Digital Asset Insights Digital Asset Insights #92

Have you wondered what is happening in the cryptocurrency market and how possible one could leverage the situation for one’s good? This newsletter is what you need to understand how the market has been and in which direction it is moving towards.

Bitcoin (BTC)

At the beginning of last week, Bitcoin price slipped 3% after setting up a local top at $21,473. This downswing was necessary to blow off steam after last week’s impressive upswing.

On Tuesday, Bitcoin price was down 11% on the day after the bears had reversed nearly all of a recent 7% upswing. On Tuesday, November 8, during US midterm elections, the peer-to-peer digital currency showed a surge of volatility on smaller time frames.

Bitcoin price auctioned at $18,900. The bears rejected the bulls’ first attempt to hurdle the 21-day simple moving average (SMA) after losing support during the overnight selloff. The Relative Strength Index (RSI) reached extremely oversold conditions during the last decline, hinting that the bearish force is genuine.

Bitcoin price slid 15% in the first three days of last week, sweeping the June 18 swing low at $17,593. This development put BTC at a critical point where recovery was only possible if it could climb above the $19,000 level.

On Thursday, November 10, Bitcoin price traded at $17,271. After a 25% decline on the week, the peer-to-peer digital currency produced a 14% countertrend rally. Bitcoin’s monthly RSI hovered just above the final level of support.

Going into the new week, Bitcoin price tagged the $17,592 resistance level after recovering from the crash witnessed three days ago. The king coin failed to move higher and is attempting another bounce from $16,762. A flip of the $17,592 hurdle into a support floor will indicate that the buyers are back. In such a case, market participants can expect BTC to trigger a recovery rally to $18,620.

However, if bears take control and the Bitcoin price slips below the immediate support level at $16,455, it will invalidate the bullish outlook. This development could trigger a panic sell from holders, catalyzing a crash to the $15,000 psychological level, tagged roughly two years ago.

Ethereum (ETH)

At the start of last week, ETH price saw traders quickly book gains and already erased most gains from Friday after the job numbers in the US. Experts expect to see another leg lower than $1,500 as equity futures in Europa and the US point to more losses. Technically, that would make sense after seeing the first rejection against the 200-day Simple Moving Average (SMA).

On Tuesday, Ethereum price rose by 10% during the US midterm election after suffering an overnight selloff similar to Bitcoin. The bulls produced strong bullish signals going into the election but have recently lost momentum. Ethereum price auctioned at $1,493. A subtle bullish divergence between lows catalyzed the 10% rally on the Relative Strength Index. As of Tuesday, last week, the ETH price was retesting the recently breached 21-day simple moving average.

On Wednesday, November 9, Ethereum price faced a brutal rejection by the twelve-hour demand zone, extending from $1,675 to $1,750. ETH shed roughly 26% in under four days and is currently retesting the range high at $1,280.

As the week came to a close, Ethereum price fights back. Ethereum price rallied 20% since the devastating liquidation occurred during the US midterm elections earlier in the week. Much like Bitcoin, the smaller time frames suggest ETH is in full control by the bears. However, the monthly chart suggests otherwise. According to the technicals, ETH is still fluctuating within a range, and the RSI is still within supportive terrain. Ethereum price auctioned at $1,288 as the price consolidated just below September’s monthly open at $1,350. Last week’s market sentiment witnessed an uptick in pessimism as top crypto exchange giant, FTX, witnessed a 90% loss of market value. The exchange was accused of irresponsible risk-on policies, which provoked their main competitor, Binance, to liquidate 2 billion dollars’ worth of the FTX token. Amidst the controversial selloff, Bankman-Fried recently promised to restore the FTX token and crypto investors to normalcy.

Going into the new week, Ethereum price declined and closed just below the short-term critical support level at $1,240 on November 13. The ensuing 3.1% rise brought the market value of the altcoin to $1,257. Maintaining recovery from here on will be difficult as the smart contract token will need the momentum to push through the $14,26 critical resistance. Only then will ETH receive enough strength to flip the resistance area, extending from $1,641 to $1,761 into support block. But if the broader market notes bullish cues and prices descend, ETH could be looking at a test of $1,000 or lower. Its June swing low stands at $919, which would be the last support before Ethereum breaks down.

Ripple (Ripple)

At the start of last week, Ripple price action saw its support coming under pressure as the sell-off continued on Monday morning, giving back almost all the gains from the previous week. That traders are pulling out that quickly is not good news. Seeing the element that European and US indices are on the back foot, expect this to weigh on XRP price action. More downside could be holding roughly another 8% of losses should the important supportive factor break and give way to the bears.

On Tuesday, Ripple price lost 20% during November as the digital remittance token fell penny-from-Eiffel style during the US midterms elections. Analysts believe if market conditions persist, XRP could lose grounds for the psychological $0.40 level. Ripple price traded at $0.42. The Relative Strength Index breached extremely oversold conditions suggesting that buying the dip could be problematic. The Volume Profile indicator showed a classic ramping pattern, hinting that more liquidations could occur.

Ripple price created multiple lower highs between late September and early November. This weakness was followed by a breakdown of the $0.466 support level, which led to a 28% crash. As a result, XRP price reentered the $0.336 to $0.466 range. As of Wednesday, Ripple price had bounced 16% and hovered below the midpoint at $0.401.

XRP price pulled off a 22% rally on November 10 after enduring a devastating crash similar to ETH and BTC. The bounce was catalyzed by a response to XRP’s first retest of the parallel channel’s median line since surging through the barrier on September 19. XRP price auctioned at $0.386. The recent downtrend spiked through the strongest bullish engulfing candle low at $0.34.

Going into the new week, Ripple price followed in the footsteps of Ethereum, shedding roughly 14% in three days after testing the resistance level at $0.38. Currently trading at $0.35, XRP is in the same consolidation zone as it was between June and September. If XRP was to reinitiate this movement, it is looking at sideways momentum building up until the investors create enough buying pressure to flip $0.38 into support. That would bring it back to the zone Ripple price stood at in October and November.

On the other hand, if the prices decline, the cryptocurrency could be testing the $0.29 support level. Invalidation of this level could bring XRP back to test its 19-month-old downtrend line at $0.26, which is its last support before the altcoin continues its downtrend.

Cardano (ADA)

At the beginning of last week, Cardano registered a 10.07% decline as prices reached $0.384. The last major rise noted by ADA was in mid-October for nine days when the price rose by 23.53%. At the time, Cardano was close to closing above the six-month-long support of $0.409 but failed to do so.

Cardano price painted a green candle on November 10, rising by 11.04% to trade at $0.352 after US inflation fell to 7.7% from 8.2% in October. This suggests easing liquidity conditions helpful to investors and a weaker US Dollar raising the price of most cryptocurrencies since it is in Dollars that they are priced.

The altcoin, like every other cryptocurrency, was caught in the crossfire of the Binance and FTX debacle, which led to the crash of the crypto market. After declining by 21.53%, ADA fell through its critical support of $0.330.

Going into the new week, the Ethereum-killer altcoin has lost favor with large wallet investors of Cardano. ADA price declined 5% overnight and yielded nearly 20% losses for holders over the past week. Based on data from crypto intelligence platform Santiment, there is a shift in the number of daily active addresses, weighted sentiment and number of stakers.

All these metrics witnessed a decline in October 2022. Daily active addresses on the Cardano network is an indicator of activity and traders actively trading the altcoin. The number declined consistently throughout October 2022. Over the past week, Cardano survived the FTX-liquidity crisis and crypto bloodbath. The altcoin was not listed on FTX exchange, therefore it didn’t witness a drawdown similar to Bitcoin and Ethereum. Despite that, the number of large wallet investors holding Cardano has steadily declined. A drop below $0.33 could invalidate the bullish thesis, and suggest that support at this level is weakening.

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