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Assisted by a decent rally last week, Bitcoin (BTC) managed to end its losing streak after 10 weeks. The past week hasnâ€™t been good for stocks, with most of the major indices closing on red in spite of midweek relief bounces. The main cause of this may be a strong US jobs report for May which may seem counterintuitive at first because unemployment going down is generally perceived as good news. Strong jobs data are an indicator of a healthy economy but it allows the US Federal Reserve to hike rates without sinking the economy. In this kind of market where all eyes are on interest rate hikes, good news is bad news, and vice versa.
In todayâ€™s article, we will analyze price actions of major crypto assets including BTC along with short-term outlook for it.
For the past one month, BTC has been trading in the $28,000 to $32,000 region with occasional volatility stretching it by a thousand dollars on both sides. High time frame charts (weekly) still indicate possibility of a further downside. After 9 weeks, BTC closed last week with a small gain of 1.5%. On the whole, BTC is struggling to close above $31,000-$32,000 resistance levels which could prove to be a short-term reversal. Post which BTC could make an attempt to $35,000 and $37,000 levels eventually.
Taking a look at current weekly relative strength index (RSI) levels of BTC below suggests that bottom could be around the corner. The RSI at 33 indicates BTC is in oversold territory and last time it entered this territory was during March 2020. Another interesting trend that is taking place is with Canadian spot purpose Exchange Traded Funds (ETFs). ETF allows investors to invest in an asset without direct exposure to the asset. Canadian spot ETF has added more than 11,000 BTC in the last 30 days signifying aggressive accumulation.
<source: Tradingview, Binance>
Ethereum (ETH) longest lived proof-of-work (PoW) testnet is reportedly moving to proof-of-stake (PoS) according to one of the core ETH developers. A new Ropsten beacon chain has been launched and the merge upgrade is expected around June 8 on the network. As welcoming as the news sounds, ETH has yet to turn bullish. Take a look at ETH/BTC trend and spot the continued weakness this month.
<source: Tradingview, Binance>
Among the top 100 crypto assets by market capitalization, all of them except Tezos (XTZ), Gala (GALA), eCash (XEC) have registered losses in the last 24 hours. XTZ was up by 13% intraday before retracing gains to 2.5%. The rally seems to have resulted from the narrative that PoS platform Tezos is better suited for scalability of Web 3.0. GALA rose by a few percentages after the news of Gala entering a deal with Epic Games Store broke out. Epic Games Store, with 194 million users, is best known for its Fortnite game.
Overall climate still uncertain
While Bitcoin and key altcoins are losing strength this week post US jobs data, the macro environment continues to remain volatile and a risk-off scenario. Investors are advised to stick to BTC to tread these tough waters along with liquid cash to deploy in case of bigger capitulations over the next couple of months.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.