RekTimes Weekly Markets
27 March 2022: The cryptocurrency market has reached a critical price level as the market itself attempts to break through resistance at $2 trillion USD. Sentiment has turned overall bullish over the past week as many assets have risen in price upwards of 6% and higher. Hype is continuing to build for the coming Ethereum deployment of Proof-of-Stake.
Outside crypto, the Russia - Ukraine War continues on with each passing week further legitimizing the possibility that the war escalates. Russian President Vladimir Putin has reportedly made comments suggesting the potential use of chemical weapons in an attempt to break through Ukrainian lines in key cities. This has warranted a response from the US & NATO.
In a rush? Here are this week's key takeaways:
- Talks of NATO intervention increase with Russian threats of chemical weapons
- Crypto market looks to break into a sustainable bullish uptrend
- Anticipation continues to build for Ethereum V2 PoS
Top Headlines
Bullish sentiment is full on for the cryptocurrency market. Protocols such as Terra have been making big moves with reports that Terra has raised over $2 billion USD worth of Bitcoin to support its stablecoin UST. Ampleforth has also announced the coming development of an AMPL-backed decentralized stablecoin to service DeFi. Ethereum's move to Proof-of-Stake is coming up soon too, prompting heightened excitement for investors within the Ethereum ecosystem.
NATO recently had an 'emergency summit' in which all participating heads of state met in Brussels to discuss a response to Russia's invasion of Ukraine. Following the summit, NATO put out a statement that outlined how the alliance intends to move forward.
In response to Russia’s actions, we have activated NATO’s defence plans, deployed elements of the NATO Response Force, and placed 40,000 troops on our eastern flank
NATO has also announced the intention to establish new "battlegroups" within the following nations:
- Bulgaria
- Hungary
- Romania
- Slovakia
Considering that Russia and Belarus are completely aligned in the conflict, this shows the growing involvement of outside parties to the war. Talks of chemical weapon deployment and a potential US-led response directly against Russia could quite literally spark a new global war.
Of course this is speculation based on rhetoric from Russia and should be treated as such until facts are laid out to directly support these claims.
Further Reading - In the Know
-
Thailand Outlawing Crypto Payments (Cnet)
-
El Salvador struggling to sell Bitcoin bonds (Reuters)
- Thread on cryptographic truths (Twitter / Chainlink)
- What is Ethereum 2? (Decrypt)
Crypto-Economy & Markets
The cryptocurrency market is currently looking to break through resistance at $2 trillion USD in what would be a massively bullish move.
Additionally, market sentiment has reached the status of neutral, up again from last week.
The full Fear & Greed Index chart is shown below:
Total Market
The Crypto Total Market Cap has bounced and broken back through the 50 day moving average level on the weekly chart. A hold on the weekly above the 50 DMA would be massively bullish for the entire market.
It should be noted that on the daily chart, the crypto market has met elevated resistance at the 200 DMA. For a weekly close above resistance over the next week, the market needs to break through daily resistance at the 200 DMA.
The Crypto Total Market Cap is shown below:
Bitcoin
Bitcoin has had a nice run up above the 50 DMA and hit resistance at the previous bottom support level of the 2020 bull run. Though Bitcoin has risen to over $46,000 USD, a rejection off this level could indicate Bitcoin has entered a new lower range.
Alt Coins
The altcoin market (total crypto market cap minus Bitcoin) has had a smaller run than the market cap including Bitcoin over the past week. With Bitcoin attempting to break through key resistance, movements on altcoins will all depend on the action of BTC.
The total market cap, minus Bitcoin, is shown below:
Total Crypto Market Analysis
The moment of truth has arrived for crypto markets. Bitcoin and Ethereum undoubtedly are leading the way, especially in this latest uptrend. How sustainable this run is will depend entirely on the next week of market action. The Total Crypto Market Cap is at major resistance on the daily and is not in a confirmed bull trend on the weekly yet.
With the war in Ukraine looking to escalate and themacroeconomic environment of the globe still extremely uncertain, do not underestimate the power of a few negative headlines (about Ukraine or elsewhere) to cause a sharp decline in the crypto market.
Those who have been dollar cost averaging (DCAing) over the past several months are set up nicely to benefit from a major uptrend here, though are situated in an effective position to manage a decline as well. Keep an eye on the market for an emerging direction over the next 72+ hours.
Summary
There is no denying the increasing uncertainty within the global macro environment. With inflation running rampant in established societies around the world and the conflict in Ukraine continuing to escalate, the global economy appears less stable than ever.
If interest rates continue to increase over the next several months to years, that severely impacts growth sectors that have benefited tremendously from generous central bank support for the better part of a decade. These trends eventually have to come to an end, especially considering the massive impact on cost of living.
The golden question here is whether cryptocurrencies do serve as an alternative system as intended or whether they decline along with other asset classes. A direction could be found within the next week.
Coming RekTimes Articles:
- Article covering Ethereum PoS
- Article on MakeDAO changes
- RekTimes Weekly Markets 1.29
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