Weekly Market Report -September 20, 2021

Market Fundamentals Analysis

At the time of writing, Bitcoin, the largest cryptocurrency by market value, is trading around the C$56,650 mark, after it witnessed a significant fall toward the end of last week. Volumes have shown good resilience though. The asset seems to be consolidating now and is now trading in the range of C$56,000-C$60,500. The upside momentum ran out of steam after the U.S. posted unexpectedly strong August retail sales figures last Thursday, reviving concerns of an early scaling back of the Federal Reserve stimulus. Speculation about a so-called taper had subsided earlier this week following a weaker-than-estimated U.S. core inflation number, which might have also contributed to the uncertainty and driving the pressure from the bears. Lastly, another statement by Elon Musk, suggesting that BTC is not a mode of payment at Tesla has also led to a downward push on the asset.

Data Analysis firm, IntoTheBlock, said that centralized exchanges registered an outflow of more than 360,000 ETH, which is approximately worth $1.2 billion last Wednesday. This is the largest single day outflow for the asset ever recorded for the asset. This creates an upward price pressure on the asset, as outflows typically posit that the availability of the asset to trade is lesser, which is probably why ETH is up by around 60% week on week. Furthermore, more than 311,000 ETH, worth over $1 billion, is already permanently burned out of supply since the activation of the Ethereum Improvement Proposal (EIP) 1559 on Aug. 9 of this year. ETH faces a resistance at C$4,650 and a support at C$3,900.

Polkadot remains fundamentally a strong asset, despite the fact that it has been on an downturn for the past few days. At the start of last week it rallied by about 15%, and hit a high of C$48.86 on Sep. 14. This shift occurred due to the parachain crowd loan process, which allowed participants to vote for their favourite project via locking their DOT token, hence reducing the circulating supply of the coins putting an upward pressure on the price. Since then, DOT has corrected, and fallen by approximately 20%, currently trading around C$37.50 at the time of writing. The Kasuma parachain auction gave a boost to the volume of the DOT too, and if the Kasuma network is smoothly rolled out after its auction process, the demand associated with thePolkadot network is likely to increase.  DOT faces a resistance at C$46.5 and a support at C$36.5.

Chainlink has also followed a similar trend. Its native token LINK increased by around 7% at the start of the week and made a high of C$41, before witnessing a correction and now trades at C$31.85 at the time of writing. The price has been in range bound oscillating between C$32 to C$35 since then. Chainlink is using its network to make a positive impact in climate change collaborating with Green World Campaign and Cornell University by creating smart contracts that use satellite data to automatically reward people who have increased tree cover. With the announcement of Optimisation Ethereum of its integration with Chainlink’s decentralized oracle solutions with its layer two system, the LINK token which acts as a staking and payment coin in the chainlink ecosystem swelled heavily.  Link is expected to see greater heights since the hotcake DeFi space is quite dependent on it for securing data feeds. This even put the market share of Chainlink in the DeFi sector at 80% at one point.  LINK faces a resistance at C$39.1 and a support at C$31.25.

EOS, a favourite among DAPPS developers, has also had a rather volatile week, as it hit a high of C$7.05, before a correction set in, trading at C$5.61 currently. Researchers from the University of Texas said that there has been foul play during EOS’s initial offering in 2017. EOS was backed by giants including PayPal, Peter Thiel and Billionaire Alan Howard who recently hired Colleen Sullivan to lead venture and private investment in the crypto space. Apparently the EOS tokens were washtrades to Binance and Bitfinex to artificially inflate the price, though the Block.one is said not to be involved in it.

Weekly Snapshot:

Market Updates

● More than $1 billion worth of Ether has been withdrawn from centralized exchanges within a 24-hour period. It's the second time this year and the price went vertical last time.

● Seven days ago, non-fungible token (NFT) marketplaces saw sales nosedive after reaching all-time highs during the month of August. A week later sales have rebounded to a degree and NFT marketplaces like Opensea, Rarible, and Superrare have seen improvements in terms of seven-day trade volumes.

● Cardano’s, Alonzo Hard Fork's successful completion on September 12 marked the arrival of smart contracts on the Cardano blockchain.

● Paypal has completed the first international expansion of its cryptocurrency offering outside of the U.S. Paypal Crypto is now available to customers in the U.K. allowing them to buy, hold, and sell four kinds of cryptocurrencies.

Bitcoin (BTC) Technical Analysis

BTC has been fairly range bound over the last couple of days, trading between C$56,000 - C$61,000. This seems to be a consolidating phase that the asset is operating in, and bears preventing the asset from crossing the C$62,500 mark convincingly, making this a strong psychological resistance level for BTC. Volumes have seen a slight dip over the last couple days, which is probably why the asset tends to reverse its trend every time it witnesses an upward trend, due to the lack of momentum.

BTC last week witnessed a sharp correction almost by 17.5% from C$66,428 to C$54,900. This is the third time that the asset has retested the support level of C$55,000 and showed some signs of recovery and rallied slowly by 13.5% up to C$62,342. However, the bulls failed to manage the grip on the asset as BTC made a ‘Bearish Harami’(Bearish Pattern) on a 12 hour time frame and the bears took the charge again by making ‘Lower Top Lower Bottom ‘ formation and sliding the prices below the 100 day moving average. Technically, the prices have been trading fairly range bound with low volumes.

BTC has a very strong support at C$55,000, if it breaks this level we can expect the prices to slide to C$51,762. Hence, to conclude for BTC to rally, the price needs to break and sustain above C$62,350.

Key Levels

For the latest cryptocurrency prices, check out NDAX's Markets page.

Disclaimer:

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.