The most popular cryptocurrencies seemed to be somehow following the Amazon blast higher Friday, all closing with solidly positive percentages. It’s been the case that lately the cryptos are generally tracking wherever the leading “risk-on” equities and equity indexes are headed.
This is a relatively new development as previously — just a few months ago — bitcoin, Ethereum, XRP and the rest of the crowd tended to trade without too much connection to other asset classes. Whatever is going on now, these cryptocurrencies ended the week by jumping higher, unmistakably — just like Amazon, the NASDAQ-100 and the S&P 500.
Here’s the daily price chart for bitcoin as of late Friday afternoon:
You can see how the price jumped on Friday after many days of slow, slightly upward action. Bitcoin is back to the basic level from which it broke down in January. It remains below both the down trending 50-day moving average (the blue line) and the 200-day moving average (the red line). For significant improvement to be confirmed, the crypto needs to move up above both those lines.
Here’s the weekly bitcoin chart:
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Note that bitcoin is now coming off 2 solid up weeks and has managed to remain above that March/June/August support level at just below 30,000. You can see how the 50-day moving average is beginning to trend downward. The negative divergences in the relative strength indicator (RSI, above the price chart) and the moving average convergence/divergence indicator (MACD, below the chart) remain apparent.
The Ethereum daily price chart looks like this:
That’s a solid up day on Friday as the price made it back to the area of the early January low that got taken out later that month. It would be more convincing if the up day had been accompanied by greater volume. Note that the 50-day moving average has crossed below the 200-day moving average, not usually a good sign.
Here is the weekly chart for Ethereum:
That’s 2 weeks of solidly positive price action for Ethereum although it would be more convincing if volume accompanied it. In the meantime, you can see how the negative divergences on the RSI and the MACD indicators remain in place. As you can see on the chart, the 2021/2022 trading range is quite wide with the lows at about 1750 and the highs up there around 4800. That’s a lot of volatility in a rather short time, something you don’t typically see too often on stock or bond index charts.
Watching how closely related crypto prices are to “risk on” big name NASDAQ stocks (for whatever reasons) will be interesting, to say the least.
Whether these major cryptocurrencies have broken out of downtrends remains to be seen.
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Not investment advice. For educational purposes only.