Welcome to our weekly brief. Here you will find an overview of main events and news from last week and expected events for week 47.
Fundamentals and expected events: week 47
Crypto markets: Bitcoin tried to recover from last week’s decline and managed to rise to the levels in the $60,000 area. However, the cryptocurrency failed to make a breakthrough and a drop back to $57,000 followed, in spite of the positive news that the president of El Salvador has announced that his country will offer bonds in Bitcoin and that crypto exchange Bithumb got an approval for operations in South Korea. Most altcoins have followed BTC’s lead in the past several days, which means they are slightly in red too. The cryptocurrency market capitalization went down by around $100 billion in a day since yesterday’s peak and is at around $2.7 trillion on CoinGecko now.
Stock and commodity markets: Stocks in Asia traded mostly at higher levels at the start of the week and indices in China also added. Europe is in slightly positive territory shortly after the open and US index futures are following a similar pattern. Precious metals are trading mixed with gold and silver falling, while platinum and precious metals are rising. Oil is slightly down.
Important events: In both Germany and the US, a refined estimate of Q3 GDP will be published and a number of indicators measuring confidence in the economy will also be released. The economy is weighed down by persistent supply-side drag, higher producer and consumer prices and, more recently, a worsening of the epidemic situation. Restrictive measures are being tightened in some countries, starting today in the Czech Republic. In the USA, the epidemic situation is more favourable than in Europe. This will also influence the reasoning of the Fed and the ECB. Both banks will release the minutes of their last meeting this week and both will make another decision on monetary conditions before Christmas. The Fed could debate a further increase in the pace of tapering at its next meeting. The ECB, on the other hand, seems to want to keep monetary policy loose. Markets will wait for the appointment of the new Fed chief, which should be known by Thanksgiving. Either Powell will be re-elected or Lael Brainard, who is a bit more dovish.
Cryptomarkets and marketcap: week 47
The total crypto market capitalization reached 2,690 trillion USD.
Bitcoin’s price is currently 57,194 USD.
Bitcoin’s dominance is currently 40,1%.
Crypto Fear and Greed index is 50, neutral.
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Not only was the buy box around the 61k per BTC price filled, the fakeout buy box was realized. Since it was only supposed to be a fakeout to allow BTC to reverse back above 200EMA, we lingered around the 57k price for too long, which led to a death cross and now 200EMA forms resistance for BTC. In situations like this, when the market is behaving erratically, it’s good to take a bird’s eye view. We expect the next stop after a corrective move to 60-61.3k for BTC at the 48-50k level. The main blue TL is back in play again. You wouldn’t want to see BTC close below the main blue TL, because then far more significant moves to the downside could start happening. Our Buy/Sell box indicates where the next move will be decided. Breaking the red key TL and testing we will go up and after confirming resistance in the form of 200EMA and refusing to move up we will see 48-50k.
The bullish move did not occur and instead the DOGE began to consolidate along the blue TL. We don’t like the reaction at this price level and all indications are that we will look even lower in price. The death cross didn’t help matters much either and the 200EMA at $0.25 is now forming resistance. The only thing we see positive is the RSI which may help price temporarily. After a bullish divergence on the 4H, we could get a move up to the $0.25-0.27 price level on the DOGE. A close below the $0.22 price level could set off another significant move to $0.16-0.17. The confluence of TLs and supports around the $0.23 price gives us a lot of hope that things could turn out more optimistic than it looks now. So come on DOGE, show us what you’ve got.
ETH made a less than ideal move as it broke the throat of the C&H formation. However, let’s keep a cool head. Given how ETH has dictated the pace in recent days and now even after such a move to slightly below our buy box, there is still no death cross on ETH, which is very positive news for the entire market. But it’s also a signal that if the death cross does take place, we’ll look significantly lower on other coins. On ETH, the next stop for a move down is $3430. The buy box is valid after any death cross. Otherwise, we will look and test $4400-4500 for ETH. We have to conclude that in order to meet the forecasts from the November-December surge, ETH should kick the prop as soon as possible. Otherwise…
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.