Yet another rough week for the cryptocurrency market, down over 7% on the week. Many are saying that this negative price action is a result of global economic stress, but things still seem to be looking up for crypto… at least for now.
As of Sunday evening, Bitcoin (BTC) seems to have made a little bounce back above $57,000 after sitting near support at $53,750 almost all week. To add to the positive bounce to end the week, Bitcoin has still maintained its longer-term weekly trend with the path to $80,000 still within sight.
As we start the new week, it is important to keep in mind that there hasn’t been 3 consecutive red weekly closes for Bitcoin since June of 2020. Hopefully we’ll see this trend continue with a big green bar this week.
Other events this week...
Biggest Winners: Metaverse cryptocurrencies had the strongest week of any sector, with industry leaders Decentraland (MANA) +44% and Sandbox (SAND) +94% on the week. Blockchain gaming project Gala (GALA) also got a ton of love this week, up +91%
Biggest Losers: Unlike the cryptocurrency market, metaverse stock plays such as Facebook and Zoom did not weather the week’s selloff. In the crypto space the biggest losers were large cap DeFi’s. Ethereum (ETH) currently looks to be leading the late Sunday night market rally, so it could be an exciting comeback for DeFi coins this week.
What to watch: The 2 biggest variables that could cause a continued crypto market selloff right now are global inflation rates and global Covid lockdowns. Many are waiting to see if Bitcoin and cryptos can really hold up as an inflationary hedge like Gold historically has. The pandemic has actually been good for the crypto/blockchain space thus far, so the potential for further global lockdowns this winter has me thinking that people could be working from home and back to trading in their free time again very soon.
As I mentioned above, Ethereum is currently leading the recovery across the crypto market. Having already recovered its 50-day Moving Average (dma), ETH looks to be much stronger than other big players like Bitcoin at the moment. During the last 2 weeks of selling, ETH never lost support of the psychological $4,000 level, while BTC tumbled below its $60,000 support.
Cardano
Solana is right on the verge of reclaiming its 50-dma, Bitcoin is currently above its 10-dma, but Cardano (ADA) is in a full bearish phase. This may be a make or break opportunity for Cardano, as several recent events are working against the project.
This week ADA tanked -12.5% to as low as $1.41 despite having just made new highs at $3.10 in September. Bad news got worse when mainstream crypto platform eToro reported they would be delisting ADA from their exchange, an apparent surprise to Cardano’s founder Charles Hoskinson.
As the crypto/blockchain community waits for Cardano to follow through on it’s smart contract development and promised network upgrades, others like Solana, Polkadot (DOT), and Avalanche (AVAX) have filled the market demand for DeFi projects.
ADA has become oversold on momentum according to RealMotion, but is still within the lower bollinger band on price and not yet confirmed as oversold. This week may tell whether Cardano will recover with the market, or continue to tumble.
If I were a betting man I would say that one strong news event or tech announcement could see ADA go up 50% in an hour, but I truly don’t know what that would be. The project has gotten bashed within crypto communities for months for simply being obsolete as a technology and unpopular by users in general.
In fact, of the top 25 coins by market cap, Cardano is the only coin other than Uniswap (UNI) that is negative across the past 7, 30, 60 and 90 days.
If we do in fact see a market recovery this week and ADA looks to still be lagging, it may be time to start considering what you want to do if you’ve been a long time Cardano holder.
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