Weekly Crypto Analysis: BTC Plunges to $38K, Investors Brace to Capture Oversold Altcoins

2022/03/07 12:26:51

Today's global cryptocurrency market capitalization is currently sitting at $1.70 trillion, returning to its levels from last Monday. The crypto market cap reached a high level of $1.90 trillion during the previous week, but the market couldn't sustain the gains for long. Over the past 24 hours, the global digital currencies market capitalization increased 1.40% to $1.77 trillion, while trading volumes fell 35.79% to $53.45 billion.

The total volume in the decentralized finance (DeFi) space was $9.52 billion, accounting for approximately 17.81% of the 24-hour cryptocurrency trading volume. The total volume in stablecoins was $43.49 billion, accounting for approximately 81.38% of the 24-hour cryptocurrency trading volume.

Crypto Market Overview

Bitcoin has begun a new decline against the US dollar, falling below $40,000. BTC is losing ground and now trades near the market price of $37,950 level. SOL lost its advantage during the previous week and fell from $105.40 to $77.50. However, buyers came to the rescue, and the alt quickly recovered. SOL is trading at $82.49 at the time of publication, and as a result, there is a 2.45% decrease from the previous day.

Ethereum Classic (ETC) lost its position at $32.94 after following a down channel and finding support at a two-month low of $23.66. However, buyers stepped in and pushed the coin higher, testing the $30.43 level on March 1. Right now, it's consolidating around $26. Following a downward wedge pattern, Fantom (FTM) dropped from $2.05 to $1.33.

Cryptocurrency Market Heatmap | Source: Coin360

Likewise, the top performer, LUNA, is struggling as the overbought LUNA/USDT begins a bearish correction. Luna falls from $97.66 to $78.34, completing a 38.2% Fibonacci retracement.

A bearish correction is usually a good time to buy for investors who have already missed the bus.

Top Altcoin Gainers and Losers

Top Altcoin Gainers:

· Waves (WAVES) ➠ 52.96%

· THORChain (RUNE) ➠ 39.24%

· Chiliz (CHZ) ➠ 23.92%

· NEAR Protocol (NEAR) ➠ 23.92%

Top Altcoin Losers:

· Fantom (FTM) ➠ 18.95%

· Uniswap (UNI) ➠ 18.48%

· Aave (AAVE) ➠ 18.48%

· Convex Finance (CVX) ➠ 18.48%

News Highlights

Here are some of the events that made the previous week's crypto news section stand out:

Strong US Nonfarm Pressures BTC/USD

The labor market in the United States continues to tighten, with unemployment now hovering around 4%. Given the overwhelming hiring intentions, the Federal Reserve is expected to respond with higher interest rates, despite the uncertainty driven by geopolitical tensions.

The February jobs report contains another set of excellent numbers, with nonfarm payrolls increasing 678,000 versus 423,000 expected. Markets may be surprised by the weak wage growth number, which came in flat on the month (consensus 0.5% month-on-month), with the year-on-year rate slowing to 5.1% from 5.5%.

Overall, the report emphasizes the domestic economy's strength, with employment soaring and overall household income increasing faster due to rising pay rates. It will bolster the view that the Fed can raise interest rates by 25 basis points in March, despite the concerns raised by geopolitical tensions.

Stronger US nonfarm payroll and labor market figures are driving an uptrend in the US dollar, dragging a bearish price action in the BTC/USDT.

DeFi 'Godfather' Cronje Quits, TVL for FTM and YFI Down

Andre Cronje, Fantom Foundation technical advisor, and Yearn Finance founder, has deactivated his Twitter account on Sunday. He seems to leave the decentralized finance (DeFi) space in disarray. Anton Nell, Cronje's long-time colleague at the Fantom Foundation, announced on March 6 that both he and Cronje were leaving the crypto space entirely.

With this, the market is concerned about decentralized apps and services operating up to this point. Yearn.finance, keep3r.network, multichain.xyz, chainlist.org, bribe.crv.finance, and the new solidly.exchange are among the 25 dApps. The news has caused a sharp drop in Yearn.finance (YFI), which is down 8.60%, and Fantom (FTM), which is down 17.75% in 24 hours.

This cryptocurrency news drives bearish sentiment for digital assets, resulting in a downtrend in the market.

US Inflation (CPI) Under the Spotlight

The annual inflation rate in the United States increased to 7.5% in January 2022, the highest since February 1982, as rising energy costs, labor shortages, and supply disruptions combined with solid demand weighed. With volatile energy and food categories excluded, the CPI increased by 6% since August 1982.

Economists predict a slight increase in US inflation figures, from 0.6% (previously) to 0.8%. Typically, a higher consumer price index increases demand for the dollar, causing its price to rise against dollar-denominated altcoins.

Since all these negative news and events have already been priced in and driven a downtrend in the cryptocurrency market, bulls may see this as an opportunity to buy in an oversold market.

BTC/USDT Chart on the Daily Timeframe | Source: Kucoin

Bitcoin Analysis

Bitcoin news is exhibiting a downtrend, having plunged from a $45,500 double top pattern to trade near $37,990. On the bitcoin chart, BTC/USDT price trades under 50-day moving average at $38,240. Closing of bearish engulfing candles below the 50 MA reinforces the market's bearish bias. Leading technical indicators such as MACD and RSI are in a selling zone.

On the 4-hour timeframe, descending triangle pattern’s horizontal trendline provides support at the $34,650 level. A break of the $34,650 level exposes Bitcoin's price to a support level of $29,700 in the short term. Under $38,240, a bearish bias may prevail, and vice versa.

Good luck, fellas. Stay tuned for exciting updates!

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