Weekly Bitpanda Pro market recap #53

Highlights of the week:

• Sideways action in the crypto market while the FED announces new rate hike

• Bitcoin on an ascending trendline since January

• The Crypto Fear & Greed index still at “extreme fear”

• Altcoins following Bitcoin, showing signs of bottoming

Sideways action in the crypto market while the FED announces new rate hike

The financial world is seeing the effects of the war in Ukraine, now at the end of its third week. The general sentiment is rather negative, and there’s speculation that war isn’t going to stop soon. Bitcoin and the broader market saw mostly sideways movements, with prices showing volatility due to both news and market sentiment changes. 

In the past week, three news in the financial world took frontstage: Biden's executive order on cryptocurrency regulations, the U.S. Federal Reserve’s announcement on increasing interest rates, and the European Parliament’s Committee on Economic and Monetary Affairs vote against a potential ban on Proof of Work cryptocurrencies in the Markets in Crypto Assets, or MiCA, proposal. The latter news brings relief to the crypto industry, which was keeping a close eye on the proposal when a potential ban was brought to discussion, as it could have effectively banned PoW-based cryptocurrencies in the European Union.

On Wednesday, the FED announced it would raise the interest rate by 25 basis points: it is the first time since 2008 that the FED has raised the interest rate by this much. However, traders welcomed the decision as bullish, as they were expecting the rate hike to be way higher. Therefore, the news had a positive short-term effect on the stock market, on Bitcoin’s price and overall on the broader markets.

Bitcoin on an ascending trendline since January

Bitcoin has been on an ascending trendline since January 22. The line has been validated numerous times, but not yet broken. Technical indicators are mixed and are more or less in a neutral position, indicating predominantly range trading. Major altcoins have been moving in a similar pattern and are likely to be waiting for BTC to dictate the direction of the crypto market.

For now, Bitcoin failed to overtake the €38,000 level, but is still maintaining a higher-low pattern, meaning the bullish momentum is still in play. In the majority of time frames, technical indicators are neutral. The RSI and MACD technical indicators are close to 50 and 0 respectively, values that are considered signs of a neutral trend.

The Crypto Fear & Greed index still at “extreme fear”

During the past seven days, the Crypto Fear & Greed index has been showing signs of extreme fear and is now at 25/100, still reporting a fearful market sentiment, but slightly improved compared to the 21/100 of Tuesday.

Investors don’t seem confident in the market, but the selling pressure has decreased, leaving space for a hold-oriented approach. Historically, buying during periods of extreme fear has generated positive returns, and better gains than selling in the same market conditions. The index is not a perfect timing indicator of when to buy or sell. Instead, it offers an outlook on when the price of Bitcoin is recognised as low or high. 

The Russia-Ukraine war has surely contributed to the highly pessimistic sentiment in the crypto market and the rate hikes announcement by the FED has added to the bearish sentiment - even though investors were expecting worse news, thus the initial bullish acceptance, the higher interest rates ultimately worsened the overall market sentiment.

Altcoins following Bitcoin, showing signs of bottoming

Most altcoins are following Bitcoin’s movements and are trading in narrow ranges. 

XRP failed again to break the upper resistance level at €0.77 and is now sitting on major moving average support levels. The choppy action will most likely end with a breakout from these important levels.

Ethereum is trying to break out from its trendline resistance level of around €2,500. Over the last few days, ETH has been trading sideways and inside of a triangle pattern on the daily chart. The ETH price has met intermediate support at €2,270, while the descending trendline is forming a resistance. If it wants to form a bullish momentum, the price needs to break out from the trendline resistance.

IOTA is moving just under the descending trendline and inside a triangle pattern on the daily chart. The price tested its support at €0.62 several times, but it was unable to turn the resistance trendline into a new support level. The RSI momentum indicator is slowly picking up, but it is still below 50.

LINK surged above its trendline resistance on the daily chart after a bullish action. The price moved above the 13- and 20-day moving averages, a sign of bullish momentum.

ADA is showing signs of bottoming out after several weeks of price decrease. Cardano bounced from the €0.72 support line and created large candle wicks, suggesting buyers are very active on this level. However, indicators are still in bearish territory.

ADA’s price has been underperforming in recent weeks, but Cardano’s ecosystem continues to expand. Currently, over 517 projects are being built on Cardano, of which NFT collections are the biggest share (34.7%). 

The total value locked in Cardano’s network has been surging, now standing at around €190 million. The Vasil hard fork, named after Cardano’s founder Charles Hoskinson’s late friend Vasil Dabov, is scheduled for launch in June and it sets out to bring a multitude of scaling improvements for DeFi, DEXs, and smart contracts on the network.

Have you been following the price developments of Bitcoin or the smaller caps’ formations and want to act on the market moves on the go? Make sure you trade using our Bitpanda Pro iOS and Android apps. For a convenient trading experience from your computer, you can also rely on the traditional Bitpanda Pro crypto exchange.

Disclaimer

This content is for informational purposes only and is not to be taken as financial advice. We highly recommend taking the time to do the necessary research before making any investment. Be aware that past performance is no indication of future results.