September 4, 2021
Cryptocurrencies: Weekly Update
It’s been an exciting week of all-time highs and major moves in the large-cap cryptocurrency market, bringing the overall sentiment of the market even higher as both retail and institutional cash flood back into the market. Over $150 billion entered the crypto market over the last 7-days, with the overall market cap now at nearly $2.3 trillion
Areas to focus on from this week...
Biggest Winners: Large Cap Decentralized Finance Coins (ETH, SOL, ADA)
Biggest Losers: Bitcoin dominance (41.5%)
What to watch: XRP lawsuit, Vast Bank news, Institutional investments, Crypto Mining Stocks
Included above is an hourly chart of Bitcoin (BTC) and Ethereum (ETH) using the RealMotion indicator to identify buying opportunities during short term accumulation patterns that follow oversold mean-reversion signals. Momentum is crucial in the crypto market because as you can see, the top coins tend to move together even with ETH’s 20% gain over the past 7 days being far more significant than BTC’s 3% rise in price. The two largest cryptocurrencies' long-term trends remain similar, but there are clear chances for shorter term traders to make a profit from intraday divergences.
Following Ethereum’s strong performance on the week, other large cap DeFi projects like Cardano (ADA) and Solana (SOL) have continued to hit more all-time highs. Solana grew by 50% from $94 to $141 over the past 7 days, and Cardano is currently up over 2% on the week after topping out at $3.10 and currently sitting around $2.87.
Heading into a short trading week for the stock market next week, expect to see increased volume in the crypto market on Labor day as savvy investors will still be trading the 24/7 crypto market. Look for Bitcoin to settle above the $50k level with the next major resistance level around $55,000 as long as price can stay above the 200-dma. It wouldn’t be surprising to see Ethereum and the altcoin market cool off for the beginning of this week as they accumulate at higher prices with ETH needing to hold above $3,700.
If you are investing in cryptocurrencies through the stock market and publicly traded companies that have exposure to the crypto world, keep an eye on cryptocurrency mining stocks. Most crypto mining stocks are traded OTC, are relatively affordable in the $3-$15 range, and are one of the purest crypto/blockchain plays available in the stock market. Companies like Bit Digital (BTBT), Hut 8 Mining (HUT) and HIVE Blockchain (HVBT) are each up at least 44% over the last 20 trading days, and are worth keeping an eye on as the cryptocurrency market keeps improving.
Lastly, market sentiment in the news continues to improve each week even with the uncertainty of regulations from Gensler and the SEC looming. With the continual increase in institutional investment from international mega corporations and the rapidly growing involvement of retail investors around the world, many are turning a blind-eye to the threat of regulations as they believe that this industry is already too big of a beast to kill with one blow.