26 May 2021 | ZebPay Trade-Desk
The overall sentiment in the crypto space has been largely bearish for the past two weeks or so. The third week of May, saw several altcoins plummeting, and some depreciating even more than 50% in value, This suggests that traders are continuing to sell at every opportunity, even upon the slightest recovery. However, Bitcoin (BTC) and Ethereum (ETH), have seen good volume growth, at low levels, and have behaved differently from altcoins, suggesting at when markets did dip, accumulation at lower prices what the most preferred strategy among investors, who then continued to hold on to the assets. This is probably the reason why BTC and ETH have seen some degree of traction, and have started to ride the upward trend.
To further understand what this might mean for some assets, namely BTC, ETH, and BNB, let’s have a look at some charts, and also understand what is fundamentally driving the interest investors have in the asset.
The daily chart below shows how BitCoin (BTC) first witnessed a major correction from its peak of $64,899, from which the prices plunged almost 53%. However, post making the low of $30,000, the asset has seen almost 32% recovery and has started consolidating around $39,000 levels. For BTC to go further up it needs to break and sustain above the resistance level of $42,000.
At these levels, the asset looks a lot more attractive, volumes have also picked up a little as traders have started to buy in. This has resulted in an uptrend, which currently persists and has driven prices up. In addition to that, BTC price is in the green again, especially after Elon Musk pulled off a stunt that induced a sell-off that caused the market to plummet a few days ago. However, as the asset continues to go more mainstream, and adoption among investors and institutions increases, BTC will remain an attractive asset.
A similar story has played out for Ethereum, as the daily price chart below indicates. ETH post making the all-time high of $4,373 has been on the downtrend over the past 2 weeks. However, the asset has taken support at $1,750 levels and has surged almost 59%. Currently, ETH is trading around $2,800 levels and it may face some stiff resistance at $2,981. For the prices to further rally, it needs to trade and close above these resistance levels whereas $2,300 will be an important support level to watch out for.
The sentiment that continues in the asset is very much positive. As the Ethereum blockchain is moving from the PoW to PoS coupled with the upcoming protocol upgrade anticipated in late June/early July, the asset seems to remain fundamentally strong. The recovery it has seen, post its fall early this week, proves that investors continue to believe in ETH. This means that at lower levels, bulls rushed in to acquire the asset. Moreover, ETH’s infrastructure provides for wide applicability in the DeFi space, coupled with the significantly lower cost of acquisition compared to its counterpart BTC, which makes this asset a very attractive one.
BNB witnessed a sharp fall and the prices plunged almost 70% from their peak of $691 and made a low of $211. The asset currently trades at $352.66, and it might consolidate around $300 to $380 levels before witnessing another rally.
BNB is the native token for cryptocurrency exchange Binance. The correction it saw was roughly around 50%.BNB, from highs of upward of $600. Currently, BNB is the third-largest cryptocurrency by market capitalization. Being the native coin of the world’s largest exchange, BNB derives its utility from supporting activities on the Binance blockchain, as well as by lessening fees for traders on the exchange. As long as the exchange witnesses trading volumes, so will the BNB token, and hence this is probably why volumes have held up alright, given the spike in interest within the crypto community for this asset. As Binance as an exchange continues to grow and remains the leading exchange globally, BNB’s appreciation seems justified, and in the long run, this could be a key driver of BNB’s ROI portfolio.
The next week or so is crucial for the top 3 assets by market capitalization. While the bearish stance among the community might persist, the big three have started to see strong signs of recovery, and have been in an upward trend over the last few days. This week has predominantly been in the green, which indicated that markets have started to show some respite.
While this report highlights the price movement that has taken place, and the crucial levels to keep in mind for these assets, our next report, coming up this Friday, will cover these assets in much more detail, from a technical point of view, looking at volumes, price movements, key technical indicators, and patterns, as well as our views on what might be next for them.
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 Author is for informational purposes only and should not be treated as investment advice.