Weekly crypto market analysis (17 - 23 April)
The crypto market has undergone a week of significant corrections, the first such period since the beginning of March, with most digital assets suffering declines of over 10%.
These declines came against the backdrop of deteriorating investor sentiment in international financial markets, where fears of persistently high inflation and prospects of a potential global recession in the second half of the year caused stock markets to have their weakest week in recent times. This reaction influenced the crypto market, where, in addition to the macroeconomic factors, pressures from US financial supervisory authorities were once again felt, authorities who reiterated their intention to regulate the digital asset market as strictly as possible.
In this unfavourable context for risk assets, BTC fell below the level of 28,000 USD and ETH returned below 1,900 USD.
Among the important coins, consistent withdrawals were seen on ALGO (-18%), NEAR (-17%), UNI (-14%) or ADA (-13%). The total capitalization of digital assets fell to around 1.15 trillion USD.
BTC suffered a decline of approximately 10% in the last week. At the beginning of the week, Bitcoin was trading at levels above 30,000 USD, but over the following days, the most important crypto asset gradually fell below the level of 28,000 USD.
Sales were driven on the one hand by the negative influence from stock markets and on the other hand by the speech of the Chairman of the US Securities and Exchange Commission - SEC, Gary Gensler, who reinforced the American authority’s position on imposing strict rules and regulations on players in the crypto industry.
Technical analysis shows a potential ascending channel pattern, whose evolution began in January and propelled BTC to 30,000 USD.
If this technical pattern is confirmed, we could see BTC continuing its correction to around 26,000 USD, where we have the lower band of the “channel” and confluence with the 200-week Moving Average. Then there could be a re-entry on an upward trend and we could see BTC above 30,000 USD again.
Of course, this scenario must be validated by fundamental events in the crypto market and also not to be neglected is the influence of activity on international stock markets as we have observed so far.
ETH had a decline of over 10% in the recently ended week, with the price returning below the level of 1,900 USD.
In addition to the elements that influenced the decline of the entire crypto market, in the case of ETH we can talk about sales of tokens released from staking following the Shanghai (Shapella) upgrade.
Many of the platforms that offer staking services on ETH had a processing period of 5-7 days for withdrawals, so those who wanted to sell their ETH released from staking could not do so immediately after the implementation of “Shanghai”.
Selling pressure brought down the price of ETH to where it was trading before the “Shanghai” fork.
In the case of Ether, we can also talk about an ascending channel pattern in technical analysis, similar to BTC. If this pattern is validated, then a rebound in price that could take the Ethereum network token to around 2,200 USD is not excluded. However, in the scenario where the above pattern does not materialize and ETH falls below the lower band of the channel, we could see the 1,500 USD area tested again.
EGLD did not deviate from the generalized declines of the market and we saw the MultiversX network token falling to the level of 39 USD.
eGold has oscillated in the last 7 weeks in the range between 38-45 USD, without establishing a clear price trend, compared to BTC and ETH, which have formed ascending directions.
In the longer term, from August 2022 to present, we see that EGLD has formed “lower highs” - highs at lower levels than previous ones - so we cannot yet speak of a categorical reversal of the multi-month trend.
In order not to visit the lows of 32 USD again, it is necessary for the 38 USD area to withstand the downward pressure and provide consistent support. A rebound upwards from here is not excluded, considering the evolution given by the last 7 weekly “candles” on the chart, but for this it is necessary for the general situation in the market to improve.
As we mentioned, EGLD does not seem to have formed an explicit trend in recent weeks, so either direction can be considered in the coming period.
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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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