Easily one of the biggest news items impacting not only cryptos to watch but myriad other markets was the completely unexpected death of Iranian President Ebrahim Raisi. Following that shocking disclosure, the price of gold soared to over $2,400. That practically means $2,500 for this week may be a foregone conclusion.
At the same time, the benchmark blockchain asset flew above the $71,000 level. Naturally, the blistering run took other cryptos with it. Now, the standard explanation is that demand from crypto-centric exchange-traded funds contributed to the price spike. The mechanics behind the price action are understandable.
However, the key question is why? It’s possible that the geopolitical backdrop could worsen, which may have inflationary implications. After all, Iran is a major player in the global oil supply chain. Disruptions to oil could easily lead to dollar inflation. In turn, that cynically helps cryptos to watch.
Of course, it still pays to be vigilant because you never know what might happen with virtual currencies. Below are key cryptos to watch.
Bitcoin (BTC-USD)
It’s never a boring moment with cryptos to watch and Bitcoin (BTC-USD) proved exactly that. At the beginning of the month, BTC fell below the critical $60,000 milestone. There was a point when it appeared that sentiment would reverse from the prior optimism. If so, stakeholders were risking holding onto a big bag of canine waste products.
However, with the market absorbing multiple news items – including insinuations from the Federal Reserve that it will seek to avoid raising the benchmark interest rate – Bitcoin decided to run higher. Now, the question is as follows: is this rally sustainable or not? It’s a difficult inquiry to address.
As stated earlier, no doubt exists that the moment is an encouraging one for the bulls. However, we’ve got to pay attention to the data. One metric to monitor is volume. While the upswing in BTC and other cryptos have been impressive, the volume is relatively modest.
Should this dynamic change, BTC would be much more intriguing. For now, blockchain assets may be in a wait-and-see mode.
Ethereum (ETH-USD)
With Bitcoin shooting dramatically higher, it was inevitable that Ethereum (ETH-USD) would join in on the fun. As the number two decentralized digital asset by market capitalization, ETH represents a key benchmark for cryptos to watch. Over the past 24 hours since early Tuesday morning, the coin shot up over 19%. In the trailing seven days, Ethereum returned around 25%.
With the impressive performance, the coin’s market cap now stands at over $442 billion. Most significantly, it’s well above the $3,000 level that ETH bulls failed to secure earlier. Moving forward, the possibility exists that $4,000 may be in the cards.
Interestingly, the volume level for Ethereum skyrocketed during the Monday session. This metric hit the highest point since the Jan. 10 session earlier this year. As well, Ethereum blew through the 50-day moving average. However, resistance lies at around the $3,700 level. Investors will need to clear this price threshold before they can start talking about 4K and other lofty peaks.
In the immediate frame, Tuesday’s session is starting off rather slowly. Keep an eye on it.
Tether (USDT-USD)
As a stablecoin, Tether (USDT-USD) doesn’t present capital gains opportunities – at least not for most retail investors. Rather, the deployment of Tether is as a platform for liquidity. By holding wealth in terms of USDT rather than in dollars, investors can quickly engage opportunities that arise in cryptos. That’s especially useful if a big move occurs after U.S. banking hours.
Tether can also provide clues regarding broader crypto sentiment. Specifically, the peg with the greenback should stand at 1:1. Fluctuations above or below this perfect ratio indicate which side of the ledger (dollars or USDTs) is worth more relative to the other. As of this writing, it’s intriguing that the peg dipped to 0.9997. This indicates Tether is losing value relative to the greenback.
That’s an oddity worth investigating, especially if you were planning on going big into virtual currencies. Further, the declining relative value of Tether reminds us of Bitcoin’s modest volume problem. I’m not going to say that cryptos to watch will fall from here. However, it’s worth looking before leaping.
Solana (SOL-USD)
Another entity that saw significant returns was Solana (SOL-USD). In the past 24 hours, SOL gained 6% of market value. Over the trailing seven days, it shot up over 25%. With that move, its market cap stands at $82.72 billion. Although circumstances look quite impressive on paper, prospective investors – especially those new to the game – will want to maintain vigilance.
Adding to the positivity, SOL shot well above its 50 DMA, which comes in at $154.65. Also, it has put a country mile between the current market price and the 200 DMA (just under $116). However, the optimism has a clear counterparty: modest volume levels. Trading participation during the May 20 session was equivalent to that of recent sessions, if not slightly lower.
Now, looking at Solana’s Japanese candlestick chart, it appears that SOL has charted a bearish Harami pattern. To be honest, the sign isn’t crystal clear – few things are in the technical analysis discipline. Still, it’s a dynamic to investigate before you put too much money into this blockchain asset.
XRP (XRP-USD)
One of the more intriguing but also frustrating digital assets, XRP (XRP-USD) saw its market value rise by less than 4% in the past 24 hours. The performance wasn’t much better in the trailing seven days, returning stakeholders about 6%. That’s glaring compared to other cryptos, which have returned significantly more. So, what to make of this latest turn of events?
Frankly, I’m a little bit concerned that XRP stakeholders may need to wait before seeing robust capital appreciation. For one thing, the 50 DMA (coming in around 54 cents) has consistently harassed the controversial coin. Moreover, the 200 DMA (standing at 58 cents) is practically taunting bears at this point. It’s not fun.
What adds to the frustration is the lack of conviction in XRP’s price action. Assessing the tealeaves, it appears that XRP has charted a hybrid bearish Doji star pattern. Essentially, the candlesticks demonstrate that while the bulls may be attempting to push the value higher, sentiment is getting exhausted.
Will this have implications for other cryptos? That’s why I didn’t care for the weak trading in Tether.
Avalanche (AVAX-USD)
As if to add more confusion to the blockchain ecosystem, Avalanche (AVAX-USD) may end up proving that strong single-day sessions don’t always yield sustained optimism. In the past 24 hours, AVAX gained over 11% of market value. That brings the trailing-seven-day return to nearly 25% up. That’s in line with top-performing virtual currencies. However, the technical profile once again clouds the narrative.
On one hand, circumstances look encouraging for Avalanche. Priced around $40.24, AVAX trades noticeably above its 50 DMA ($37.86) and 200 DMA ($36.70). However, the volume level printed during the May 20 session was surprisingly modest. There was an uptick relative to the most recent sessions, sure. However, the acquisition print was noticeably off from what we saw on April 14.
Not only that, the candlesticks show what appears to be a pattern similar to a bearish Doji star. It’s not a perfect representation, to be clear. However, the implication is the same: pensive trading following an unusually robust bullish session.
I’m not saying a reversal will materialize. However, there is at least a possibility that it could.
Chainlink (LINK-USD)
An incredibly volatile (and frustrating) blockchain asset, Chainlink (LINK-USD) has been all over the map. Earlier this year, on an intraday basis, LINK hit $22.87 per unit. About a month later, the coin suffered an intraday low of $11.98. Still, it looks to have turned a corner, returning almost 26% in the past seven days. If only it were that easy.
On one hand, there’s plenty of reason to be bullish. On May 15, LINK was trading hands at about $14 a pop. Fast forward to Monday and LINK “closed” at $17.27. In addition, these upswings occurred on conspicuously large boosts in acquisition volume. That’s what you want to see – rising price confirmed by rising volume.
On the other hand, Chainlink appears to have formed a bearish Harami pattern in the candlesticks. If we read into the implications, we may be staring at a reversal pattern. What makes this framework all the more problematic is that other cryptos have charted similar price action.
Again, I’m not calling for a collapse. But I do want to warn you.
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.
