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What’s happening in the market?

Bitcoin morsels

Bitcoin has been peering suspiciously over its shoulder as number two cryptocurrency, Ethereum, prepares to overtake its leader with its epic ‘Merge’. The transformative upgrade of its blockchain Ethereum will make it faster, cheaper and less power hungry, but delays have caused frustration among investors as the timeline continues to be pushed back.

When it does eventually come to fruition sometime this year, Ethereum's EH1 chain will meld with a new chain to create ETH2.

Hitting a lifetime high last weekend, Bitcoin’s hashrate, the processing power that confirms transactions and secures the Bitcoin (BTC) network, reached 271.19 exahash per second (EH/s) at a block height of 733,197, representing a 55% increase since January, 2022. While statistics show that bitcoin’s price has not had the best first quarter in 2022, the hashrate increasing by more than 55% since that time is quite a feat. 

NFT Kicks

Footwear goliath Nike’s non-fungible token studio RTFKT dropped its first pair of digital sneakers last week. The aptly named Cryptokicks take on the silhouette of Nike’s iconic Dunk shoe and may be customized with various skins. The digital kicks were only available to customers who previously purchased RTFKT’s secret box NFT called MNLTH, which came out earlier this year as a futuristic-looking box with Nike’s swoosh logo on the side.

Stepping into sports NFTs, the US National Football League (NFL) is launching a series of card-themed collectibles aligned with its impending player draft on Thursday. The collection is live on the league’s Polygon-based marketplace, which it unveiled in November 2021 and has since been used for various playoff game ticketing promotions.

The NFTs will also be given out to members of this year’s ‘Inner Circle’ club, a selection of fans representing each team on draft night. The Polygon-based marketplace is just one of many NFT areas the league has explored  in the last year, the most notable being a partnership with NBA Top Shot maker Dapper Labs to create NFL All Day. 

Technician’s Take

Bitcoin is holding the AUD $53,700 support that we have used as a reference support zone for some time, down 4.5% at the time of writing. Reacting to global market instability with growing fears of recession and inflation affecting not only the crypto market, but markets at large. There was blood on the trading floor for traditional markets as well as with the S&P 500 down almost 3%, and the S&P Futures painting a picture of a market in decline, down 3.5%. Domestically the ASX (XJO) was down 2.08% for the day.

MACD made a very brief bullish cross before reversing quickly and crossing back into bearish territory. RSI is still in neutral territory, but has crossed its moving average.

The price has again rejected right on the 50 day MA, however it should be noted that right now BTC is keeping in the same range we’ve been seeing for several months, so I’ll most definitely be watching for either a bounce back off the support zone, or a strong break down through support for a sign of a stronger bearish move. I expect there to be some uncertainty in all markets for a little while, especially in the early stages as people panic sell. However, remember there are no sales of an asset without a corresponding buyer.

So what does this mean for the crypto market from a technical perspective? With uncertainty comes volatility, with volatility comes opportunity.

As always, tight stops and good money management are paramount at all times, but in particular when the market starts seeing more volatility.

Beginners recap:

• Bitcoin (BTC) down 4.5% for the day, finding support at the previous support level of AUD $53,700.
• Relative Strength Index (RSI) is neutral but has made a bearish MA cross
• Moving Average Convergence Divergence (MACD) is bearish
• Watching for a bounce

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.