Digital Asset Insights
Digital Asset Insights #67
It has been a volatile week in the crypto market as predicted. Smart investors are guided by the history of the price action of these digital assets to trade securely. This newsletter keeps you informed in making smart cryptocurrency decisions.
Bitcoin opened with a slight increase in price on Monday exchanging hands at $29,517.75 as of 10.05 AM East African time. Bitcoin plunged as low as $25,401.29 on the 11th of May, marking the first time the flagship cryptocurrency sank below the $26,000 level since December 26, 2020. On the 16th of May, Bitcoin’s price hovered around $29.7k, down 6% in the seven days. Over the past month, the crypto has lost 25% in value
On the 17th of May, Bitcoin quickly rebounded back above the $30k level from the crash down to below $26k, the coin hasn’t shown much movement. It was unclear when BTC may break out of this consolidation that it has been stuck in during the past week.
On Wednesday, Bitcoin extended its decline and traded below $29,000 against the US Dollar. Bitcoin started a fresh decline from the $30,500 resistance zone. The price traded below the $30,000 level and the 100 hourly simple moving average. There was a break below a connecting bullish trend line with support near $29,600 on the hourly chart of the BTC/USD pair. A low was formed near $28,589 and the price consolidated losses.
On May 20, Bitcoin started a fresh increase from the $28,500 support zone against the US Dollar. Bitcoin formed a base above $28,500 and started a fresh increase. A major bearish trend line formed with resistance near $30,400 on the hourly chart of the BTC/USD pair. There was a clear move above the $29,500 resistance zone and the 100 hourly simple moving average. The bulls even pushed the price above the $30,000 resistance zone. However, they faced an uphill task near the $30,600 zone.
On Friday, Bitcoin managed to jump back above $30,000 after falling sharply in the last few weeks. There was hope the mega-cap coin was finally back on an upward trajectory. However, technical analysis does not support this and in fact, the surge could be a dead cat bounce as Bitcoin struggled to keep the momentum going above the $30,000. The $30,000 price is psychologically important for Bitcoin. When the coin fell below it, there were fears that it could unravel to $20,000. But Bitcoin has recovered and has finally regained $30,000.
On Sunday, 15 May 2022, the Ethereum price moved above the $2,000 price mark as it changed hands at $2,120 with a market cap of $256.5 billion. ETH/USD once again touched the $2136 mark as the number two crypto faced the path of development, However, the Ethereum price hovered below the 9-day and 21-day moving averages at $2,120 with 3.29% gains on Sunday.
On Monday, 16 May 2022, ETH/USD entered a recovery mode after it tumbled and hit support at 1685. The recovery brought the crypto back above the 2000 mark, but it remained well below the downside resistance line drawn from the high of April 3rd.
At midweek, Ethereum's price drifted lower on Wednesday. The coin dropped to a low of $1,964, which was its lowest level in the last 7 days. It was a sea of red as other cryptocurrency prices nosedived. On Friday, 2o May 2022, the ETH price was to establish bullish momentum. Ethereum price showed bullish exhaustion on the Relative Strength Index. Ethereum price displayed reasons to believe in a ‘sweep the lows’ event in the coming days. Traders should approach the smart contract blockchain with caution.
However, going into the weekend, Ethereum price hints at another price drop in the making as the bulls failed to propel a substantial retaliation compared to the powerful decline displayed by the bears this month. The bears continuously keep the ETH price suppressed, causing congested price action around the $2,000 level.
The Relative Strength Index displayed clear negative reversal signals, showing that bullish attempts to reconquer the trend are barely fuelled. One could read the indicator as Smart Money uninterested in negotiating at the current $2,000 price level. If market conditions persist, the bulls will eventually capitulate as weak hands will likely place their sell stops below $1,700. A second target is likely at $1,500, which if taken will shake out traders from 2021 levels who chose not to take profit.
As the trading session of the week opened, the XRP price witnessed a trend reversal and wiped out losses over the past few weeks despite bearish indicators. Analysts are bullish on XRP recovery, and predict a comeback in the altcoin. XRP price rally has helped the altcoin recoup its losses over the past few weeks. Key technical indicators in XRP continue to remain bearish, however, the progress in the SEC vs. Ripple case has fueled a bullish sentiment among investors.
XRP price plummeted 27% over the past week as a bloodbath hit the crypto market. Altcoins and meme coins suffered massive losses after Terra’s UST crash. In the SEC’s proceedings against Ripple, the defendant’s lawyers have filed a response to the protected emails of the former director of the division of Corporation Finance, William Hinman. The regulator has requested for Hinman emails to remain under wraps; these emails were covered by the attorney-client privilege.
On May 20, 2022, the XRP price was severely diverging. XRP price seemed to abandon the rule that all cryptos move in unison. The XRP price showed distinct differences compared to Ethereum and Bitcoin prices. The deep retracement established this week into the highs at $0.43 warrants the idea of an extended decline in the near future.
XRP prices targeted $0.35 and $0.30. Due to the newly presented decorrelating evidence, it is not advisable to depend on Bitcoin for a definitive market bottom. Ripple price consolidates between $0.50 and $0.36 on a weekly chart.
Ripple's (XRP) price came close to a full recovery after the positive shift in sentiment on Friday, but as long as price action remains below $0.50, there is still no evidence of a fundamental turnaround in sentiment. With the Relative Strength Index (RSI) flatlining and the red descending trendline not undergoing a test, investors will lose even more interest in XRP price action and trigger another exodus, with XRP price bleeding below $0.36 and a 60% loss at hand.
Ripple price is having it difficult to make ends meet in this very challenging environment. With the massive whipsaw moves this week in all markets' assets, cryptocurrencies look bleak in withstanding these waves. As XRP price closes further to the downside with no signs of recovery or at least a test on any of the price caps currently ruling, a return is nowhere near, and lack of interest further makes XRP price bleed.
On Sunday, 15 May 2022, ADA price unfolded an impulsive wave down. Cardano's price showed a bearish divergence on the Relative Strength Index. Cardano's price saw bulls unable to hold price-action above monthly S1 support at $0.60.
Cardano price (ADA) price action turned 180 degrees on Monday after a series of harmful data points from China put cryptocurrency traders back in a negative mood. To make matters worse, more and more big names were entirely pulling out of Russia, with McDonald’s as one of the latest amongst them. All these elements are weighing on global growth and global risk sentiment, making it very hard for cryptocurrencies to have any tailwinds, and could spell another 32% drop for ADA.
Cardano price had issues respecting support on Monday morning. Price action broke through the monthly S1 after a slew of negative economic data out of China put investors on edge on the first trading day of a new week. Adding to the negative sentiment, McDonald’s announced it would cancel and exit all operations in Russia, meaning a severe write-off and downward forecast for earnings in the coming quarters.
Cardano price action resumed the prior downtrend on Thursday. A bearish continuation pattern and rejected bullish reversal pattern signal further downside momentum. Cardano price action showed continued bearish selling pressure towards the $0.50 value area. ADA did close above a key Ichimoku level on Tuesday, but follow-through by bulls never happened.
Cardano price provides bearish confluence using the Relative Strength Index, as several bearish divergences and negative reversal signals are taking place. Traders should expect a fall to $0.45 and possibly $0.40 but should be careful of asking for any more. A sharp rally will occur after the final bearish impulse wave is established if the technicals are correct.
Going into the weekend, Cardano's price was in a spot favorable for the bulls and short-term traders as a rally might be in the works. Cardano's price set a range between $0.487 and $0.614 as it rallied 25% between May 14 and 16. Since then, ADA has not moved to sweep either of the ranges.
Cardano price could go either way next week, but the downtrend still rules. Cardano price is being dragged into the turmoil of cryptocurrencies losing their favorite status. They started to be deemed unreliable and too exposed to waves in financial markets. In the aftermath of the Terra LUNA massacre, the image of cryptocurrencies got severely damaged and has made retail investors and traders realize significant losses could be at hand if things go south big time. With that in the back of their minds, Cardano's price is set to enter another round of pain trades with a drop back to the low of last week near $0.415, and at risk of slipping 85% after that level towards $0.075.
Cardano's price is at critical risk with yet another loss in the trading books. With a seventh consecutive week of losses, a turnaround does not seem to be anywhere near the vicinity. There are no fundamental support levels or elements bulls can hang on to for an entry and turnaround. Entering here would be foolish as stops and stop losses within the trade management would be too exposed for a squeeze.
At the start of the week, Solana's price action was relatively weak compared to its peers. Solana's price made some significant gains from its new nine-month and 2022 lows last week. However, the bounce from the lows has been somewhat muted compared to Bitcoin and the broader altcoin market. Solana price struggles to maintain gains made over the weekend
Solana price experienced the same dramatic swings in price action last week that the broader crypto market experienced. After hitting a new 2022 low of $37.37 on May 12, SOL rallied over 57% to close just shy of $60 at $58.83 on Sunday. Solana's price has been on a downtrend since its all-time high at $261.51.
On Monday, the stabilization around $44.91 hints at a 42% upswing for SOL. Solana price has found a stable support level which is currently providing a foundation of support for bulls to make a comeback. Solana's price crashed 86% from its all-time high at $261 on November 6, 2021. The most recent crash began on May 5 and tanked the Layer 1 token by 63% from $95 to $35. This downswing pushed SOL below the range low at $66.19 and tagged the $44.91 barrier. So far, Solana's price has rallied by 69% and hovered around $58.72 on Monday.
As markets moved a lot on Monday, some assets traded at critical levels that could see a rejection. The same goes for Solana's price as it pressed on the $58.84 level and saw a rejection to the downside.
Solana (SOL) is nowhere near flagging that a bull run is underway. Every rally during the week has been a mere drop on a hot plate as bears were quick to match and break below the previous trading day's low. With such bearish sentiment, bulls will further stay sidelined and await a better level to enter, with $19 marked up as the turnaround signal.
Going into the weekend, Solana's price closed out the week below $61.44, which is on a weekly chart, a critical level going back to May of 2021. Together with the death cross, where the 55-day Simple Moving Average (SMA) is trading below the 200-day SMA, and the red descending trend line, the overall tone is still very much to the downside, with no turnaround anytime soon. Even though this downtrend is going into its seventh week of declines, the Relative Strength Index is still not oversold but is starting to even out a little bit.
Dogecoin was on the rise last week. The price of Dogecoin surged by 0.06% in the past 7 days. The price increased by 2.06% on Sunday, May 22, 2022. However, In the first few hours of Monday, May 23, 2022, the price shrunk by 0.74%. The current price is $0.0871 per DOGE. Dogecoin is 88.23% below the all-time high of $0.74.
Tether experienced a 0.09% uptrend in price action last week. The price increased by 0.03% on Sunday but has remained the same since the start of Monday’s trading action. Tether is currently exchanging hands at $0.99892 per USDT which is 18.12% below the all-time high of $1.22.
Binance has been bearish in the last 7 days. The price of Binance USD fell by 0.05% last week. It further declined by 0.05% at the end of the weekend. The decline continued into the new week as another 0.05% gain was wiped off. The current price is $0.999 per BUSD, meaning that it is 10.00% below the all-time high of $1.11.
DIA is one of the newest altcoins and it has continued to rise in value remarkably. Just last week, the price of DIA experienced a momentum of 39.24% gains. The price has continued into the new week with 1.68% gains at the earliest hours of the week. The price is $0.53135 per DIA and 90.82% below the all-time high of $5.79. The current circulating supply is 72,401,614 DIA.