Technical indications, market sentiments, and much more to understand how the two largest cryptocurrencies by market cap have performed amid economic tensions and where they are (expected to) headed.
After dancing to the tune of global events for almost two weeks, cryptocurrencies have finally started to form green candles on the chart. The global crypto market cap is up by 25% since last week as it grew from $1.52 trillion to $1.89 trillion.
During the same period, Bitcoin observed a major price action and climbed $10,000, while Ethereum gained more than $400. On the other hand, both cryptocurrencies have also managed to outperform S&P 500 and Gold, indicating that the industry has decoupled itself from the stock market and has the ability to serve as a safe-haven asset in tumultuous times like the ongoing political and economical uncertainty.
As crypto bouncebacks and recovers losses, we take a look at how the market is expected to perform in the coming days.
Since the announcement of war, Bitcoin price has been highly volatile, ranging from $34,000 to $40,000. However, in the past two days, the cryptocurrency has shown incredible strength and managed to gain more than 17% over the last week, and is currently trading at $43,915. With the surge, Bitcoin now stands at 14th position in the global ranking of currencies, surpassing the Russian Ruble which is experiencing a resounding crash due to the country’s economic unpredictability.
Bitcoin’s price rally has also outperformed traditional stocks like S&P – which is up by 2% and gold – which is up by 1.78% since 23rd Feb, whereas BTC is up by 17.12% during the same period.
Two popular reasons have surfaced for Bitcoin’s extended amid the Ukraine-Russia war:
1. Spiked Whale Addresses: Data by Glassnodes suggests that the BTC addresses containing 100 BTCs and 1000 BTCs have skyrocketed in a short period of time.
2. Reduced Bets on Aggressive Rate Hikes: A part of the reason Bitcoin took a hit in recent days was due to the fears of aggressive Fed rate hikes. However, new sanctions on Russia raised concerns over the impact on worldwide growth and inflation, indicating that a high rate increase is less likely to happen, as shown by the co-host of Bloomberg Surveillance.
The repricing of the Fed outlook has again put Bitcoin under the category of safe-haven assets as the ongoing war intensifies.
What Investors Should Know
Bitcoin’s price is now trading above $43,500 and the 50-hour simple moving average (SMA), indicating an expected upward movement. Technical indicators like RSI and Bollinger Bond also suggest a similar price action as the week progresses.
However, the cryptocurrency is facing the first key resistance at $42,000, which if cleared, can send Bitcoin to test $44,500 – another resistance level. In the case Bitcoin clears the resistance at the $44,200 level, it could approach the weekly supply zone, extending the asset to $51,860. But, this push will require massive buying pressure and is unlikely to happen.
On the other hand, if Bitcoin fails to go above the resistance level, it could start a downside correction; first near the $42,748 level and then to $41,700. A higher retrace could also send BTC near $37,030.
Therefore, in the short run, investors can expect Bitcoin to go down to its weekly support level anywhere near $42,000. The long-term outlook shows a bullish trend that could trigger the price of Bitcoin close to $52,000.
After hovering in the $2,600 range throughout the week, Ethereum has finally observed a multi-week high of $3,092, almost 20% higher than weekly’s low of $2,590, indicating that the bulls are in full force. Like Bitcoin, Ethereum has also outperformed the traditional stock market.
Source: Yahoo Charts
Today, Ethereum has followed a breakout at the $2,882 resistance that has been resisting the price since February 19. Along with that, a break occurred with the 14-day RSI when the cryptocurrency raced past the 47.9 level and is currently tracking at 56.
The newfound momentum is more likely to push Ethereum past its crucial $3200 level. Another bullish indicator for Ethereum is the growth of active Ethereum addresses. In the past week, active Ethereum wallets have also increased from 755.72k to 798.293k, up by 5.6% since February 22.
The technical indicator shows that after forming a new high, Ethereum has cleared the $2880 resistance level and the 100-hour SMA, and is now consolidating gains by trading above the 23.6 Fib retracement level.
Source: Yahoo Charts
What Investors Should Know?
Ethereum is now facing a major resistance; first at the $3040, and then at the $3,120 level. A clear move above this level could trigger a price rise towards the next major resistance level at $3200. If it fails to clear the first resistance, Ethereum could go down towards the immediate support level at $2850. On a further downtrend, we can see the cryptocurrency moving towards the $2800 level and the 100-hour SMA.
However, considering the four-hour chart, Ethereum has accepted a further upside at $3000 and is trading above 100-hour MACD, indicating that the cryptocurrency might set another high later this week.
Amidst the ongoing conflict between Russia and Ukraine, cryptocurrencies are prominently being used to help both countries. While the Russian government is planning to utilize them to bypass sanctions, Ukraine is accepting Bitcoin, Ethereum, and other digital assets as donations to support the country. This sudden interest has shined a spotlight on cryptocurrencies, triggering a spike in their price.
Bitcoin and Ethereum are some of the top contenders with maximum gains, and as the world continues to pour millions into cryptocurrencies, we can expect even more hikes in their prices.