The much-needed quick and strong recovery from the weekend injury was seen in the crypto markets. However, as seen by the low volumes, the market’s misery persisted in frightening traders. While other altcoins also declare significant gains, Bitcoin was able to maintain its position over the $20,000 threshold.
Since there hasn’t been much movement this week and it seems like all assets are in a range, the markets appear to be consolidating. As most assets seem to be trapped at their support levels, this signals that overall sentiment is still pessimistic.
The bulls and bears continue to tussle for control of Bitcoin (BTC) as it hovers near the critical $20,000 milestone. Trading business QCP Capital said in its most recent market round that negative conditions were easing and investment fees in derivatives markets were flat. Bitcoin’s crash seems to be caused by rising inflation and the hawkish response of the major international banks to it. Notably, the Federal Reserve increased its benchmark rates by 75 basis points (bps) on June 15 in an effort to curb inflation, which had risen to 8.4% in May. Furthermore, the crash caused BTC to trend even higher in line with the performance of the heavily tech-focused Nasdaq Composite. Between November 2021 and June 2022, the U.S. inventory market index decreased by more than 30%.
Bearish technical indicators and significant Ethereum financing outflows are weighing on the ETH rate. It should be mentioned that, according to data records, ethereum-related financial products had outflows of $70 million during the week ending June 17. And this carried over into the eleventh straight week of capital outflows, increasing the total outflow for the entire year to $458.6 million. In contrast, one of Ethereum’s top rivals within the ecosystem of smart contracts, Solana (SOL), garnered $109 million in 2022 for its linked funds. While the funding source for Bitcoin (BTC) experienced a $480 million circulation. Deribit’s open interest for ETH alternatives shows that over $1 billion in notional value is expected for Ether before its expiration on June 24. It’s interesting to see that such Ether substitutes are prominent locations at current rate levels, receiving attention across the $1,000 strike.
On the macroeconomic side, the crypto asset class has been severely impacted by bad news regarding the economic slowdown, geopolitical fears, and industry turbulence, which has resulted in major wealth corrosion. Growing pressure on the European region as a result of rising natural gas prices and dwindling supply prospects Powell made more recent remarks about the Federal Reserve’s tightening of monetary policy while he was in the US. According to his comments on the Central Bank’s balance sheet depletion, the only plan at this time is to reduce the roughly $9 trillion in asset purchases by up to $3 trillion. The Fed’s balance sheet has increased by $4.8 trillion since February 2020, so even after reduction, it will still be higher than before the pandemic. In the meantime, despite skyrocketing inflation, the European Central Bank’s balance sheet reached fresh all-time highs this week. A major shift in aggressive policy, however, seems unlikely in the near future given the central bank’s goal of an inflation rate of 2%. It’s interesting to note that the current disparity between Fed interest rates and the consumer price index (CPI) is the largest ever.
In light of all of this, BTC and a few altcoins, including some of the majors, are attempting a reversal, but are encountering intense selling at higher levels, demonstrating that bears continue to dominate the larger market.
Technical Outlook:
BITCOIN:
BITCOIN, last week, after making the low of $17,622 is showing some signs of recovery. Currently, the asset is trading sideways in a narrow range from $19,500 to $21,500 with declining volumes. BTC has a strong support at $17,000 whereas $23,000 will act as a stiff resistance. Once the breakout occurs above $23,000 with good volumes then we can expect the prices to rally up to $28,000 whereas a close below 17,000 will lead to further downfall. Downsloping Moving Averages and RSI in the negative territory indicates that the bears have the upper hand.
ETH:
ETH has closed in red for the past eleven weeks forming ‘Lower Top Lower Bottom pattern. After breaking the long held support of $1,700 (Previous low of double bottom pattern) and its 200 week moving average, it witnessed a sharp fall and made the low of $881. ETH has taken support at the key level of $860 (low of Jan 21) and has moved back above the psychological level of $1,000. To witness a rally, ETH needs to break and close above the resistance of $1,275 whereas a break below $860 will lead to further downfall.
MATIC:
Matic has made a ‘Rounding Bottom’ pattern at the low of $0.31 and has rallied almost by 99% up to $0.63 from the low. The asset has a strong resistance zone from $0.6 to $0.65 (horizontal trendline). If it crosses and closes above the immediate resistance then the prices can further surge up to $0.75 to $0.80 levels. If it resists here then we may expect some profit booking and the prices may correct and test the support of $0.5 to $0.45 levels.
Weekly Snapshot:
| USD ($) | 16 Jun 22 | 23 Jun 22 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $20,382 | $21,085 | 3.45% | $29,402 | $20,178 | $21,621 | $17,709 |
| ETH | $1,068 | $1,143 | 7.09% | $1,679 | $1,026 | $1,185 | $896 |
| BAT | $0.32 | $0.41 | 26.66% | $0.37 | $0.26 | $0.42 | $0.29 |
| Crypto | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | -26.13% |
| Ethereum (ETH) | -37.85% |
| Basic Attention Token (BAT) | -3.26% |
| Resistance 2 | $28,500 | $1,550 | $0.80 | $0.60 |
|---|---|---|---|---|
| Resistance 1 | $23,000 | $1,250 | $0.65 | $0.45 |
| USD | BTC | ETH | MATIC | BAT |
| Support 1 | $19,500 | $860 | $0.45 | $0.33 |
| Support 2 | $17,000 | $675 | $0.30 | $0.25 |
Market Updates:
- Ukraine has sold CryptoPunk #5364, the highly valued non-fungible token (NFT) it received as a donation in early March during its fundraising campaign in its war against Russia.
- Instagram’s parent company, Meta, announced Wednesday that it will begin testing NFTs on Instagram Stories using its augmented reality platform Spark AR.
- Coinbase officially announced on June 22 that it will start sunsetting Coinbase Pro to migrate all advanced trading services into one unified Coinbase account.
- The first short Bitcoin (BTC) exchange-traded fund (ETF) from ProShares got off to a very slow start on its Tuesday launch but gathered pace by increasing trading volume by 380% on day two.
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 crypto assets 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.
