Since we had a breakout of the long lasting 2300-2100 support and then turned into the resistance zone (broken support very often turns into the resistance and vice versa) and now past week the price seems to be stabilising in another smaller range with support for 1700 and resistance at 2000. How do we know that price is “ranging” or “created a range”? Very simply we need 2 touches and reversals on similar places that create a support and resistance of the given range – very simple rule. And what does “range” mean from the orderflow perspective? It means indecision in the market about the future movement of the price. Therefore in this case buyers consider 1700 to get in on ETH and 2000 a great price to sell ETH. This psychology and thinking creates the ranges in the markets that can often bring great trading opportunities.
Very interesting structure is forming on the Cardano/USD. We had a breakdown below the 1.375 support that turned into resistance now (similar thing I talked about in ETH analysis). Now what is different from ETH is that each touch of this resistance created weaker and weaker pullbacks. The first touch resulted in a massive 31% move in price, however the second one in just 14%, not even half. What does this tell us? It communicates to us that the buyers are willing to step back into the market at “worse” price – first touch they entered at 1$ and the second touch they entered at 1.2$, therefore accepting 20% higher price as an entry point. What does that mean? The buyers in the market have faith in the Cardano price going up therefore they are willing to accept a worse price as an entry point. It is also confirmed by the ascending trendline that tells us that there is a “stable trend” of buyers getting in at higher and higher prices.
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.