• The cryptocurrency market is trading up today, making it two straight positive days and ending the freefall from earlier this week, though not all assets are faring equally.
• After touching $45,000 yesterday, Bitcoin (BTC, Tech/Adoption Grade “A-”) is now trading just a hair under $50,000.
• Ethereum (ETH, Tech/Adoption Grade “A-”) seems to have found support at $1,600 but has struggled to push higher.
Bitcoin has been one of the best performers during this recent correction, as the King of Crypto found support at its 21-day moving average. It briefly fell as low as $45,000 on Tuesday, but it’s now trading around the $50,000 level.
We’ve mentioned that Bitcoin is in the midst of a long-term bull move, but now the short-term outlook may be turning bullish as well. The latest retest of the moving average shows the bulls still have bullets left in the chamber, and a move to new all-time highs from here is very much in the cards.
Here’s BTC in U.S. dollar terms via Coinbase:
Ethereum hasn’t been performing too well this week after dropping below its 21-day moving average on Tuesday.
The good news is that it seems to have suspended its freefall and found a floor at $1,600. The bulls will regain control if they can push ETH above its 21-day moving average around $1,800.
Here’s ETH in U.S. dollar terms via Coinbase:
Litecoin (LTC Tech/Adoption Grade “B-”) is another asset that fell below the key 21-day moving average on Tuesday. But LTC’s fall wasn’t as dramatic as those of other assets.
Litecoin fell to around $180 on Tuesday and remained there on Wednesday before finding some energy and pushing its way up to $195 today.
LTC is right on the cusp of crossing back above its 21-day moving average, though that level is acting as resistance right now. A move above that metric will keep the bears at bay.
Here’s LTC in U.S. dollar terms via Coinbase:
Let’s follow up on yesterday’s analysis of Cardano (ADA, Tech/Adoption Grade “B-”).
As you might remember, ADA held up fairly well during this week’s market selloff, never crossing below its moving average. It did fall from its high above $1.20 on Feb. 20 to a low of near 80 cents very briefly.
Yesterday, it rose almost 10% to right around $1.05 and has followed that today with another gain of about 8%, trading around $1.13 as of this writing. That’s a drop of only 8% from the recent highs. The bulls are definitely still in control of Cardano, and we could soon see new highs.
Here’s ADA in U.S. dollar terms via Binance:
Notable News, Notes and Tweets
• Grayscale, the world’s largest crypto asset manager, took advantage of the dip and added 10,000 ETH to its holdings.
• In a legendary example of Bitcoin HODLing, 100 Bitcoin just moved from a wallet that had been dormant since 2010. That means they held 100 Bitcoin worth about $0.08 apiece in 2010 until today when they are worth a collective $5 million.
• A digital artwork non-fungible token (NFT) from Beeple just sold for $6.6 million in ETH.
• Bill Gates, apparently missing the point, thinks Bitcoin only makes sense for the uber-wealthy …
What’s Next
Many old-school investors have a hard time grasping the potential volatility of cryptocurrency markets.
A 20% drop in traditional markets is thought of as a bear market. However, crypto markets move much faster than their traditional counterparts, and 20%, 30%, even 40% price moves can take place during a crypto bull market. Down moves are usually very fast, and recoveries can be just as sudden.
This week, we witnessed a 20% retracement. We’d been warning this was likely, anticipating a short-term pullback. For now, our analysis seems to have been confirmed, as the market quickly found its bottom and has seemingly stabilized since.
Of course, this being crypto, there’s still risk for further downside. But the main thing to remember is that we’re still in a larger bull cycle, and any weakness will be temporary.
We fully expect another full year of bullish action. Weeks like this are par for the course.
Best,
Alex
