Report Date: March 17th, 2022
Bill Noble, Senior Market Analyst, Token Metrics
The Market Update is centered around using technical analysis to successfully and responsibly navigate the crypto market. It is not intended to be a trading calls newsletter. While technical analysis is an extremely powerful tool, please be aware that it can be temporarily disrupted by large news events.
Total Crypto Market Cap – Weekly Chart
Data as of 3/17/2022 – Past performance not indicative of future returns
Looking at a weekly time frame for total cryptocurrency market cap (TOTAL), we see one important level to watch. A weekly close above $1.80 trillion would be a sign a short-term crypto rally could unfold. If the market does start to move higher, ETH could play a leadership role.
Total Alt Market Cap – Weekly Chart
Data as of 3/17/2022 – Past performance not indicative of future returns
The total crypto market cap excluding Bitcoin and Ethereum (TOTAL3) is currently sitting below the key pivot at $700 billion. The bearish head and shoulders pattern is still in effect. Next week could see crypto correct and then the last week in March may be more positive. So, it may be two more weeks until altcoins finally make a decision as to the nature of the next big trend.
Bitcoin 4-hour Chart
Source: Symbolik
Data as of 03/017/2022 – Past performance not indicative of future returns
Looking at the 4-hour chart of Bitcoin, there could be a pause in the up trend. If that pause is short lived, BTC could move to a DeMark resistance point at 43,300. BTC would have to first move through $41,150. If BTC can not climb above $41,150, then remaining neutral may be the best course of action.
Ethereum 4-Hour Chart
Source: Symbolk
Data as of 03/17/2022 – Past performance not indicative of future returns
In ETH, $2,790 is a key pivot point. If ETH is above that level, a move to the top end of the range at $3,036 is possible. Also, if ETH is above $2,790 it may leave altcoins room to move higher. If ETH is below $2,790, then it may be another slow week or ETH may correct.
Bitcoin – Weekly Chart
Data as of 03/17/2022 – Past performance not indicative of future returns
On the Bitcoin weekly chart, we see four key levels that will be of interest to long term players. On the upside, there is $42,700 and $48,900. Given the uncertainty in the fiat currency market, a test of $47,000 may be possible in the short-term. $42,700 may be resistance in the short term. Bitcoin is probably going to need help from a decline in the Dollar Index (DXY) in order to move above $42,700.
Looking out in time to sell-in-May-and-go-away, Bitcoin may be vulnerable to a broader decline in risk assets. That could lead to a move to either $28,000 or $20,000. In our view, Bitcoin could be a long-term buy at those levels (not investment advice). One interesting note is that we are seeing a lot of pushback on even the possibility that BTC could move to those levels.
Legacy Charts of the Week – XLF (U.S. Banks) XLF: Daily Chart
Data as of 03/17/2022 – Past performance not indicative of future returns
XLF is an ETF that tracks the stocks of big U.S. banks. After breaking down below the bottom of the formation, XLF has returned inside an expanding range formation. This could mean XLF will be stable. Stability in XLF would be very good for both stocks and crypto. We are watching this closely. If Russia or Russian companies default on their debt, XLF may decline again. $36 is the key pivot point to watch.
DXY: Daily Chart
Data as of 03/17/2022 – Past performance not indicative of future returns
Speaking of expanding range formations, the Dollar Index (DXY) has broken out of the top of its expanding range. If DXY holds at 97.90, DXY could move up to 101. An upward move of that magnitude would imply strong demand for the Dollar as a safe haven currency. So, if DXY turns around and rallies, that would be negative for BTC next week. That said, if DXY fell back inside the expanding range, that could be very constructive for crypto. So, it’s wait and see.
Key takeaways:
- BTC direction will likely be a function of what happens in DXY.
- We have yet to see enthusiastic buyers come back into the crypto market.
- It doesn’t feel right to buy crypto after a big rally. It has paid to buy crypto after it has declined sharply, and then take profits after a rally. This strategy may continue to work for another two weeks.
