Weekly crypto market analysis (13 - 19 Mar)
Crypto Market Evolution
The crypto market has experienced one of its most volatile weeks in the past year. Major macro events have rapidly unfolded, causing radical changes in sentiment among digital asset investors. The previous weekend saw the financial world reeling from the shock bankruptcy of Silicon Valley Bank. This event triggered panic in markets and led to significant declines across all investment assets. On Sunday evening, March 12th, information emerged that the US Federal Reserve would cover all deposits at this bank so that no depositor would suffer losses. This news stabilised financial markets on the first day of the week and we saw a spectacular recovery of risk-sensitive assets, particularly in the crypto market. Within two days, major cryptocurrencies had risen by over 20%.
The upward momentum was tempered mid-week by another potentially negative news story: Credit Suisse’s ongoing capital withdrawal issues. Markets reacted negatively once again with declines returning, in all the markets. Nevertheless, on the digital asset market these corrections were short-lived and cryptocurrencies resumed their upward trend after new data showed a decrease in US consumer price index inflation. This decrease could cause the Federal Reserve to reduce its pace of monetary policy interest rate hikes, a strategy welcomed by those anticipating a return of the bull run in the crypto market. Additionally, yesterday’s end seems to have closed the Credit Suisse chapter with a positive effect on the crypto market, at least in the short term.
After all these macroeconomic events and important news stories, we find ourselves with the crypto market at its highest levels in 9 months. Bitcoin is hovering around $27,000-$28,000 while Ethereum is at approximately $1,800. The total capitalization of digital assets has consistently risen and closed the week near $1.2 trillion - a level last reached in August 2022.
Bitcoin had its best weekly performance in the last 12 months with a price increase of over 30% from its level on Sunday, March 12th - from approximately $20,000 to the $27,000 - $28,000 range.
This increase can be attributed to the US Federal Reserve’s intervention in the problematic situation at Silicon Valley Bank (SVB), a bank favoured by both tech startups and many crypto companies. In addition to covering all SVB deposits, the Federal Reserve injected a record amount of liquidity into the financial market to help banks weather this period of shaken confidence in the banking system.
As a result of this shaken confidence in traditional banking systems, some analysts believe that Bitcoin’s recent appreciation is also due to significant migration towards the crypto segment. This is seen as an alternative to traditional finance due to blockchain technology’s decentralisation characteristic. Thus, BTC convincingly rose above the important $25,000 range - a level it had attempted to cross twice in the last 9 months. We have a new recent high for BTC above $28,000 and its graphical evolution pattern gives hope for entering into a new long-term bull market.
BTC price is above its 200-week moving average and if it manages to remain above this level in the coming weeks, we can reasonably estimate that the upward trend will continue. However, a re-test of the $25,000 zone is not excluded given that after breaking through important graphical zones, prices tend to return to that level before resuming their upward movement.
Additionally, tensions in international financial markets are still present even with the recent resolution of Credit Suisse’s situation. Furthermore, a Federal Reserve monetary policy meeting is due in the coming days - an event with the potential to create market volatility in either direction.
ETH has risen over 20% from its level the previous weekend, even reaching $1,800 during the recently concluded week.
The euphoria in the crypto market led to significant purchases across most crypto assets and Ethereum was no exception to these increases which pushed its price above recent highs.
From a technical analysis standpoint, Ethereum’s token has broken out on an upward trajectory from the zone it had fluctuated in over the last 8 weeks. If prices remain above $1,700 and there is a generally positive sentiment in the market, ETH could be on track to reach $2,000 - its highest level in 8 months.
Increased attention should also be paid to macroeconomic events in the coming period as potential turbulence from this sphere could impact developments in the crypto market.
EGLD (MultiversX) has returned above the $40 level on the back of an approximately 20% appreciation from its level seven days ago.
The general market momentum has affected all top 100 crypto assets and beyond with EGLD positioned on an upward trajectory that pushed its price close to $47 during the recently concluded week.
Unlike BTC or ETH, eGold had a much stronger correction two weeks ago. As such, even though we have seen significant increases in recent days, we are still at a considerable distance from this year’s highs in the $55 range. If the positive momentum continues and the market as a whole experiences significant appreciation, we can hope for EGLD’s price to return to the $50 range.
In the scenario of corrections due to tensions in international financial markets, a drop in eGold below the $40 range is not excluded.
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.
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