Weekly Crypto Market Report: Feb 28 - Mar 06, 2022 - BTC, ETH, LUNA, SOL & More
Market Fundamentals Analysis
The collective crypto market cap is down 130bps today after the broad market surge pushed its value to over $2T for the first time since August 2021. Currently, we’re sitting not-so-comfortably, only about $50B away from dipping back into $1T territory.
After a choppy weekend trading session, BTC continues to undulate across the C$49k mark while ETH is flirting with C$3.25k - a level that seems to have become a stiff resistance for the asset now. Overall, sentiment seems mildly bullish, though, with sidelined capital beginning to creep its way back into the market.
A less hawkish Fed has also pushed the odds of a 50bp March rate hike to 0% (down from 25% last week). The FOMC meeting in two weeks will likely confirm just a 25bp hike, which makes for a bullish case given where expectations have been since the start of 2022. The uncertainty around the war continues to plague the market.
Interestingly, as major countries impose financial sanctions to prohibit transactions both to and from Russia, crypto could make way into its own. We expect that as Russia’s financial system is now isolated, more citizens are running to crypto as a means to preserve their wealth, especially as the ruble has fallen 30+% against the dollar since markets reopened after the weekend. Putin retaliated with more sanctions in response to continued opposition to Russian-made exports by the US and EU. As a result, cash and cash alternatives in TradFi have seen their first net positive weekly inflows in nearly a month as fund managers pull from risk assets to sit on the sidelines.
Over the week, we have seen some interesting action amongst several altcoins too. Traders continue to sell the top of each rally, resulting in a sharp pullback in the price of several major altcoins. Equity markets in Europe and the US are seeing a sea of red as traders continue to sell risky assets due to the geopolitical situation.
The spillover effect of this is seen here too. Ripple (XRP), beat the downtrend line and hit its 50-day SMA (C$0.96) indicating that bears are still in control. With a negative RSI, the asset finds strong support at C$0.895.
Terra’s LUNA token couldn't sustain above C$112, but buyers are still buying the dips. The bulls have repeatedly bought the dip to C$100, over the past few days. LUNA is in a tight consolidation phase, but if the asset does manage to cross the C$112 - C$118 level, and sustain there, it can rally up to C$130.
Solana (SOL) beat its resistance line of the descending channel on March 2 but could not cross its 50-day SMA (C$138). The failure to do so led to profit-booking by short-term traders. This pulled the price back inside the channel. On the upside, the asset can rally to C$155, but if it breaks the key support at C$103, it may fall to C$90.
The path forward for crypto-equities correlation is most likely largely dependent on the path of equities. If we get a complete meltdown in equities, it’s very likely that crypto will track it closely.
If Russia-Ukraine stabilizes, or the market stops reacting as strongly to headlines from the region, it’s likely that the correlation breaks down a bit, and based on the three moves noted above, that seems as if it would be positive for crypto. And of course, if equities recover meaningfully, one would expect crypto to perform as the fastest horse, in a Betas sense.
- The FCA said it had opened more than 300 cases into unregistered crypto firms in the last six months.
- Ukraine is increasingly relying on crypto donations, its Cyberpolice force has also decided to seek help from the crypto community in the country and abroad.
- Proof-of-Work Ban removed from Europe’s proposed crypto regulation.
- Dogecoin Foundation registers name and logo as trademarked within the EU.
- Swiss city of Lugano to pay taxes in crypto via Tether partnership.
Bitcoin Technical Analysis
Bitcoin was trading in a range from C$50,500 to C$47,000. The asset finally gave a breakout on the upside on Feb 28th and rallied up to C$57,435. However, the bulls once again failed to breach the key resistance level of C$58,000.
BTC made a red body ‘Spinning Top’ candle at the high of C$57,435 and witnessed profit booking. Technically, on a daily time frame, the asset is trading in a broad Rising Channel.
Currently, it is trading at the support of the lower trend line of the channel. If BTC breaks the channel on the downside then we can expect further downfall and the prices could slide to C$43,000. If the prices hold and sustain above the support then we can expect the bulls to resume the up move.
Weekly Sentiment by Coin
Looking at this past week, the sentiment towards Bitcoin continues with 70% of our traders buying BTC. Additionally, Axie Infinity (AXS) and Celo (CELO) show strong support at 61% and 65% of trades being buy orders.
The Sandbox (SAND) and Alien Worlds (TLM), respectively, at 47% transactional were sell orders.
Easily track trader behaviour per coin each week through NDAX's Market Sentiment chart.
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Information provided in the weekly market report is for information purposes only and should not be interpreted as investment, legal, or tax advice. Prior to investing, it is very important to evaluate your investment objectives and your risk tolerance carefully. This technical report is not meant to provide guarantees of future performance, and users should not rely on it, as the actual performance and financial results may differ significantly.