Analytical Review. Weekly 31.05.2021
Consolidation continues. After the saturated price movements of recent weeks, the market has been relatively quiet. Over the last week, capitalization was almost unchanged, stabilizing at 1.6 trillion.
The price of Bitcoin decreased by 4.5% to 36,770 USD. Despite the fact that major holders continue to buy BTC when the price reaches the mark of 32,000–34,000, where, apparently, a local support was formed, these purchases are not enough to redeem the reserves formed on the wallets of exchanges and organize a strong upward movement.
In contrast to the overall situation, ETH showed slight growth, about 4.7%. At the beginning of the week, the token’s value was 2,550 USD at a high of 2,850 USD.
Taking advantage of a small break in market volatility, some investors decided to publicly indicate their participation in the crypto industry or announce an increase in the amount of expected investments. Thus, the legendary billionaire Carl Icahn, who was previously full of skepticism about cryptocurrencies in an interview with Bloomberg expressed his desire to invest in Bitcoin quite a large amount, about 1.5 billion, a16 doubled the expected amount of investment in his third crypto fund. Prices are also pressured by rumors from China related to a possible complete ban on mining and cryptocurrency trading. Despite the fact that such news lacks novelty and China has been trying to introduce similar bans for quite some time, it does not cancel the excitement among crypto entrepreneurs — many miners decided to move their equipment to other jurisdictions.
According to analytical platforms, the current market situation is in favor of major long-term holders of cryptocurrencies. They bought more than 100,000 BTC from exchanges in the last 2 weeks, forming together with miners who are in no hurry to sell mined BTC the initial conditions for price growth. The main sellers in this case are new traders who bought bitcoins in the last six months.
After the collapse in mid-May, public interest in futures and options has not recovered to its historic highs. An indirect sign confirming the decline in traders’ willingness to take risk, and reflecting a general uncertainty about the future price, could be the decline in DeFi market borrowing rates.
Despite the overall situation, some protocols and platforms are doing quite well and showing impressive results. For example, the launch of the third version of DEX Uniswap in the shortest possible time has formed a system that earns more commission per day than the Bitcoin network.
In addition to news from the crypto economy, two facts are particularly interesting. The first one is the US President’s plan to support the economy with $6 trillion (recall that one of the reasons for BTC growth last year was a similar plan). The second is an increase in adaptation of crypto assets in the traditional economy due to PayPall’s permission to withdraw tokens purchased on the site and Apple’s hiring of employees to arrange payments using cryptocurrencies.
After large-scale liquidations on the last wave of price declines, the levels of BTC option interest have shifted slightly. At the moment for options with the execution date of June 25 the volume of open interest is $1.4 billion. At the same time, two approximately equal areas of concentration of bids are formed:
· 36,000–40,000, which, given the current dynamics will act as support level
· and 50,000–52,000, the first resistance zone to possible growth.
For ETH, the dynamics of the levels have a more positive character, which, although it can be explained by past optimism about the price, still reflects increased attention from investors.
· Levels 3,200- 3,500 are the first targets in terms of growth expectations.
· The support levels are evenly distributed in the range of 1,120 -1,920, which represents a lack of consensus about a possible price decline and indicates a great deal of uncertainty and volatility in the event of a fall in the quotations.
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