Market report for traders

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What’s happening in the market?

THORChain massively outperforms the market

Bitcoin, Ethereum, and Dogecoin prices all spiked when Elon Musk tweeted his intent to continue holding the coins, although they have all ended the week slightly down. Bitcoin is at AU$54,040 (-4%), Ethereum is at AU$3,529 (-3%), and Dogecoin is at AU$0.15 (-6%). 

Besides Polkadot which is up 1% for the week, most major cryptos are slightly down. BNB is down 4%, Terra dipped 9% following near all-time highs, Cardano corrected 5%, Solana dropped 4%, and Avalanche fell 8%. Meanwhile, the big mover for the week was THORChain, up 40%!

EU and US move ahead with crypto regulations

This week US president Biden signed an executive order that helps consolidate various government agencies' efforts to regulate cryptocurrency under a single national policy. Despite concerns from the crypto industry, the language in the document is fairly favourable and nods to the potential for digital assets to help the US maintain its global financial leadership. 

Across the pond, the European Union passed the Markets in Crypto Assets Regulation (MiCA) bill to help protect consumers. Much like the US order, it proved to be much more positive for the cryptocurrency industry than was initially anticipated.

Terra (LUNA) nears an all-time high this week!

On Thursday, Terra’s native token LUNA reached near all-time high levels AU$141! Not only did the supply of UST tokens reach its highest level to date, now totalling over 1.4 billion UST tokens minted, the Total Value Locked (TVL) in the network also hit an all-time high. Since Thursday, the price has dropped to AU$119. Is it time to buy the dip? 

The Luna Foundation Guard, stewards for the Terra protocol, plan to burn 4 million LUNA tokens to mint TerraUSD (UST) tokens, which will be used to purchase “exogenous collateral.” This backing helps make sure that Terra UST holds its peg to the US dollar during times of extreme market volatility. Notably, the burn will reduce the overall supply of LUNA tokens.

Technician’s Take

Bitcoin remains range-bound

At the time of writing, bitcoin (BTC) is sitting at AU$53.8k, after a solid jump from AU$52k to AU$55k on Tuesday. That AU$52k level looks to be a strong support level for the moment, with BTC bouncing off it over the past few months as it trades between the AU$52-62k range. Any break of these key levels will be something to pay attention to. 

After making a bearish cross last week, the Moving Average Convergence Divergence (MACD) has now made a slight bullish cross, while the Relative Strength Index (RSI) is currently neither undersold nor oversold. Naturally, while bitcoin is range-bound, we can’t expect these indicators to be particularly strong. 

Over the next week, I'll watch these indicators to confirm whether this bullish cross is the start of a strong upward trend. In the meantime, I’ll look for shorter-term trading opportunities. 

As always, proper risk management and money management are paramount in such a market.

Beginners recap:

• Bitcoin (BTC) sitting at AU$53.8k and remains range-bound.
• Relative Strength Index (RSI) is neither oversold nor undersold.
• Moving Average Convergence Divergence (MACD) made a bullish cross.\

Disclaimer: Information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions.\ As cryptocurrencies remain volatile, all prices and percentages may have changed since the time of writing.