BTC appears to be in an accumulation zone near the $38,000 region.
Bitcoin (BTC), after multiple failed attempts to reclaim $45,000, has retracted back to the sub $40,000 levels. With investors worried about the ongoing Russia-Ukraine conflict and a possible US interest rate hike, the market sentiment has dampened further as COVID-19 cases surge in China. However, some traders view the current situation as a buying opportunity evident from the 20% upswing in total crypto trading volumes from the previous day. The crypto assets market capitalization currently stands at $1.72 trillion. In this article, we analyze the price actions of major crypto assets and the short term outlook for Bitcoin.
Bitcoin in consolidation
For the past two months, BTC appears to be in a consolidation mode between $35,000 and $45,000. Though BTC has lost major support levels above $40,000, the $38,000 region has been holding strong with occasional swings to $36,500. On the upside, the $39,600 level has to be reclaimed and subsequently $40,600 in order to move towards the major resistance zone at $45,000. On the downside, the wicks at $34,300 and $32,900 that were formed recently will come into play if the bears gain more advantage. BTC is currently trading at $38,700, more or less at the same price it was trading a week ago.
Mixed performance by altcoins
Ethereum (ETH), the second largest crypto, could not find enough buyers to take advantage of the sideways movement of BTC though ETH looks to have bottomed out near the $2,500 region for now. ETH will enjoy a confluence of support coming from the support line of a symmetrical triangle pattern and horizontal level near $2,500. However, if BTC were to exhibit high volatility, then ETH might visit the critical $2,100 region. On the upside, if the bulls can push enough, $2,650 and $2,800 are the next targets and ultimately $3,000 will be the major resistance to overcome. ETH is currently trading at $2,530.
Terra (LUNA), Thorchain (RUNE), Monero (XMR) and Zcash (ZEC) were some of the crypto assets in the top 100 list by market cap to have registered a double digit growth this week. LUNA has been consistently outperforming the rest of the market as the demand for its UST stablecoin grows while offering a high interest payout (up to 19.5%) on Anchor protocol (a DeFi platform).
XMR and ZEC, privacy coins which enable transaction details to be masked from the public, are also having a rally due to the narrative that global assets can be rendered ineffective amid geopolitical uncertainty. RUNE, the token behind the cross chain DeFi platform Thorchain that allows investors to swap crypto assets, saw a whopping 80% gain in the last one week. The price surge is attributed to new updates like creation of synthetic assets which lets users to create derivative versions of BTC and ETH, the creation of new stablecoin called THOR.USD which is expected to leverage a similar mint burn scheme seen by Terra’s decentralized stablecoin, UST.
Short term outlook on Bitcoin
From a macro perspective, BTC has been holding well against macro economic factors like Russia-Ukraine conflict and the COVID-19 surges. While some of the analysts state the US Federal reserve’s decision to hike the interest rates has already been priced in and the downside is limited, the possibility of a macro event that could affect the financial markets drastically is still at play. The accumulation pattern exhibited by BTC is seen as a positive sign and bodes well with the drop in BTC across exchanges data according to CryptoQuant. The market participants can evaluate the risk tolerance and try dollar cost averaging (DCA) into Bitcoin between $30,000 and $38,000 levels.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.
