• Bitcoin (BTC, Tech/Adoption Grade “A-”) is trading above $50,000 and its 21-day moving average and will look to close above these metrics today.
• Ethereum (ETH, Tech/Adoption Grade “A-”) is also slowly making up ground and seems to have established $1,500 as a strong support level.
• Polkadot (DOT, Tech/Adoption Grade “C”) has been on an under-the-radar tear lately.
Bitcoin is slowly but surely making up the losses from last week and is currently trading above $50,000 again today. Volatility has calmed down a bit over the last two days, suggesting, at the very least, we may be in for sideways trading or, slightly better, a slow recovery.
Both scenarios contemplate relative strength measures cooling off, which should make for a healthier market overall.
BTC peaked around $52,500 overnight before retracing a bit back toward $50,000. It’s broken above its 21-day moving average and is eyeing a close above that key metric today. The bulls and the bears are in a power battle here, and neither side has been able to definitively take control so far this week.
The bulls seem to have established $45,000 as a strong support level and will look to hold above it as the week progresses.
Here’s BTC in U.S. dollar terms via Coinbase:
Ethereum is on the rise today after failing to close above $1,500 yesterday. It’s currently trading around $1,600 and is about $100 short of its 21-day moving average.
ETH has established $1,400 as a strong support level after bouncing off that handle a few times over the last week. The most important thing to watch for Ethereum this week is whether it can definitively close above its moving average. Three closes above that level should be enough to confirm a bottom for the second-largest cryptocurrency.
Here’s ETH in U.S. dollar terms via Coinbase:
Polkadot has been on an absolutely red-hot tear in 2021 and hasn’t closed below its 21-day moving average since late December. Even during last week’s retracement, DOT was able to close well above the key metric each day, despite a few brief retests below it.
DOT has posted six green candles in a row and is currently up more than 20% on the week. It reached its all-time high around $43 on Feb. 20 and is now about 13% below that mark. The next key upside resistance for DOT is the $40 level. If it can break out above $40, the next stop is likely a new all-time high.
This smart-contract platform is performing extremely well so far this year, and it’ll be an interesting asset to watch as 2021 unfolds, especially with all the issues currently caused by Ethereum’s high gas fees right now.
Here’s DOT in U.S. dollar terms via Binance:
Notable News, Notes and Tweets
• As time ticks by, as Anthony Pompliano notes, it becomes riskier and riskier not to have Bitcoin exposure in your portfolio.
• To learn more about non-fungible tokens (NFTs), read this and this.
• Sometimes, it pays to be a contrarian.
What’s Next
After months and months of crazy volatility, huge upswings and sharp dips, we’ve had two days of relative calm in cryptocurrency markets. Perhaps, for those of us who pay attention to this space on a daily basis, this rest was overdue. It’s certainly offered us a chance to relax and reevaluate our long-term plans, poke at our investment theses and make sure we’re on track to hit our goals.
If nothing else, pullbacks like these, if properly understood, give us opportunities to breathe and afford markets space to recenter.
Take this time to do some fundamental research, solidify investment plans (before the market action picks back up) and try to step a little bit further into the future.
Best,
Alex
