February 14, 2022
Cryptocurrencies: Weekly Update
By
If you watched the SuperBowl or even just a little bit of the commercials, you likely saw at least one ad mentioning cryptocurrencies.
Coinbase paid $17 million for a 60 second commercial of a QR code bouncing around the screen, Crypto.com had Lebron James telling his younger self not to miss out on this opportunity, and FTX aired an ad with a skeptical Larry David questioning the whole crypto movement.
Although the Larry David spot was absolutely hilarious (watch the commercial here), it was a bit disappointing to see that all of these crypto exchanges were advertising with the angle of trying to induce FOMO (Fear Of Missing Out).
As much as we love the emerging cryptocurrency industry and the mainstream potential for blockchains and Web3, we don’t condone trading cryptos until you’ve taken the time to actually research and form your own opinions on the industry.
Nonetheless, it was extremely encouraging to see the topic of cryptocurrencies mentioned so prevalently in one of the most viewed TV events of the year.
With celebrities, athletes, politicians and multinational corporations continuing to adopt and promote cryptocurrencies, the mainstream demand for digital finance and crypto just continues to grow.
The past week wasn’t the kindest for the crypto market, with essentially everything selling off despite maintaining recently established trading ranges. Altcoins got hit especially hard, with over half of the top 50 coins by market cap showing double-digit percent losses over the past 7-days.
However, Bitcoin (BTC) -0.8% proved to be remarkably flat on the week with the coin’s least extreme weekly performance since September 2020 (+0.77%).
Don’t take Bitcoin’s flat week for granted, because BTC happens to be sitting at a very crucial support level that frankly, cannot be lost…
It is a sight for sore eyes to see BTC regain and maintain support above its 50-day moving average for the first time since November. Currently trading at $42,670, Bitcoin has to hold $41,600 or risk further downside to the sub-$39,600 trading range.
However, if BTC manages to regain its 10-day moving average in the next few days, expect a retest of $45,500 resistance with the potential to even make a run for the psychological $50,000 level.
Our other crypto market benchmark ETH was not nearly as neutral as BTC last week, marking a -6% loss on the week. Ethereum also tried and failed to reestablish support above its 50-day moving average, forcing the selloff in the short-term.
More bad news for ETH is that it is currently trading back within the very top of the negative 2-month trading range established at the end of November. Currently trading just below the $3,000 level, let's look for ETH to maintain the $2,790 support level.
Some optimists are also pointing to a potential inverted head and shoulders bottom on ETH, which may be possible if local support isn’t lost in the short-term.
Depending on your risk tolerance, now may be a good opportunity to add to long term positions in your favorite altcoins.
However, with ambiguity regarding how the Russia/Ukraine situation will continue to unfold, pressure is mounting in all global equity markets.
If you do choose to probe a trade in the cryptocurrency market this week, be sure to use risk-management as we continue to monitor the market.
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