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Crypto Technical Analysis Report | 22-Apr-22

Markets appear to be consolidating: we believe so as we haven’t witnessed much action this week, with all assets appearing to be pretty range bound. This suggests a bearish sentiment overall since most assets seem to be stuck at their support levels.

Further, as of March, most digital assets are  15-65% off their lows. On the other hand, some assets have been sidelined and they are behaving as though they’ve missed the rally. It seems justifiable to treat the current prices as a sort of no man’s land between di buying and profit booking, we think this trend has legs.

In traditional markets, with its own demand and supply logic, it may be difficult to justify buying an asset that has rallied 50% over the span of two weeks … but this is crypto we are speaking of, where momentum trading has always deeply intrigued trader’s muscle memory. In the past decade of price action, interpreting the type of moves we’ve just seen as a sell signal would have resulted in missing out on some of the most spectacular rallies in the history of finance.

Technical charts suggest that  Bitcoin, XRP, LINK, BCH, and FIL may be on the verge of a sharp breakout, but traders are still wary. Most assets have been relatively quiet since the holiday season, that is Good Friday onwards. Reasons for that could range from  U.S. equities markets being closed, during which time crypto traders are not making big bets among others. This is likely to have resulted in a tight correlation between BTC and the S&P 500. Furthermore, the outlook has dampened due to the uncertainty that persists in the equity markets of late. Several industry leaders are anticipating weakness in the short term, however, fundamentalists believe that Bitcoin could be in a consolidation phase with a large portion of its upside in the four-year halving cycle that is yet to come. 

The macroeconomic outlook hasn’t seen any upside ever since the onset of the Russia-Ukraine war. With inflation and unemployment rising across both the US and China, the downward pressure on equities, and cryptos is pretty high. Institutional flows have seen a dip, and retail investors seem to be sitting on the sidelines, due to the uncertainty that is currently prevailing in the market. BTC dominance has fallen and presently stands at 41.1%. This could be the beginning of the ‘altcoin season’, where alts rally and have a spillover effect on BTC. However, these rallies aren’t sustainable, and for the market to witness a significant uptrend, a BTC-led rally needs to set in.

Technical Outlook:

BITCOIN:

Crypto Technical Analysis Report

BITCOIN was trading in a ‘Rising Channel’ pattern. However, after facing stiff resistance around $48,000 witnessed a sharp fall and the prices corrected almost by 20% making the weekly low of $38,536. The asset broke the channel on the downside but it bounced back up from the key level of $38,700 (61.8% Fibonacci Retracement Level). Currently, BTC is trading sideways in a range from $39,500 to $42,000. The major hurdle for the bulls will be the 200 Day Moving Average ($44,200) whereas $39,500 to $38,700 will act as a strong support zone for the asset.

ETH:

Crypto Technical Analysis Report

ETH made a weekly low of $2883 and took the support at the key level of $2,869 (50% Fibonacci Retracement Level) and bounced back up. The asset is facing stiff resistance at its 200 Day Moving Average and is currently trading sideways in a range from $2,950 to $3,155 with low volumes indicating no trend.  Once on either side of the range with good volumes will further decide the trend for ETH. 

MATIC:

Crypto Technical Analysis Report

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 2214 Apr 22 Previous WeekCurrent Week
 CloseClose% ChangeHighLowHighLow
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
Cryptocurrency1w – % 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
USDBTCETHMATICBAT
Support 1$39,500$2,950$1.30$0.70
Support 2$35,500$2,750$1.15$0.55

Market Updates:

  • Billionaire and Bitcoin advocate Ricardo Salinas believes that the growth of Bitcoin is inevitable, but its future depends on how fast and cheap transactions can get.
  • Lawmakers in Australia want to regulate decentralised autonomous organisations (DAOs).
  • President Biden announces former Ripple adviser as the pick for Fed vice chair for supervision.
  • Fidelity Investments, one of the largest financial services firms with more than $11 trillion under administration, is launching exchange-traded funds (ETFs) focusing on the crypto ecosystem and the metaverse

*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.

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