The crypto market extended good gains this Friday, despite the looming fears of an economic slowdown and the US Federal Reserve raising interest rates to 0.75 basis points to stem inflationary pressures affecting global sentiments. All major tokens, including BTC and ETH, are trading in green today. XRP seems to be leading this relief rally with around 29% gains while assets like Ether, Cardano, Doge and Solana have risen by more than 7%. The global crypto market capitalization was trading at a high of $953.6 Billion, increasing around 5% in the past 24 hours. But the total trading volume has fallen by about 16% close to $77.88 bn.
Bitcoin, however, is struggling to reclaim $20,000 as a hedge in a higher interest rate environment. Its correlation with US equities also points to a further decline in 2022. A Bitcoin on-chain indicator that tracks how much of the coin supply is held by long-term holders (LTH) at a loss indicates that the market bottom may be near. On September 22, about 30% of Bitcoin LTHs faced losses as BTC had fallen from $69,000 in November 2021 to around $19,000 now. That’s about 3-5% below the level previously coinciding with Bitcoin’s market bottoms. During the current bear market, the number of addresses collected has meanwhile increased steadily, data shows. The metric tracks addresses that have “at least two incoming transfers with no dust (Dust refers to an amount less than what is required for a transaction) and have never spent any money.” Also, the number of addresses with a non-zero balance hovered around 42.7 million compared to 39.6 million earlier this year, showing steady user growth in a bear market.
Ether (ETH) additionally noticed a 17.3% retrace for the duration of the seven-day length and plenty of altcoins saw even worse. The Ethereum Merge and its next effect on different GPU-mineable cash induced a few skewed consequences of some of the worst weekly performers. Ethereum funds saw $15.4 million worth of capital outflows from their coffers in the week ended September 16, according to CoinShares weekly report. In contrast, Bitcoin-based mutual funds attracted $17.4 million in the same week, indicating post-merger capital migration. The asset also felt extreme selling pressure from its Proof-of-Work (PoW) miners, who sold $40 million worth of Ether in the days leading up to the PoS upgrade.
On the macro front, The Federal Reserve hiked rates by 75 basis points on Sept. 21 and Fed Chair Jerome Powell projected another 125 basis points increase before the end of the year. The United States Dollar Index (DXY), which measures the dollar’s strength against a basket of major foreign currencies, rose to 111.57 for the first time in 20 years. The Federal Reserve also released an updated “dot plot” that met its officials’ individual interest rate forecasts for late 2025. If that happens, it will take the benchmark rate to 4.4% by the end of the year, which is sharply higher than the June estimates of 3.8%. The Fed also intimated that it only expects rate cuts to be considered in 2024. The expectation of higher rates pushed the 2-year Treasury to 4.1%, its highest level since 2007. This could attract several investors who are looking for safety in this uncertain macro environment. Higher rates are also likely to reduce the appeal of risky assets such as stocks and cryptos and may delay the start of a new uptrend.
Technical Outlook:
BITCOIN:
BITCOIN after facing stiff resistance at $22,500 witnessed a sharp correction on 13th September 2022 and broke the support of $20,740 and 20 Day Moving Average. Post this move the asset consolidated between $19,500 and $20,500. The prices gave a breakout on the downside and are trading below the range making the low of $18,125. The bears however failed to break the key support of $17,622 and the prices reversed from the $18k levels. Bitcoin has strong resistance at $20,750 and $22,500. To witness a rally BTC has to break and close above these resistance levels whereas $17,500 will act as strong support. A break below the support can lead to further downfall.
ETH:
ETH after making a ‘Bullish Engulfing’ pattern at $1,422 on 29th Aug rallied up to $1,789. Post this move, the prices faced stiff resistance at $1,750 (23.6% Fibonacci Retracement Level) and witnessed a sharp correction. The asset fell almost by 31% making the weekly low $1,220.1. ETH is trying to take support at the key level of $1,250, If the prices hold and sustains above this support then we can expect the bulls to resume the up-move whereas a break and close below the support will lead to further downfall.
BNB:
BNB after making the low of $258.6 on 7th September Showed good signs of recovery and rallied up to $300. The asset faced stiff resistance at the psychological level and witnessed a correction and the prices yet again dropped to $258 levels. Currently, BNB is consolidating and trading in a range from $260 to $280. Breakouts on either side of the range with good volumes will further decide the trend for the asset.
Weekly Snapshot:
| USD ($) | 15 Sep 22 | 22 Sep 22 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $19,701 | $19,413 | -1.46% | $22,674 | $19,625 | $20,163 | $18,290 |
| ETH | $1,472 | $1,328 | -9.79% | $1,785 | $1,457 | $1,473 | $1,229 |
| BNB | $270.81 | $275.50 | 1.73% | $299.18 | $268.01 | $279.62 | $257.19 |
| crypto | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | -15.11% |
| Ethereum (ETH) | -11.85% |
| Binance Coin (BNB) | -12.96% |
| Resistance 2 | $28,500 | $1,750 | $340 | $0.45 |
|---|---|---|---|---|
| Resistance 1 | $22,500 | $1,475 | $300 | $0.33 |
| USD | BTC | ETH | BNB | BAT |
| Support 1 | $17,500 | $1,250 | $255 | $0.30 |
| Support 2 | $15,000 | $1,000 | $220 | $0.25 |
Market Updates:
- Taki, a Web 3.0 social media platform, launched on the Google Play Store and its active user base has surpassed the half million mark. To date, over 468,541 unique user coins have been generated with an active user base of 559,705.
- Jesse Powell, the co-founder of crypto exchange Kraken, plans to step down from the CEO role, Kraken confirms. The Wall Street Journal first reported the news.
- Bitcoin (BTC) mining hosting firm Compute North has filed for chapter 11 bankruptcy, amid growing pressure on the firm due to the effects of crypto winter and rising energy costs. The firm’s CEO Dave Perrill has also stepped down but will remain on the board.
- Just like Binance, India-based exchange WazirX will implement BUSD auto-conversion for balances of USDC, USDP and TUSD at a 1:1 ratio in October.
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 cryptos 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.
