15th April 2022 | ZebPay Trade-Desk
Two weeks into the month of April and the market continues to tread cautiously. BTC has shown a small relief rally but the key is touching the $41,000 level to determine whether the current sell-off will continue or finally end. The asset has been oscillating between the $44k and $39K price range. We have observed that over the last 3 months BTC closing price has been somewhere between $35k to $47k which is around the 35% range. It might look a lot but this is not unusual especially for BTC as it has touched the historical annualised volatility of 68%. Although the asset broke the important psychological level of $40K this week the bears are not able to build momentum. This leads to the assumption that bulls are buying at lower levels. From an eagle’s view, both BTC and ETH have been down by 8% and 7% respectively this week. Tokens like Solana, Luna, and AVAX have also fallen by more than 10% over the week.
Continuing to responsibly stack dips would be the play here, especially given that the broader macro backdrop remains constructive in our view.
- The relief rally that we observed after 11th April has dipped below $40K may be due to the U.S CPI report that mentioned 8.5% for March, the highest in 30 years. While in the United Kingdom it has increased to 7%, quite high since the 1980s.
- The open interest for today’s options expiry in BTC is $615 mn, but the actual number might go lower as bulls are very confident.
- This week while some investors concentrated on booking small profits, the Luna Foundation Guard, the NGO attached to the Terra blockchain continues to accumulate BTC. It has added around 2,508 more BTC this week to take its total holding to 42,406 BTC just a few BTC behind Tesla’s corporate treasury at 43,200.
- The BTC price correction was heavy to leverage traders due to the aggregate liquidations reaching about $428 mn at the derivatives exchanges.
These are a few reasons why the cryptocurrency traders and investors are very concerned about the capability of the U.S.Federal Reserve rate hikes expected this year to account for inflationary pressure. Even if the economies of the world enter recession investors will have to move away from riskier investments options like digital currencies.
The whales are not disturbed by the volatility and sharp falls in the digital currencies and are looking into the long-term view. The Pantera Blockchain Fund, which earlier planned to raise $600 million has managed to accumulate $1.3 bn showing us the demand not decreasing anytime soon. BTC and other altcoins are trying to climb on the recovery track but the bulls are sure to witness stiff resistance at higher levels.
Technical Outlook:
BITCOIN:
BITCOIN has been trading in red for the past three weeks. The asset has witnessed a sharp correction and has plunged almost by 18.7% making the weekly low of $39,204. Bitcoin has taken support at the key level of $39,500 (Horizontal Trendline) and has started consolidating between $39,500 to $41,500 over the past four trading sessions. Technically, on a weekly time frame, the asset is still trading in a ‘Rising Channel’ and if it manages to give a weekly close within the channel then we can expect the up move whereas a close below the support will lead to the further downfall and the prices can test $35,000 levels.
ETH:
ETH gave a massive rally from $2,500 to $3,578. However, the asset has made a ‘Doji’ candle in an uptrend which indicated indecisiveness on the part of bulls to continue its juggernaut and the prices witnessed a sharp correction. The prices fell almost by 17.5% and made a weekly low of $2,950. ETH has taken support at the key level of $2,950 (50% Fibonacci Retracement Level) and has shown signs of recovery. If the asset holds and sustains above the support then we can expect the prices to rally up to $3,400.
MATIC:
MATIC is trading in a broad range from $1.30 to $1.75 with low volumes forming a ‘Rectangular Pattern’ ( A rectangle is formed when the price reaches the same horizontal support and resistance levels multiple times. The price is confined to moving between the two horizontal levels, creating a rectangle) indicating sideways movement or no trend. Breakouts on either side with good volumes will further decide the trend for the asset.
Weekly Snapshot:
| USD ($) | 07 Apr 22 | 14 Apr 22 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $43,503 | $39,935 | -8.20% | $47,313 | $43,146 | $43,903 | $39,373 |
| ETH | $3,233 | $3,020 | -6.60% | $3,574 | $3,159 | $3,303 | $2,963 |
| MATIC | $1.45 | $1.37 | -5.52% | $1.73 | $1.46 | $1.53 | $1.32 |
| Cryptocurrency | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | -19.34% |
| Ethereum (ETH) | -18.39% |
| Polygon (MATIC) | -19.70% |
| Resistance 2 | $52,500 | $3,415 | $2.05 | $1.15 |
|---|---|---|---|---|
| Resistance 1 | $45,500 | $3,175 | $1.75 | $1.00 |
| USD | BTC | ETH | MATIC | BAT |
| Support 1 | $39,500 | $2,975 | $1.30 | $0.70 |
| Support 2 | $35,500 | $2,750 | $1.15 | $0.55 |
Market Updates:
- MicroStrategy CEO Michael Saylor has proclaimed to shareholders of his company that his firm intends to “vigorously pursue” its reserve assets strategy to buy and hold more Bitcoin.
- The SDN list was updated Thursday to reflect the possibility that North Korean cyber-criminal Lazarus Group was behind last month’s hack of the Ronin Bridge, in which over 173,600 Ether (ETH) and 25.5 million USD Coin (USDC) were taken, Chainalysis announced by Twitter.
- Major cryptocurrency hardware wallet provider Ledger is moving to help crypto investors keep track of their taxes by integrating a new crypto tax-related solution.
- The Polygon network announced on Tuesday its commitment to going carbon neutral and climate positive this year by releasing their “Green Manifesto: A Smart Contract with Planet Earth.” They also made a $20 million pledge to offset their carbon footprints.
*Sources of charts: https://cryptowat.ch, https://pro.zebpay.com/trade/USDT-INR
Disclaimer: This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation, or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness, or reliability of the information, opinions, or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum, etc are very speculative and are subject to market risks. The analysis by the Author is for informational purposes only and should not be treated as investment advice.
