After hitting a high of nearly $1.3 trillion a few days ago, the total market capitalization of all cryptos settled to around $1.26 trillion late Monday evening. Part of the culprit centers on possible technical considerations. As the Motley Fool noted, traders who took bullish bets through derivatives and leverage may have been forced to unwind their positions.
Fundamentally, the U.S. dollar saw a rise in value, which prompted a reactionary move. Typically, cryptos and the greenback share a negative price correlation: as one goes up, the other goes down. In addition, CoinDesk points to a mixed bag of first-quarter earnings results which imposed pressure on digital assets. Moving forward, investors will be assessing further clues from the broader economy to see if the recent boom in blockchain-derived assets can continue progressing. Below are seven cryptos to watch closely.
Heading into the early morning hours of the Tuesday session, Bitcoin (BTC-USD) suffered a noticeable blip to its recent surge. After scraping the $31,000 level last week, traders began to take some profits off the table. In the past 24 hours, BTC declined by more than 1%. In the trailing seven days, it’s down almost 2%.
On the positive front, advocates of cryptos remain encouraged about the latest developments. Since tumbling sharply last year, Bitcoin first had to reclaim the baseline $20,000 level. From there, 30K represented an obvious upside target. Having reached the target, eyes now focus on the big one: 40K. However, on the less-than-encouraging side of the spectrum, investors need to monitor the volume situation. Around mid-March, BTC shot up higher based on a few sessions of strong volume. Since then, however, volume steadily decline. Ideally, you’d like to see rising volume levels confirm rising prices.
Unfortunately, we’re getting the opposite: higher prices, fading volume. Therefore, investors need to tread carefully.
The other asset that captured the spotlight among cryptos was Ethereum (ETH-USD). Heading into the Tuesday early morning session, ETH ended up losing 1.5% in the past 24 hours. In the trailing week, Ethereum disassociated from Bitcoin, instead gaining slightly over 9%.
For the bulls, advocates will point to sustained enthusiasm for ETH. At time of writing, the asset trades hands for around $2,090. That’s well above its 50-day moving average, which sits at $1,765. Also, its 200 DMA runs even lower at around $1,485.
On the other end, ETH seems to run a little hot based on its relative strength indicator reading of 69.15. Also, Ethereum suffers from the same volume situation as Bitcoin, though to a lesser extent. Basically, volume trends refuse to decisively confirm ETH’s upside moves. Looking ahead, the bulls will likely need to push upward into the $2,600 level where some horizontal support lies. Otherwise, the recent lack of volume suggests some turbulence may be coming soon.
Representing the most powerful stablecoin – or class of cryptos that’s pegged to the dollar – Tether (USDT-USD) keeps the machinery of the blockchain market ecosystem well oiled. Therefore, its fluctuations may act as a forward signal for future moves. Interestingly, USDT printed slight red ink, both in the past 24 hours and in the trailing seven sessions.
No, I don’t think it’s time to hit the panic button. However, data from Stockcharts notes a significant increase in bearish volume. Later, turning to Coinmarketcap, Tether’s peg to the greenback declined from slightly above parity to exactly at parity.
Seemingly, the data confirms the overall trading action in cryptos: folks that used derivatives or leverage to speculate on certain digital assets must now unwind their positions. It’s possible that some took the next step of converting USDT to fiat dollars, leading to more supply of Tether. Moving forward, investors should monitor the Tether peg to the dollar for significant fluctuations. That could be the warning sign for the next big move in cryptos.
A beneficiary of renewed interest in cryptos after the underlying ecosystem suffered a credibility crisis last year, BNB (BNB-USD) also took a breather recently. In the past 24 hours, the digital asset slipped almost 1%. However, in the trailing one-week period, the coin managed to gain over 5% of market value.
Overall, proponents of BNB should be satisfied with its performance this year. Getting off to a strong start in January, BNB managed to march higher, albeit with a pronounced deceleration between mid-February through mid-March. Since then, the asset regained its composure, rising above both its 50 and 200 DMAs.
Looking ahead, BNB advocates will be targeting the $375 to $400 level, which is where horizontal support lies. On paper, that’s not exactly the tallest of orders. At time of writing, BNB trades hands at around $345. However, it too suffers from a similar challenge impacting other cryptos: lack of confirmation from its volume trend. Investors should probably monitor Bitcoin, along with Tether’s peg to the dollar for nearer-term guidance.
One of the most popular alternative cryptos or altcoins, XRP (XRP-USD) first achieved fundamental prominence for facilitating sustainable microtransactions; that is, being able to transmit small units of wealth without exorbitant transfer fees. Unfortunately XRP founder Ripple Labs caught the ire of the U.S. Securities and Exchange Commission (SEC), which filed suit against Ripple for alleged securities violations.
However, XRP has performed well recently. In the trailing 24 hours, XRP actually poked its head above parity, albeit very slightly. In the trailing seven days, it lost approximately 2% of market value. Overall, though, XRP managed to blow past its 50 and 200 DMAs in March, which acted as resistance barriers. Better yet, it’s been able to sustain those gains.
Of course, a bigger challenge lies ahead. After becoming overheated late last month based on the RSI indicator, trading for XRP has been somewhat choppy. Moving forward, the bulls will need to target the 80-cent level, where horizontal support lies. The thing is, that’s a big move to go to 80 cents from the time-of-writing price of 51 cents. Therefore, investors should exercise caution.
Transitioning from one of the most popular non-Bitcoin cryptos to one of the sector’s most frustrating assets, Cardano (ADA-USD) has taken longtime investors on a ride. Personally, I won’t be participating in that ride, having converted my holdings to another digital asset for consolidation’s sake. That said, those who have kept the faith since the start of this year have been rewarded.
In the past 24 hours, ADA gained about 0.2%, which is relatively impressive considering the losses in other cryptos. Also, in the past seven days, it gained almost 10% of market value. That’s unquestionably impressive. Bolstering sentiment is the fact that right now, ADA at 44.4 cents trades well above its 50 DMA (37 cents) and 200 DMA (35.2 cents).
In the near term, the bulls will be looking to secure the 50-cent level. However, assuming it gets there, Cardano faces a massive obstacle of $1. That’s really where ADA needs to move. After all, at its peak, ADA looked to challenge the $3 level.
Finally, we’ll end this list of cryptos to watch on a lighthearted note with Dogecoin (DOGE-USD), everyone’s favorite meme coin. Although it earns a reputation for being extremely speculative, DOGE performed remarkably well recently. In the past 24 hours, DOGE gained 4% of market value. In the trailing one-week period, it’s up nearly 9%.
Unlike other cryptos, Dogecoin sparked bullish momentum starting from the tail end of March to the start of this month. At the moment, DOGE trades hands at 9.3 cents, above its 200 DMA (8.2 cents) and 50 DMA (7.9 cents). However, it also incurred a familiar problem: generally speaking, volume trended lower while prices moved higher.
Given the speculative appeal of Dogecoin, it’s really anyone’s guess where the digital asset may end up. Moving forward, if the bulls want momentum to sustain, it must make a legitimate attempt at around 14 cents, where horizontal support lies. From there, investors will be targeting 20 cents. One thing can likely be taken to the bank: DOGE will provide a wild ride. So, prospective investors should be ready for anything.
On the date of publication, Josh Enomoto held a LONG position in BTC, ETH, USDT and XRP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.