18 March 2022 | ZebPay Trade-Desk
Yesterday, the Fed raised rates by 25 basis points. This was in line with expectations. The language surrounding the hike was just as important as its headline number. It seemed hawkish across the board. Powell repeated his assertion that inflation risks were positive and that the Fed would take all necessary measures to manage inflation.
The meeting was met with surprising success by US equity markets, with stocks trading close to their March highs. This is likely due to Chinese equities which recovered from yesterday’s freefall when the State Council of China pledged stability. Commodities have also fallen back to March 1st levels. Crude oil is back below $100, and Gold is back at $1900. BTC has shown a positive reaction, with a rally of around 18 hours. In the last three weeks, we have witnessed three sharp rallies in BTC and each one has been retracing quicker. It took three days for the rally on February 28 to retrace. Yesterday’s rally took just over an hour. These rallies were sudden and abrupt, making it difficult to sustain. However, the rally over the last 18 hours has been more steady and longer than expected and is driven more by equities that a single large buyer.
Alts are back in high-correlation crypto markets. BTC has risen about 9% over the past week. Most alts are in the 12-15% region. ETHBTC is back at the top of its most recent range, just above.067, after a week of struggling to maintain its 0.065 support level. The March high of.068 may be broken and that could spark some excitement in ETH and other alts. Although the market seems to be focusing on the Merge, it could happen as early as June. However, we believe it will occur more quickly in July. The Merge could increase ETH staking yields by 9%. When you add the 2-3% deflation, it could result in a 12% total return to ETH stakers. This would be a seismic event for the ETH DeFi ecosystem. We are seeing front-end volatility in the vol space. March vol has gone from over 80% to the low 70s. This is in line with market events. We’re past Fed minutes and any trader who has been trading too much gamma may be looking to take off. Russia-Ukraine appears priced in at this stage.
The opportunity to gradually scale up into risky assets at attractive rates is available due to the wider macroeconomic fear/disarray. Overall sentiment isn’t necessarily bearish but more cautious. Markets remain in a consolidation phase as traders are buying dips. This is a good sign that macroeconomic uncertainty is under control. It’s also a sign that long-term investors are maturing and have more confidence.
Technical Outlook
BITCOIN: BITCOIN, after several support ascending trendlines, is showing signs of recovery. It is trading above its psychological level of 40k as well as its 20-Day Moving Average. The bulls are not gaining momentum and the asset is being rejected at $45,500, $42,500 and $42,500 levels. If BTC breaks above $45,500, then prices will continue to rise to $50k-$52.5k levels. $35k will serve as strong support. A break below this support can lead to further decline and prices could test key levels of $30,000-$28,800.
ETH:
ETH trades in a ‘Symmetrical triangle’ pattern, with decreasing volumes indicating range bound trading. The asset moved up after taking support at the lower trendline. The descending trendline of ETH could pose strong resistance for ETH. If the price breaks these resistances with high volumes, then the asset can rally further to the $3,500 mark. ETH will need $2,400 to maintain its momentum.
BAT: A ‘Dragonfly Doji” candle was lit at $0.55 by BAT and the asset began to show signs of recovery. The asset soared by almost 36.5% to $0.766. The bulls were unable to control the asset’s grip and prices saw another correction. BAT traded in a range of $0.6 to $0.75 after this move. BAT has finally broken out of the range, reaching $0.84 at the highest volume. Bat may experience a strong rest since $0.95 to $1 will be the highest level, while $0.75 to $0.6 is a strong support zone. Weekly Snapshot
USD ($)10 Mar 2217 Mar 22Previous WeekCurrent WeekCloseClose% ChangeHighLowHighLowBTC$39,437$40,9513.84%$42,466$37,260$41,465$37,681ETH$2,608$2,8157.93%$2,762$2,456$2,826$2,504MATIC$1.44$1.450.69%$1.54$1.38$1.50$1.34Cryptocurrency1w – % Vol. Change (Global)BitCoin (BTC)-8.07%Ethereum (ETH)-5.92%Polygon (MATIC)-20.75%Resistance 2$52,500$3,350$1.95$1.00Resistance 1$45,500$3,000$1.70$0.90USDBTCETHMATICBATSupport 1$35,000$2,750$1.40$0.75Support 2$28,800$2,400$1.30$0.60
Market Updates
Optimism has raised $150M to fund its Layer 2 scaling solution. This will allow it to hire more developers and lower fees.
*Sources of charts: https://cryptowat.chhttps://pro.zebpay.com/trade/USDT-INR Disclaimer: This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. When deciding whether an investment is right for them, all investors should take into account these factors and consult with a professional advisor. This report was prepared by the Company using information that it has access to, as well as information from public sources that have not been independently verified. The Company makes no representations or warranties, either express or implied, regarding the accuracy, reliability, completeness, correctness, completeness, or reliability of any information, opinions, or conclusions contained herein. This report is preliminary. The Company does not assume any obligation to revise or update the reports in response to new events or circumstances after the date of the report was made. Trading and Investments in cryptocurrencies viz. Bitcoin Cash, Ethereum, and Ethereum are highly speculative investments that can be subject to market risk. The Author’s analysis should be used only as information and should not necessarily be considered investment advice.
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