Weekly crypto market analysis (20 - 26 February)

Tradesilvania provides a weekly analysis of the cryptocurrency market.

Crypto Market Evolution

The crypto market experienced a week of corrections, which is not unusual given the recent rally and the current state of other risk investments such as stocks and commodities. The declines were largely driven by the strengthening of the USD, which negatively affects risk-bearing assets including cryptocurrencies. It's worth noting that corrections are a healthy part of market cycles and offer opportunities for long-term investors to enter the market at more attractive prices. Despite the recent dips, the crypto market has reached its highest point in the last six months, which is a positive sign for the future.

It's not surprising that the crypto market experienced a period of corrections, given the slowdown in the rally of other risk investments like shares and commodities at the beginning of the year. What triggered the declines in the recently concluded week was the strengthening of the USD.

Speculations that the US Central Bank will continue interest rate hikes at a sustained pace to combat inflation have led to a stronger American Dollar. This, in turn, has negatively affected assets considered to be risk-bearing, including shares, commodities, and crypto. Investors tend to buy USD as a protective asset against potential risks from the market when signs in the economy are not the best.

Overall, the recent declines in the crypto market are in line with movements on international stock exchanges and should be seen as part of the larger context of market fluctuations.

In this context, BTC and ETH decreased in value by more than 5%, and other cryptocurrencies such as MATIC, DOT, ICP, or FTM had more than 10% depreciation.

The total capitalization of digital assets dropped again towards the 1 trillion USD mark.

Bitcoin fell by more than 5% in the last week, returning to around $23,000, after recently rising above $25,000, even if for a short period. BTC's evolution was influenced by the worsening of the general sentiment in the financial markets amid fears that the US Central Bank will continue to alertly tighten access to credit, which analysts did not consider at the beginning of the year.

Thus, the price of the most well-known crypto-asset was pushed down from the important area of ​​USD 25,000, the area on the chart where two important technical indicators meet: the 200-week moving average (purple line) and the resistance line of the former recent maximum, from August 2022. As we mentioned in the previous report, a price retreat from this level was to be taken into account, given the possibility of natural corrections after the early-year surges.

If the current state of fear in the financial markets continues, Bitcoin could drop to the $21,000 area - which was the previous low in early February. To see Bitcoin's price rise again, we'll need to see more optimism in the market. If that happens, we could see Bitcoin retesting the $25,000 level.

As we've mentioned before, it's important to keep an eye on global developments and international stock exchanges, as they can greatly impact movements in the crypto market. Staying informed about these external factors will help you make more informed decisions about investing in crypto.

Ethereum (ETH) fell by approximately 6% in the past week, dropping to the $1,600 level. Similar to Bitcoin, the decline in stock exchanges also pulled down Ether's price, affecting all risk-sensitive investment assets."

ETH has been struggling to break through the resistance line of the last 4-month high, which was around the $1,750 area. This could mean that the price may face some challenges shortly. ETH's performance this year seems to be more of a lateral consolidation (as highlighted in purple), which may be due to investors waiting for the results of the implementation of the Shanghai upgrade. We've mentioned this upgrade in previous reports and it could have an impact on the price of Ether.

If the recent declines in the market continue, we may see ETH drop to the $1,400-$1,500 range. However, if optimism returns to the market, we could expect ETH to reach $1,750 again, and potentially even break above this level.

Two weeks ago, there was major interest in EGLD when the Romanian team announced a partnership with Tencent. However, in the past few days, the price of the MultiversX network token has been correlated with general market declines, leading to depreciation that pushed eGold below $50. During periods of market pressure to sell, all crypto assets are affected, regardless of their unique characteristics.

In a pessimistic scenario, where selling continues, we may see EGLD fall below $45. However, if the market returns to growth, we could potentially see the price of eGold rise toward the recent maximum of $54. The MultiversX project from Romania has a great reputation among crypto players, which is reflected in the recent partnerships that the project has initiated.

Market moves over the last 7 days

Limitation of liability

This report issued by Tradesilvania is purely informative and is not intended to be used as a tool for making investment decisions in crypto-assets. Any person who chooses to use this report in the process of making investment decisions assumes all related risks. Tradesilvania SRL has no legal or other obligation towards the person in question that would derive from the publication of this report publicly.

The information in this report was obtained from public sources and is considered relevant and reliable within the limits of publicly available data. However, the value of the digital assets referred to in this report fluctuates over time, and past performance does not indicate future growth.

Total or partial reproduction of this report is permitted only by mentioning the source.