Last week, cryptos to watch got their first real scare of the year. Following the media firestorm over the original blockchain asset’s halving event, all eyes shifted to the Federal Reserve. After combating stubbornly elevated inflation, the central bank appeared to suffer setbacks as energy costs sent consumer prices soaring even higher. Then came the April jobs report to the rescue.
Ordinarily, an economy wants a robust print in its employment readings. More people with jobs equates to higher stability and satisfaction. That’s good for policy across the board. However, the U.S. labor market has been on fire, meaning more dollars were continuing to chase after fewer goods. It raised the ugly prospect of the Fed raising interest rates instead of lowering them.
Instead, the economy added fewer jobs than analysts had anticipated. That means it’s quite possible the Fed could eventually lower interest rates as previously planned. Further, a gradual reduction in added employment opportunities suggests that a soft landing is possible.
That’s good for stability and that may be positive for virtual currencies. Still, investors will need to see convincing price action before they feel confidence in a potential upcoming rally. On that note, below are seven cryptos to watch this week.
Bitcoin (BTC-USD)
As per usual, everything crypto starts and ends with Bitcoin (BTC-USD). Over the last 24 hours since early Tuesday morning, BTC slipped a modest 1%. Over the trailing seven days, the benchmark decentralized digital asset gave up around 0.8% of market value. Of course, the key factor here is Bitcoin’s resilience.
At the end of April, Bitcoin suffered a huge drop. On the first of May, the bears again attacked the blockchain asset. On an intraday basis, BTC had fallen to around $56,516 before trading sentiment settled down. However, it was the release of the April jobs report on May 3 that decisively sent Bitcoin above the critical $60,000 threshold.
It’s an obvious point but for the benchmark crypto to avoid a nasty correction and to continue on a forward trajectory, maintain the 60K level will be critical. It’s arguably non-negotiable. After all, during the boom in cryptos in 2021, the 60K price point was the milestone.
Of course, investors must determine if the latest move is credible. For that, watch the volume levels. Ideally, you’d want to see the market peaking up this relative discount (compared to BTC’s peak).
Ethereum (ETH-USD)
While Bitcoin managed to mitigate affairs with a soft session, Ethereum (ETH-USD) wasn’t so lucky. In the past 24 hours, ETH dropped almost 3% of market value. Over the trailing seven days, the number two crypto by market capitalization suffered a 4% decline. However, the main point with the digital asset was that it managed to regain control of the $3,000 level.
At the end of April, the bears clobbered ETH, sending it down from a price of around $3,200 to an intraday low of $2,917. Another bout of volatility the following day saw Ethereum plunge to $2,815. However, the bulls managed to stabilize the fallout. Then, the jobs print came in lower than anticipated, resulting in speculation regarding monetary policy.
Subsequently, ETH managed to climb beyond the 3K level. However, recent volatility again has disappointed longtime stakeholders. At time of writing, the coin trades hands at around $3,051.
For Ethereum and other cryptos to watch, the bulls need to look alive. While I’m encouraged by the “stickiness” of the 3K price point, investors should look for market participants to pick up the discount. After all, ETH peaked this year at over 4K.
Tether (USDT-USD)
As a stablecoin, Tether (USDT-USD) doesn’t fluctuate much in value. If it did, it wouldn’t be much of a stablecoin. However, you can potentially extract useful information about sentiment for other cryptos to watch based on the relative value of USDT; that is, if USDT consistently rises above its dollar peg, it may indicate more demand for virtual currencies. And the opposite dynamic may also ring true.
Over the past seven days, there has been a decisive sentiment shift in Tether. Between the final session of April prior to the release of April jobs report, USDT spent considerable time below its 1:1 ratio with the greenback. However, since the employment data came out, Tether has been trading at or above its dollar peg.
In my opinion, this fluctuation makes perfect sense. When it appeared that inflation was running amok, holding fiat dollars represented a more viable position than holding Tether coins. However, with the encouraging implications for inflation, risk-on sentiment for cryptos returned.
Recently, though, the USDT has been somewhat weak relative to its dollar peg. It’s a metric to monitor as you decipher volume trends in other cryptos to watch.
Solana (SOL-USD)
Moving over to the non-Ethereum altcoins, Solana (SOL-USD) has been a standout among the top 10 cryptos to watch by market cap. Over the past 24 hours, SOL gained over 6% of market value. And in the trailing seven days, it moved up almost 15%. The key for SOL this week is that it has moved above the psychologically significant $150 level. It’s got to keep moving, though, to avoid further technical damage.
One element that I didn’t really care for is the pattern of lower lows. On April 17, SOL “closed” (so to speak) at $131.89, per data from StockCharts. Later, on April 30, SOL closed at $126.68. From my perspective, it appears that the bears are pushing the price down, attempting to find where the weaknesses are.
Fundamentally, I don’t like this negative probing action because a disappointing news item – let’s say a series of gangbusters job reports – could sway the Fed to raise interest rates. That would likely be a major no-no for cryptos. With the technical damage done, virtual currencies like SOL could tumble badly.
What could assuage concerns is a more robust price action from here on out. However, declining volume trends represent a key area to watch.
XRP (XRP-USD)
While many cryptos this week presented an ambiguously positive framework, XRP (XRP-USD) is, in my opinion, decisively frustrating. It doesn’t look like it in the immediate print. For example, in the past 24 hours, XRP gained over 1% of market value. And in the trailing week, the controversial coin gained more than 4%. Those are good stats.
However, in context, the positive “feelies” fade out. To be sure, XRP did see a noticeable spike higher following the disclosure of the April jobs report. But the problem for XRP is that on April 12, the digital asset suffered a sharp series of declines. When the dust settled, XRP was trading at around 43 cents.
Now, at the moment, the coin has reclaimed the 54-cent level. However, prior to the April fallout, XRP was trading at over 60 cents. So, the blockchain asset still has some ways to go before reclaiming its prior support baseline. From there, additional work is necessary to get to around the 64-cent level.
In other words, the coin needs a big boost to restore credibility in the eyes of mainstream investors.
Toncoin (TON-USD)
A recent addition to the crypto top 10, Toncoin (TON-USD) has been choppy in its latest performances. Over the past 24 hours, TON lost more than 1% of its market value. However, in the trailing seven days, it’s up nearly 9%. That’s nothing to scoff at yet there are concerns here.
Regarding immediate goals, it was important for the bulls to drive the price above the psychologically important $2 level. On April 30, TON traded hands at around $2 before falling to $1.91 at the low. Another bout of volatility saw TON drop to an intraday low of $1.84 during the May 1 session. Eventually, the bulls stabilized the downcycle. Come the April jobs report and sentiment popped higher.
Still, there’s a feeling that Toncoin needs to do more to restore investor confidence. Currently, the 20-day exponential moving average imposes upside resistance. Further, TON trades below its 50 and 200-day moving averages.
As one of the “cheap” cryptos, you’d want to see the market pick up the relative discount (TON was trading at $3 a few months back). Without this pickup, TON may be too choppy for beginner investors’ tastes.
Cardano (ADA-USD)
Let’s finish out this discussion for cryptos with Cardano (ADA-USD). Like some of the other virtual currencies this week, ADA incurred a “meh” performance. Over the past 24 hours, the popular altcoin got hit with a near 2% decline. In the trailing seven days, it slipped 1%. Technically, ADA represents one of the more frustrating blockchain assets.
On the positive side, it’s been critical for the bears to avoid crossing beneath the 44-cent level. While Cardano fell below this point, it was only briefly on intraday bases. However, on the not-so-pleasant side, ADA has failed to convincingly swing higher from the April jobs report. Yes, there was an initial pop on May 3. However, since Saturday, ADA printed a series of red candlesticks.
Currently, the 20-day exponential moving average imposes upside resistance. Further, ADA continues to trade belo9w its 50 and 200 DMAs. That’s not going to do much for confidence. The key here is that on April 12, Cardano suffered a catastrophic decline. So, unless there is a massive swing higher that brings ADA back up to near the 60-cent level, skepticism may be the guiding emotion.
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.
