• Bitcoin (BTC, Tech/Adoption Grade “A-”) has given back 6% today after a rebound briefly pushed its price above $40,000. It’s now sitting at about $36,000.
• Ethereum (ETH, Tech/Adoption Grade “A-”) is having a slightly worse day, trading roughly 9% lower near $2,500.
• Bitcoin’s market dominance remains unchanged around 44%, as much of the market traded together.
Investors are watching Bitcoin’s performance against the broad market to see if it can recapture a greater share. That’s because the King of Crypto will likely lead the way before another pronounced run from altcoins, similar to what we saw in the beginning of the bullish cycle that started March 2020.
For now, though, it faces multiple technical headwinds. Bitcoin is trailing both its 200-day and 21-week moving averages, two key longer-term support levels.
Bitcoin also lagging below its 21-day moving average, which could also act as a short-term resistance before Bitcoin looks to retake its previous highs.
Here’s Bitcoin’s price in U.S. dollars via Coinbase Global Inc. (Nasdaq: COIN):
Ethereum took a substantial hit last weekend when it fell below $1,800 on March 23. The second largest cryptocurrency by market capitalization has managed to gain 45% since then. But it’s still down over 40% from its all-time high, just shy of $4,400.
Ethereum is significantly below its 21-day moving average, and it would be a good sign to see it move closer. Ethereum is mostly swinging in the $2,300 to $2,900 range and could easily follow Bitcoin through a period of price consolidation before resuming its uptrend.
Here’s Ethereum’s price in U.S. dollars via Coinbase:
Index Roundup
This week’s data was mostly positive, as crypto assets bounced back and digested their most recent correction. While each of the Weiss Crypto indexes were able to book slight gains, we saw significant volatility during the seven-day trading week that ended Thursday.
The crypto market was able to regain some ground this week despite facing further sell-offs in the beginning. Bitcoin and the most established cryptocurrencies slightly lagged the rest of the crypto market, but this was likely because they corrected less to begin with.
The Weiss 50 Crypto Index (W50) managed a modest 1.21% gain this week. But this is a minor development considering the volatility of most swings.
The Weiss 50 Ex-BTC Index (W50X) added 1.20%, with Bitcoin performing almost exactly in line with the other most established cryptocurrencies.
Breaking down performance this week by market capitalization, we see that the large-caps underperformed their small- and mid-sized counterparts.
That’s because the crash came down harder on the small- and mid-caps due to their more speculative nature. That growth favored the small-caps this week was likely compensation for their previous overcorrection.
The Weiss Large-Cap Crypto Index (WLC) increased 0.91%, leaving the most prominent cryptocurrencies largely unchanged.
The Weiss Mid-Cap Crypto Index (WMC) rose 6.12%, a starting attempt at reversing their recent downtrend.
Small-cap cryptocurrencies booked the largest gains this week, climbing 7.14% as tracked by the Weiss Small-Cap Crypto Index (WSC). Still, most assets have a long way to go to erase the impacts of the recent correction.
Most of the crypto market traded in tandem this week despite minor variations in returns, as shown in our nearly identical index graphs. The entire market is moving together, reacting to new developments while attempting to regain losses.
Altseason is firmly on hold despite their outperformance this week. The market will likely look to Bitcoin to lead the next charge higher. But that may take a while; its price still needs to consolidate before beginning phase two of this bull cycle.
Notable News, Notes and Tweets
• Pomp tweets that Wall Street isn’t recognizing the potential disruption to traditional finance.
• Michael Saylor responds to critics of Bitcoin’s energy consumption.
• Tampa Bay Buccaneers quarterback Tom Brady is a “big believer” in crypto.
What’s Next
Volatility is inevitable in the crypto space, and this week was no exception. After suffering from a swift crypto market slide, most assets managed to bounce back slightly.
Periods of significant volatility and large corrections are a part of crypto, and they are inevitable for an asset class with such high growth potential. While the market is pulling back today, it still made considerable strides from the established bottom.
Once the volatility decreases, we’ll likely see a period of prolonged sideways trading before the crypto market resumes its bull run. But fundamentals are constantly improving, and institutions will continue looking to gain exposure despite short-term headwinds from its environmental impact.
Best,
Sam
