Crypto Weekly: 27 September – 3 October 2021
Fear, Uncertainty, and Doubt (FUD) spread throughout the Crypto world this past week as news of China’s increasingly strict crackdown on all crypto transactions and minings created peak FUD for Crypto. In the process, the digital asset market faced heavy sell-offs, forcing prices to fall dramatically.
The Chinese government and news of rising regulatory scrutiny surrounding Crypto coming out of China is a favorite topic for inducing FUD since as far back as 2017 when the Chinese government banned Bitcoin. Historically, Crypto restrictions coming out of China have always caused flash sell-offs in the market.
At this point, FUD is an inevitable part of trading in the digital asset market. While traders cannot control FUD and the resulting volatility, they can control their own portfolio and ensure that they are not overtrading and have enough capital in reserve in case the market suddenly goes on a downturn.
The US Federal Reserve concluded its meeting last week and announced that it would be slowing down its quantitative easing campaign, possibly starting from November onwards. None of the news coming out of this FOMC meeting was unexpected and has had little impact on the global market.
Despite the FUD, El Salvador’s adoption of Bitcoin seems to be progressing rapidly, with over two million people now actively using the government-backed Chivo wallet representing over 25% of the country’s population. The Chivo app, which allows El Salvadorians to easily use Bitcoin for their daily spending, has reached over 1.1 million downloads in just three days.
Meanwhile, Twitter has introduced a tipping service starting with iOS users on their platform that will allow users to tip content creators with Bitcoin. The transactions are made possible via the Lightning Network, which facilitates fast and cheap transfers of Bitcoin and marks a significant milestone on the path towards mass adoption.
Finally, Cardano has announced a partnership with DISH Network, an American telecom service provider. The partnership aims to introduce Cardano’s blockchain technology to DISH’s telecom services and could boost Cardano adoption considering DISH’s over 19 million customer base.
Weekly Technical Analysis: 27 September – 3 October 2021
BTC’s support at $40,500 successfully remained intact despite two strong challenges during the sell-off. The support seems to be holding firm, but BTC will still be trending in a sideways down direction so long as BTC cannot remain above $45,000. Traders are advised to be wary of increasing volatility and potential corrections during this week.
ETH has rebounded strongly after making a double bottom at $2,730. Despite this, ETH’s trend continues to move in a sideways down pattern like BTC. ETH will have to rise above the $3,142 level for it to enter an uptrend once more. If ETH can rally, it will look to challenge resistance at the $3,500 level.
UNI has rallied strongly and is likely about to embark on an uptrend. If support at 750 Baht can remain intact, look for UNI to test resistance at 1,000 Baht. UNI is one of the DeFi tokens to keep an eye on this week.
REN Project (REN)
REN continues to be bullish, with key support at the 30 Baht level. If support can remain intact, look for REN to continue to create new highs. REN will be looking to challenge its first resistance level at 46 Baht but may end up returning to its previous highs before setting a new ATH.
Trading and Investment Consideration For The Week
Despite the overall market not yet facing a correction, Bitcoin’s downtrend continues, with the market leader unable to create new highs following the sell-off. This makes profitable trading in BTC difficult in this period. During this time, traders should consider identifying tokens that outperform the market and buy during dips that don’t break the support level and focus on short-term profit-taking instead.
DeFi tokens, particularly DEX tokens like Uniswap, Sushiswap, Curve, and 1Inch, have all had strong rallies following China’s increasingly strict regulation. As the Chinese government continues to crack down on centralized exchanges, Chinese users are forced to turn to Decentralized Exchanges, making their corresponding tokens very interesting to traders this week. Much like the native tokens of Smart Contract platforms, DEX tokens could prove to be very profitable for traders that are keeping an eye on the market.
Worries about China’s Evergrande debt crisis seem to have faded, and both the stock markets and the digital asset market have begun to recover. With no surprising news coming out of the FOMC monetary policy meeting, macroeconomic factors are unlikely to affect the digital asset market much in the immediate future.
To minimize the risk of FUD negatively impacting their portfolio in the short term, traders are advised to prepare for potential volatility and perhaps keep at least 50% of their capital in reserve in case of a sudden downturn.
Despite the FUD, it’s important to remember that Bitcoin’s fundamentals remain unchanged and that recent price changes result from FUD and speculation. If Bitcoin prices do not hit a new low, it is possible for Bitcoin to return to an uptrend before the end of 2021.
*Materials on Bitazza Weekly Newsletter are intended to be used and must be used for informational purposes only. The views, information, or opinions expressed are solely those of the individuals involved and do not necessarily represent those of Bitazza and its employees. The email and the information contained herein is not intended to be a source of advice or financial analysis with respect to the material presented, and the information and/or documents contained in this website do not constitute investment advice.
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