Author: BTCLFGTEAM

Bitcoin (BTC) and most major altcoins have broken key support levels to start the week on a weak note. The crypto markets seem to be following the U.S. equity markets lower which are being pulled down as investors reduce exposure to risky assets because of rising rates. 

Arthur Hayes, ex-CEO of derivatives giant BitMEX, said that with rates moving higher and the Fed tapering its asset purchases, the equity markets could witness a meltdown. If that happens, Hayes expects the crypto markets to continue lower and Bitcoin to drop to $30,000 and Ether (ETH) to $2,500 by June of this year.

Ark Invest founder Cathie Wood said in an interview with CNBC that decentralized finance applications are attracting huge interest from investors. The legacy banking industry is feeling the heat because they are not only losing the lending and saving business to DeFi but also losing talent to the crypto industry.

Although the long-term remains positive, could Bitcoin and altcoins weaken further in the near term? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

The bulls held Bitcoin above the 50-day simple moving average ($41,908) for the past few days but could not push the price above the 20-day exponential moving average ($43,576). This suggests that bears are selling on rallies.

The selling picked up momentum today and the bears have pulled the price below the 50-day SMA. There is a minor support at the psychological level at $40,000 but if it cracks, the BTC/USDT pair could plummet to the support line of the ascending channel. The bulls are likely to defend this level with all their might.

The downsloping 20-day EMA and the RSI in the negative territory indicate that bears are back in the driver’s seat. This negative view will be invalidated in the short term if the price turns up and breaks above the 20-day EMA. The pair could then rise to $45,400.

ETH/USDT

Ether traded near the 20-day EMA ($3,198) for the past few days but the weak bounce off it suggested a lack of aggressive buying by the bulls. That may have emboldened the bears who have accelerated their selling today.

The bears will now try to pull the price to the 50-day SMA ($2,940). If the price rebounds off this support, the ETH/USDT pair could consolidate between the 50-day SMA and the 200-day SMA ($3,489) for a few days.

Alternatively, if the price breaks below the 50-day SMA, the selling could accelerate and the pair could drop to $2,800. A break below this support could result in a decline to the trend line. The bulls are expected to defend this level aggressively.

BNB/USDT

Binance Coin (BNB) turned down from the overhead resistance at $445 on April 8 and broke below the 20-day EMA ($422). This suggests that bears are selling on rallies to $445.

The buyers tried to push the price back above the 20-day EMA in the past two days but could not sustain the higher levels. This renewed the selling and the BNB/USDT pair has dropped to the 50-day SMA ($400).

A strong rebound off the current level will suggest that bulls are accumulating on dips. The buyers will have to push and sustain the price back above the 20-day EMA to enhance the prospects for a retest at $445.

Conversely, if the price breaks below the 50-day SMA, it will suggest that buying has dried up. That could pull the pair down to the strong support at $350.

SOL/USDT

Solana (SOL) turned down from the overhead resistance at $122 on April 8 and plunged below the 20-day EMA ($112). The bulls pushed the price back above the 20-day EMA on April 10 but could not sustain the higher levels. This suggests that bears are selling on rallies.

The selling picked up momentum today and the bears have pulled the price below the support at $106. The SOL/USDT pair could now drop to the 50-day SMA ($98) which is likely to act as a strong support.

If the price rebounds off the 50-day SMA and breaks above the 20-day EMA, it will suggest strong demand at lower levels. On the other hand, a break and close below the 50-day SMA could open the doors for a further downside to $81.

XRP/USDT

Ripple (XRP) had been trading above the $0.75 level for the past few days but the failure to push the price back above the moving averages may have attracted further selling by the bears.

The 20-day EMA ($0.79) has turned down and the RSI is near 34, indicating that sellers are in control. The next stop is likely to be $0.69. A strong rebound off this level will suggest that bulls are defending this level with vigor. That could keep the XRP/USDT pair range-bound between $0.69 and $0.91 for a few days.

However, if the price breaks below $0.69, the selling could intensify further and the pair could drop to the next major support at $0.60.

ADA/USDT

Cardano (ADA) made several attempts to rise back above the 20-day EMA ($1.06) in the past few days but the bears did not relent. The selling intensified today and the bears have pulled the price below the 50-day SMA ($0.96).

If the price sustains below the 50-day SMA, the ADA/USDT pair could drop to the critical support at $0.74. The bears are expected to defend this level with all their might. A strong bounce off it could suggest that the pair may consolidate inside a large range between $0.74 and $1.26 for a few days.

Contrary to this assumption, if the price turns up from the current level and rises above the 20-day EMA, it will suggest strong buying at lower levels. That could limit the trading range between the 50-day SMA and $1.26.

LUNA/USDT

Terra’s LUNA token plunged and closed below the 20-day EMA ($99) on April 8. The bulls tried a recovery on April 9 but could not challenge the 20-day EMA. This may have attracted further selling and the bears have pulled the price below the 50-day SMA ($90).

The 20-day EMA has turned down and the RSI has dipped into the negative zone, suggesting that the momentum has turned in favor of the bears. If the price sustains below the 50-day SMA, the possibility of a drop to $75 increases. If this level also cracks, the next stop could be the strong support at the 200-day SMA ($65).

On the contrary, if the price turns up from the current level and rises above the 50-day SMA, it will suggest strong demand at lower levels. The bulls will then again attempt to push the price above the 20-day EMA.

Related: Axie Infinity sees ‘no signs of buyers’ as AXS price tumbles 30% in two weeks

AVAX/USDT

The bulls failed to sustain Avalanche (AVAX) above the 20-day EMA ($86) on April 8, suggesting that the bears are defending this level. This may have led to further selling and the price dipped below the 50-day SMA ($82) on April 10.

The 20-day EMA has turned down and the RSI is in the negative territory, indicating that bears have the upper hand. The sellers will attempt to pull the price to the next strong support at $65.

If the price rebounds off this level, it will suggest that the AVAX/USDT pair could oscillate between $65 and $99 for a few more days.

Alternatively, if the price turns up from the current level, the bulls will again try to push the pair above the 20-day EMA and challenge the overhead resistance at $99.

DOT/USDT

The bulls defended the 50-day SMA ($19) from April 8 to 10 but the failure to push Polkadot (DOT) above the 20-day EMA ($20) may have attracted selling. That has pulled the price below the strong support at $19.

The 20-day EMA has started to turn down and the RSI is in the negative territory, indicating that bears have the upper hand. The DOT/USDT pair could now drop to $16, which is likely to act as a strong support.

If the price rebounds off this level, the pair could remain stuck between $16 and $21 for a few more days. The next trending move is likely to start on a break below $16 or a rally above the overhead hurdle at $21.

DOGE/USDT

Dogecoin (DOGE) attempted a rally on April 10 but the long wick on the candlestick shows that bears sold at higher levels. The bears will now try to sink and sustain the price below the 20-day EMA ($0.14).

If that happens, the DOGE/USDT pair could slide to the 50-day SMA ($0.13). Such a move will suggest that the pair could remain stuck inside the large range between $0.17 and $0.10 for the next few days.

The flattening 20-day EMA and the RSI near the midpoint also suggest a consolidation in the near term. If the price rebounds off the current level, the bulls will again try to push the pair to $0.17. A break and close above the 200-day SMA ($0.18) could indicate the start of a potential new uptrend.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

Terra (LUNA) price slid on April 11 as a broader correction across crypto assets added to the uncertainties concerning its token burning mechanism.

Bitcoin (BTC) and Ether (ETH) led to a decline in the rest of the cryptocurrency market, with LUNA’s price dropping by over 8% to nearly $91.50, and about 30% from its record high of $120, set on April 6.

The overall drop tailed similar moves in the U.S. stock market last week after the Federal Reserve signaled its intentions to raise interest rates and shrink balance sheets sharply to curb rising inflation.

Arthur Hayes, the co-founder of BitMEX exchange, said Monday that Bitcoin’s correlation with tech stocks could have it run for $30,000 next. In other words, LUNA’s high correlation with BTC so far this year puts it at risk of more downside if BTC doesn’t rebound. 

Tale of two exposés

LUNA picked additional downside cues from at least two “exposé” threads that went viral on Twitter over the weekend.

The first thread, penned by a pseudonymous analyst @DeFi_Made_Here on April 7, questioned LUNA’s capability to maintain the peg of Terra’s native stablecoin, TerraUSD (UST) since it is not backed by any tangible asset. 

The second thread, published on April 9 by Jack Niewold, an analyst at the Crypto Pragmatist — a DeFi newsletter, accused Terra co-founder Do Kwon of receiving all the LUNA tokens meant to be “burned” to mint UST. 

He also alleged that the Luna Foundation Guard, a nonprofit organization that backs the Terra ecosystem, has been using a percentage of burned LUNA supply to buy Bitcoin.

Kwon refuted the claims in a tweet-to-tweet response to Niewold, calling him a “made up clickbait.” The self-proclaimed “master of stablecoin” asserted that Terra burns LUNA 1:1 to mint new UST, which can be seen by testing a swap on the Anchor Protocol dashboard.

Jose Maria Macedo, head of crypto research platform Delphi Digital, also rubbished Niewold’s thread as “absolutely terrible.”

Key LUNA price support breaks

The latest LUNA selloff also led its price below its key moving average support against the U.S. dollar.

Related: Bitcoin plumbs April lows as US dollar strength hits highest since May 2020

In detail, the Terra token dropped below its 50-day exponential moving average (50-day EMA; the red wave in the chart below), now near $90, almost two months after reclaiming it as support.

The latest support-to-resistance flip exposes LUNA to the possibility of extending its downtrend toward its 200-day EMA (the blue wave) around $67 (around 20% lower than April 11’s price) in April. 

The 200-day EMA also coincides with the 0.382 Fib line of the Fibonacci retracement graph, drawn from the $4-swing low to the $106-swing high, thus offering LUNA double-layered support against bears.

Conversely, an early rebound from 0.236 Fib line (near $82) could have LUNA retest $106 as its interim upside target.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Last year, cryptocurrencies reached a “tipping point,” according to Gemini’s 2022 Global State of Crypto report, “evolving from what many considered a niche investment into an established asset class.” 

According to the report, 41% of crypto owners surveyed globally purchased crypto for the first time in 2021, including more than half of crypto owners in Brazil at 51%, Hong Kong at 51% and India at 54%.

The study, based on a survey of 30,000 adults in 20 countries over six continents, also made a strong case that inflation and currency devaluation are powerful drivers of crypto adoption, especially in emerging market (EM) countries:

“Respondents in countries that have experienced 50% or more devaluation of their currency against the USD over the last 10 years were more than 5 times as likely to say they plan to purchase crypto in the coming year than those in countries that have experienced less than 50% currency devaluation.”

Brazil’s currency, the real, experienced a 218% devaluation — suggesting high inflation — against the United States dollar between 2011 and 2021, and 45% of Brazilians surveyed by Gemini said they planned to purchase crypto in the coming year. 

South Africa’s currency, the rand, recorded a 103% devaluation in the past decade — second only to Brazil among the 20 countries in the survey — and 32% of South Africans are expected to be crypto owners in the next year. The third and fourth highest devaluation, or inflationary, countries, Mexico and India, displayed a similar pattern.

By comparison, the currencies of Hong Kong and the United Kingdom experienced no devaluation at all against the U.S. dollar over the past 10 years. Meanwhile, relatively few surveyed in those countries, 5% and 8%, respectively, professed an interest in purchasing crypto. 

What conclusions can be drawn from this? Noah Perlman, chief operating officer at Gemini, sees different crypto use cases, often depending upon where one lives. He told Cointelegraph:

“In countries where the local currency has been devalued against the dollar, crypto is viewed as a ‘need to have’ investment, whereas in the developed world it is still largely seen as ‘nice to have.’” 

Crypto as currency replacement 

Winston Ma, former managing director and head of North America at China Investment Corporation and now adjunct professor at New York University School of Law, makes a key distinction between an asset that works as an inflation hedge and one that is used as a currency replacement.

Cryptocurrencies like Bitcoin (BTC) have yet to achieve “inflation hedge” status, unlike gold, in his view. In 2022, they have behaved more like growth stocks. “Bitcoin correlated more tightly to the S&P 500 index — and Ether to NASDAQ — than gold, which is traditionally viewed as an inflation-hedge asset,” he told Cointelegraph. But, things are different in parts of the developing world:

“In the emerging markets like Brazil, India and Mexico that are struggling with inflation, inflation may be a primary driver of cryptocurrencies’ adoption as a ‘currency replacement.’”

“There’s no denying that in early days and still now adoption has been driven by countries where currency stability and/or access to proper banking services has been an issue,” Justin d’Anethan, institutional sales director at the Amber Group — a Singapore-based digital asset firm — told Cointelegraph. Simply put, developing countries are more interested in alternatives to easily debased fiat currencies, he said, adding:

“On a USD notional basis, the larger flows might still come from institutions and more developed countries, but the growing number of actual users will probably come from places like Lebanon, Turkey, Venezuela and Indonesia, among others.”

Sean Stein Smith, assistant professor in the department of economics and business at Lehman College, told Cointelegraph that he was not particularly surprised by the survey’s findings, “since inflation is one of the factors that has and continues to drive adoption of Bitcoin and other crypto assets all over the world.”

But, it remains just one of many factors, and often different regions have separate factors that push adoption, said Stein Smith. “On a fundamental level, investors and entrepreneurs are increasingly recognizing the benefits of crypto assets” as an “instantaneously accessible,” traceable and cost-effective transaction option. In other places, “the potential capital gains and returns of crypto assets” encourage crypto adoption.

There are regulatory questions surrounding cryptocurrencies globally, particularly in the Asia Pacific and Latin America regions where 39% and 37% of survey respondents, respectively, said that “legal uncertainty around cryptocurrency,” tax questions and a general education deficit could affect adoption, the report noted. In Africa, for example, 56% of respondents said more educational resources to explain cryptocurrencies were needed.

“It is not only inflation, it is a bigger issue of empowering our youth to have a better life than their parents and not to have fear of failure or allegiance to the legacy financial markets or products,” Monica Singer, South Africa lead at ConsenSys, told Cointelegraph. In addition, “the issue of dependency on cash and remittances is huge in Africa and the dependency on social grants.”

The future of money?

Overall, Brazil and Indonesia were the top two countries in cryptocurrency ownership in the survey. Forty-one percent of those surveyed in each of those countries said they owned crypto. Comparatively speaking, only 20% of Americans surveyed said they owned cryptocurrency. 

People living in inflation-afflicted markets are more likely to view cryptocurrencies as the future of money. According to the survey:

“The majority of respondents in Latin America (59%) and Africa (58%), where many have experienced long-term hyperinflation, say that crypto is the future of money.”

The strongest support for this view was seen in Brazil at 66%, Nigeria at 63%, Indonesia at 61% and South Africa at 57%. The fewest believers were in Europe and Australia, notably Denmark at 12%, Norway at 15% and Australia at 17%.

Will the Ukraine conflict impact adoption?

The survey was conducted before the Ukraine-Russia War. Will that devastating conflict have any long-term impact on global crypto adoption growth?

“The Ukraine-Russia war has certainly led to crypto being thrust directly into the mainstream conversation,” said Stein Smith, “especially since the Ukrainian government has directly solicited over $100 million in crypto donations since the war began,” further adding:

“This real-world demonstration of the power of decentralized money has the potential to turbocharge wider adoption, broader policy debate and increased utilization of crypto as a medium of exchange moving forward.” 

But, the war may not affect all parts of the developing world. “The war in Ukraine is of no consequence to the demand for crypto in Africa,” Singer told Cointelegraph. Other factors loom larger. “Inflation, yes, but also the lack of trust in the government in many countries in Africa and the fact that we have a young demographic that is very knowledgeable in using mobile phones and the internet.”

The success of Mpesa in Kenya, for example, has had a big impact on the continent and will arguably help hasten further crypto adoption. It “is directly related to the spirit that exists in Africa of making a plan when everyone that you trust fails you,” she said. 

On the other hand, Ma views the Ukraine conflict as a sort of crisis check for cryptocurrencies. “The Ukraine-Russia War has served as a stress test for the payment rail of cryptocurrencies amid global uncertainty, especially for the residents in emerging markets,” he told Cointelegraph, adding:

“We could expect the greatest future gains in crypto adoption to be found in emerging markets like these.”

Inflation along with currency devaluation are enduring concerns in many parts of the world. In such afflicted areas, Bitcoin and other crypto are now seen as candidates for currency replacement — the “future of money.” This is generally not the case in the developed world, though that could change, particularly with more regulatory clarity and education. As d’Anethan told Cointelegraph, “It seems that even Western nations are waking up to inflation and the impact it will have on cash holdings.” 

Axie Infinity (AXS) price has fallen by nearly 30% two weeks after losing $625 million to a hacking incident involving its play-to-earn gaming platform’s underlying blockchain, the Ronin Network.

AXS/USD dropped to $46.69 on Monday, its lowest level since March 16, signaling a dampening buying sentiment among traders and investors following the hacking incident.

Independent market analyst TJ asserted that there is “no sign of buyers” even with the price entering areas with a history of attracting accumulators.

For instance, AXS broke below the demand zone that TJ highlighted as a potential inflection point during the weekend, a move that risked sending the price further lower towards its range support target near $45 this week.

AXS bounce back ahead?

The bearish prospects appear despite a strong assurance from Sky Mavis — the company that built Axie Infinity — that they would reimburse all the users who lost funds in the $625 million theft. Last week, the firm announced a $150 million raise, led by Binance, to honor its promise.

Additionally, AXS hints at more downside after painting a death cross between its 20-day exponential moving average (20-day EMA; the green wave) and its 50-day EMA (the red wave).

The area around the $45-level has earlier served as an accumulation zone for traders. For instance, its last retest as support in March had preceded a nearly 70% rebound move to around $75. Similar retracement moves occurred in January and February when the price fell to around $45.

Meanwhile, as AXS tests the key support level, it would also prompt its daily relative strength index (RSI) to move lower below 30 — an “oversold” signal. This suggests Axie Infinity could be due for a bounce higher in April.

Falling wedge confirmation needed

AXS’s price is already “oversold” on its four-hour chart, according to its RSI readings near 25. Meanwhile, AXS is breaking out of its prevailing falling wedge pattern to the downside despite it being a bullish reversal pattern in theory.

The support confluence — featuring an oversold RSI and the accumulation zone near $45 — raises the AXS’s potential to re-enter the wedge range, followed by a breakout to the upside.

If this happens, AXS/USD could move toward $58, a key March 2022 resistance level, based on the falling wedge’s theoretical profit target, measured after adding the distance between its upper and lower trendlines to the breakout point.

Head-and-shoulders risk

Conversely, breaking below the key support area near $45 could trigger AXS’s head-and-shoulders (H&S) setup on longer timeframe charts.

Related: BTC stocks correlation ‘not what we want’ — 5 things to know in Bitcoin this week

That is primarily because the $45-level serves as the pattern’s neckline. As a rule, a break below the H&S neckline support shifts the asset’s downside target to the level at a length equal to the maximum distance between the head and the neckline, as illustrated in the chart below.

As a result, the H&S setup risks sending AXS’s price toward $12 on a decisive breakout below its neckline. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.