FUD Can’t Stop Crypto Adoption
Last week was turbulent and volatile for crypto as Bitcoin (BTC, Tech/Adoption Grade “A-”) dropped to $55,600. It bounced from there but was rejected by resistance at $60,000 ... twice.
It’s currently trading near $56,200 and needs to hold above it to avoid a more serious shakeout to the $53,000-$54,000 area.
And if it does? Does that mean the parabolic cycle is over?
Support at $53,000 would be a fine launchpad for the next rally. Still, I’d like to see support at $56,000 hold, since BTC needs to reclaim $60,000 and then its 21-day exponential moving average (EMA) — as shown by the red line in the BTC/USDT daily TradingView’s chart below — to go back to a bullish trajectory.
Performance of altcoins will depend on Bitcoin. If Bitcoin goes bullish or sideways, some altcoins may have a mini-season and pop up one by one.
If Bitcoin slips under $56,000, altcoins may suffer for a bit longer.
Speaking of, 200,000 Ethereum (ETH, Tech/Adoption Grade “A”) tokens have been deposited to exchanges in the last 24 hours, probably preceded by the fear, uncertainty and doubt (FUD) created by 3 Arrows Capital’s founder and CEO Zhu Su.
Zhu Su said that he is abandoning ETH due to high fees ... before softening his stance later, saying that there are “great teams working on scaling ETH on Layer-2s.”
And you can see the impact on this ETH/USDT daily TradingView chart. A week ago, ETH fell out of the big ascending channel it had traded in since October, eventually finding support near $4,000.
ETH bounced to its 21-day EMA level (red line) yesterday, but then dropped again (the last two red candles/days):
The daily close below $4,200 would send ETH back to the major $4,000 support area. If it pumps, however, resistance waits at $4,450 and $4,600.
Overall, ETH looks good as long as it holds $4,000, but we will still be safely in a bull run if it continues to trade above $3,700.
And that seems very likely, as the Ethereum’s user base continues to grow. The number of Ethereum addresses with at least 0.01 ETH has grown to 19.5 million, breaking a record today!
Actually, when it comes to broad crypto adoption, we had a fruitful week. Here are the highlights:
- Famous auction house Sotheby’s held its first sale in ETH.
- Google searches for non-fungible tokens (NFTs) have hit an all-time high.
- Post Malone has bought a Bored Ape NFT.
- TIME magazine is launching a metaverse newsletter.
- The National Football League (NFL) partnered with Polygon (MATIC, Tech/Adoption Grade “B”) to issue NFTs.
- Morgan Stanley (NYSE: MS) said that NFTs could become a $240 billion industry by 2030.
- Adidas (OTC: ADDYY) has issued their own NFT collection honoring this year’s first overall NFL draft pick, Trevor Lawrence.
- Binance has enabled Arbitrum Layer-2 deposits, while Crypto.com has enabled Polygon.
Notable News, Notes & Tweets
- Crypto lender Celsius increases its Bitcoin mining investment to $500 million.
- The El Salvador government strikes a deal with Bitfinex and Blockstream to issue a $1 billion Bitcoin bond.
- India is likely to table Cryptocurrency Bill before the parliament session.
The total supply of Bitcoin held by short-term holders is at multiyear lows. They hold less than 3 million BTC, according to Glassnode data. Low short-term holder supply is typical at the end of bear market ... and in early bull markets.
Hence, the current situation is quite unique! And, if you ask me, it looks quite bullish, as short-term holders are almost shaken out. Meaning there’s fewer people looking to sell as long-term holders are, well, HODLing.
On a lower timeframe, however, BTC is forming a descending trading range. It’s likely to follow this pattern for a couple of days before breaking out of it.
Don’t let yourself get shaken out by volatility. Parabolic phase is still ahead of us! So, sit tight ... and make sure your portfolio is ready for the run.