Digital Asset Insights Digital Asset Insights #65
courtesy of trademakers
A tough bearish week has passed and digital currencies are beginning to consolidate their gains and losses, and the current market situation across major cryptos, keeping you informed about the pros and cons, and updating you with what to expect in the coming few days.
On Monday, May 2, 2022, the Bitcoin price failed to cross above the 9-day and 21-day moving average as it retraced below $39,000. On Tuesday, May 3, bitcoin traded at $38,950. Immediate resistance of the coin stood at $40,000. The volume of Bitcoin trading dropped during the trading session, but the bars were seen in the green. This meant that the buying pressure was returning to the market.
After hitting lows of $37,585 on Monday, Bitcoin gained some momentum and breached the $38k level. The leading cryptocurrency was down by 4.85k in the last seven days to hit $38,531, during intraday trading.
On May 5, Bitcoin’s price floated around $39.5k, by 1% in the last seven days. For the past month, the crypto has lost 15% in value. The coin finally seemed to be making some real recovery just a month ago as it crossed the $47k mark, however since then the price has begun to dwindle down and as of May 5, it consolidated below the $40k level.
As of May 6, the market dump was led by Bitcoin. The largest crypto asset noted a freefall from $39.5k to $36.3k in just the past 16hours. Even, during the early hours on Friday (May 6), BTC went on to visit the $35.5k mark. Bitcoin turned into the red zone approximately 48 hours after the Federal Reserve (Fed) announced an interest rate rise of 0.50%. On May 6, Bitcoin´s price floated around $35.8k, down 8% in the last seven days. Over the past month, the crypto has lost 21% in value. On Saturday, the price of Bitcoin looked to be recovering a bit as it approached the $40k level, but it wasn’t long before it plunged to below the $36k level.
On May 2, Ethereum started a decent recovery wave above the $2,780 and $2,800 levels. The price consolidated above $2,820 and the 100 hourly simple moving average. There was a break above a major bearish trend line with resistance near $2,750 on the hourly chart of ETH/USD. Ethereum followed a bearish path below the $2,850 pivot level. It traded as low as $2,718 before the bulls appeared. Ether price started an upside correction and climbed above the $2,750 level. The price was able to surpass the $2,800 resistance.
There was a clear move above the 23.6% Fib retracement level of the key decline from the $2,980 swing high to the $2,718 low. There was a break above a major bearish trend line with resistance near $2,750 on the hourly chart of ETH/USD. The following day, the pair consolidated above $2,820 and the 100 hourly simple moving average. On the upside, an initial resistance is seen near the $2,850 level. It is near the 50% Fib retracement level of the key decline from the $2,980 swing high to the $2,718 low. The next major resistance is near the $2,880 level.
More so, Ethereum’s price slipped lower on Tuesday, but bulls refrained from a drop back to $2,695.79. ETH price saw a squeeze from both sides with lower highs and higher lows in price consolidation. Ethereum price was on the cusp of rallying sharply higher with targets at the 55-day Simple Moving Average (SMA) around $3,018.55 and the 200-day SMA at $3,400. Both levels hold some solid profit margins, with the 55-day SMA near 10% of gains and the 55-day SMA just shy of 25% at 24%.
Going into the weekend, the Ethereum price broke support as it targeted $2,500 on May 6. However, on Saturday, Ethereum’s price followed BTC’s lead and crashed below the $2,541 foothold. Ethereum price created an ascending parallel channel after three higher lows and two higher highs since January 25. While the consolidation was promising, ETH breached the channel on May 4, signaling that the sellers are dominating.
Additionally, Ethereum’s price also sliced through the $2,541 support level, indicating that a sell-off is imminent. Regardless of the bearish outlook, if Ethereum’s price recovers above the $2,541 barrier, the downswing could be postponed. On the other hand, a three-day candlestick close above $3,703 will create a higher high and invalidate the bearish thesis.
As the week opened, Cardano’s price crashed below the long-standing range, extending from $0.776 to $1.245. Cardano’s price continued to crash, pushing it below the lower limit of its consolidation range. As a result, ADA produced an interesting bullish setup that showed the promise of a reversal to retest a significant hurdle. Moreover, Cardano’s price had produced a lower low since March 5 while the Relative Strength Index (RSI) has created a higher high during the same period. This technical formation is termed bullish divergence and often forecasts a rally.
On Tuesday, Cardano’s price saw a daily close above $0.789, the low of March. ADA Price saw a bullish squeeze set to pop towards $0.915 before testing $1.00. Cardano (ADA) price regained some ground after its rejection against the 55-day Simple Moving Average (SMA) at $0.975 in April. That triggered a 23% downtrend but it looks to be ending as a bullish squeeze with higher lows is set to jump to $1.00, erasing the incurred losses of April. With that move, the 55-day SMA would be breached, signaling a possible end of the downturn since December.
Cardano’s price did not make it that far low to $0.687, but bulls assessed that ADA price had already devalued enough to start buying into the dip. For the third day in a row, Cardano price printed higher lows, pushing bears against the law of April 29 at $0.79. With the daily close above $0.789, pressure is mounting and will become intolerable for bears, triggering a sharp move upwards as their stops are run and there is an increased shift to the buy-side.
Cardano’s price rallied 10% overnight as the price traded at $0.83. The slope of the inclined price action looked rather steep, which is a questionable indication for future bullish price action. The slope of the incline was twice as steep as the entire rally that took place in mid-March. Traders would have to consider letting more price action develop before joining the current uptrend.
Cardano’s price volume indicated a bearish presence despite the current 10% rally. An ideal volume pattern would have been a dip in bearish volume, especially towards the high points of the uptrend. On May 5, ADA spiked as much as 14% during early Asian trading hours before dropping slightly to the $0.86 level. The driving factor for the token was demand from retail traders, as on-chain data shows a 186% rise in the number of wallets holding ADA for 30 days or longer.
On May 6, Cardano’s price experienced a strong comeback from buyers, which pushed it up explosively. However, the price faced a massive resistance at a significant barrier, leading to a full 180. Cardano’s price set a range between $0.776 to $1.240 as it rallied 60% from March 7 to 29.
Going into the weekend, Cardano’s price faced a major collapse at the $0.76 value area. From Fibonacci, Ichimoku, and Volume Profile perspectives, ADA could be on the path to one of its biggest drops in two years. Cardano’s price is at risk of another flash crash to sub $0.50 price levels. Cardano’s price is sitting right on top of its final, primary support structure. The $0.76 level represents the 61.8% Fibonacci retracement and the upper range of the current 2022 low. It is also the end of a high-volume node in the 2021 Volume Profile.
On Monday, May 2, the Solana blockchain recovered from a seven-hour outage resulting from the significant rush of bots mounting NFTs on the SOL blockchain. NFT minting programs on blockchains like Ethereum and Solana increased the transaction activity, resulting in congestion.
However, on May 4, SOL prices had a disproportionate wave structure. Solana price had yet to establish a strong countertrend candle. Solana price is displaying disproportionate price action. The downtrend looked unbalanced compared to the previous sell-off from $140 to $100. The next target for the bears was $77.
On Thursday, May 5, 2022, Solana’s price struggled to maintain the gains it made on Wednesday. Nearly all risk-on assets globally were under renewed selling pressure. Solana’s price continued to slide south as all of the post-Fed gains have thus far been wiped out.
Solana price, like the majority of the broader cryptocurrency market, experienced a major rally after the US Federal reserve confirmed another rate hike. SOL closed the Wednesday trade higher by nearly 9%, but was on track to lose all of those gains – and then some more.
More so, going into the weekend, SOL price action remained exceptionally bearish, with zero near-term support. SOL broke down below its 2022 Volume Point of Control at $90 and was close to pushing new 2022 lows. Solana price showed a total absence of buyers, and remained within an Ideal Bearish Ichimoku Breakout, signaling to traders that a long-term and persistent sell-off is likely to culminate with a massive and abrupt drop.
However, the daily Solana price chart isn’t without some bullish data. There is a regular bullish divergence between price and the %B oscillator and price and the Composite Index. Additionally, the Relative Strength Index remains in bull market conditions and is currently testing the final oversold level at 40 for the first time since converting back into a bull market.
Bulls will need to close the Solana price at or above $120 to confirm an Ideal Bullish Ichimoku breakout to give a clear signal that a new uptrend is about to continue.
Avalanche was on the decline in the last 7 days. The price of Avalanche has fallen by 14.22% last week. The price declined by 8.99% on Saturday but grew in the first hour of Sunday by 1.76%. The current price is $49.11 per AVAX which is 66.41% below the all-time high of $146.22.
USD COIN (USDC)
Like Avalanche, USD Coins were also on the decline last week. The price of the USD Coin was neither bearish nor bullish in the past 7 days. However, it declined by 0.01% in the last 24 hours of Saturday. The current price is $1.00 per USDC. The new price represents a new all-time high of $1.00.
The price of Tether has fallen by 0.06% in the past 7 days. The price declined by 0.05% on Friday and further shrunk by 0.05% on Saturday. The current price is $1.00 per USDT. Tether is 18.03% below the all-time high of $1.22.
The price of Binance USD has risen by 0.10% in the past 7 days. Though it was bullish by 0.05% on Saturday, it shrunk by 0.10% on Sunday morning. The current price is $1.001 per BUSD. Binance USD is 9.82% below the all-time high of $1.11.
Digital Asset Insights
Digital Asset Insights #65
appeared first on JP Fund Services.