The top two cryptocurrencies are up today, and altcoins are rising, too — all on the heels of good fundamental news …
• Bitcoin (BTC, Tech/Adoption Grade “A-”) found support and has reclaimed its moving average.
• Ethereum (ETH, Tech/Adoption Grade “A-”) has been trading around $1,700 for the past two days after bouncing off lows near $1,650.
• Tezos (XTZ, Tech/Adoption Grade “B-”), a smart-contract platform, has more than doubled so far in 2021.
Bitcoin is currently up just over 3% on the day and is trading around $56,000. This comes after BTC had slipped below its 21-day moving average to a low of $53,000 yesterday.
It looks like Bitcoin will close above its moving average, indicating a lower probability for a further slide from here for now.
Note that this current bull cycle is overextended; a correction — one lasting a few weeks or months, rather than a couple of days — might actually refresh the crypto market from a technical perspective.
At this point, we’re still seeing higher highs and higher lows. This is still bullish, though each up-move has been less substantial on a percentage basis than the last. So, things are slowing down.
Here’s BTC in U.S. dollar terms via Coinbase:
Ethereum’s price fell below its 21-day moving average earlier in the week and even broke through support at $1,700. However, ETH did find support around $1,650 and has since regained ground up to $1,725.
With a 3.5% surge so far today, ETH is attempting to retake its moving average. If it fails to do so before the end of the day, we could be looking at a prolonged period of sideways trading, even the beginning of an extended retracement for the No. 2 crypto.
Here’s ETH in U.S. dollar terms via Coinbase:
Tezos hit a high above $5.50 on Feb. 14 before falling all the way to a low around $3 on Feb. 23. It’s since regained some ground and has been teetering on its 21-day moving average for a few weeks.
After hitting a low of $4 yesterday, XTZ is up almost 6% today, retesting resistance at $4.50. If Tezos is able to break through, look for it to test $5.00.
This smart-contract platform has had a great year, more than doubling so far in 2021. Tezos is a project to watch.
Here’s XTZ in U.S. dollar terms via Coinbase:
Notable News, Notes and Tweets
• Elon Musk announced that Tesla, Inc. (Nasdaq: TSLA) will now accept Bitcoin as a payment option for its cars.
• More importantly, Tesla will hold that Bitcoin and not convert it to fiat.
• Miami Mayor Francis Suarez is featured in The New York Times for his efforts to turn his city into a Bitcoin hub.
What’s Next
Digital artist Beeple, who sold a non-fungible token (NFT) earlier this year for $69 million in Ethereum, immediately converted that ETH for fiat currency, unbeknownst to his supporters in the cryptocurrency community.
Beeple was recently featured on CNN, and in a segment, he announced he believes NFTs are in a bubble. That’s cemented his decline in status. Make of that what you will with regard to the current state of the NFT market.
What should we make of the fact that one of 2021’s crypto heroes thinks a hot corner of this still-emerging industry is overextended?
Well, we’d note that we advise caution as well, as a matter of course. Beeple’s abrupt shift simply qualifies as just another signal to be cautious in a fast-moving market.
Now, there is talk of a “supercycle” among crypto technical analysts, rooted in the belief that 50% to 80% downswings are now a thing of the past. These claims are not supported by data and, obviously, can’t be proven until after the fact.
What we do know is that with every crypto-market cycle from inception until now, there’s been a cooling-off period between “bull phase one” and “bull phase two.” We’re currently in the longest “bull phase one” in Bitcoin’s history. At some point, a correction will happen.
Don’t fear what should prove to be a relatively short-lived cooling-off before we enter the next bull phase.
There is always the potential for short, sharp retracements in an emerging market. The long-term outlook for Bitcoin, Ethereum and cryptocurrency generally is still bullish.
Stay tuned for more insights as the market develops.
Best,
Alex
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