Crypto Crossroads: Decoding Market Signals in a World of Uncertainty

Welcome to this edition of the Onchain Edge newsletter, where we keep you in the loop with the most recent market trends, expert analysis, and insightful trade ideas.

In this issue, we explore the S&P500's struggle to break significant resistance levels and the potential implications for the stock and cryptocurrency markets.

We also dive into the US Dollar Index, Bitcoin and Ethereum technical analysis, on-chain metrics, and promising altcoin opportunities. So stay informed and make better investment decisions as we navigate the ever-changing world of cryptocurrencies. Don't miss out on these valuable insights!

Enjoy!

Onchain Edge

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Global market

The S&P500 continues to struggle to surpass the significant resistance level of $4,171, currently trading at $4,155. The more it tests this level, the higher the likelihood of a breakthrough.

A successful break above the $4,171 resistance could trigger an impressive rally in the stock and cryptocurrency markets. This bullish momentum would reflect increased market confidence, potentially leading to further gains across various asset classes. Keep an eye on the S&P500's performance in the coming days to anticipate potential market shifts.

The US Dollar Index (DXY) has remained relatively stable since last week, currently trading at $101.88. However, it appears to be hanging by a thread and might break below the grey trendline soon.

A potential upward move in the S&P500 could cause the US Dollar Index to plummet, pushing it toward $109.

There are strong indications of a potential resistance breakout on the S&P500 and a downward breakout for the US Dollar Index. If both of these scenarios materialize, it will result in a bullish outcome for the crypto market. A strengthening stock market and a weakening dollar often boost investor confidence, driving them to explore alternative investments such as cryptocurrencies.

Technical Analysis

Global market cap with BTC

The global crypto market has increased significantly since last week, at $1.07 trillion. A few days ago, it reached a new peak at $1.14 trillion before experiencing a plunge. Despite the recent dip, the market has shown resilience.

Given these changes, the following support levels are the monthly low of $995.7 billion and the significant support at $944 billion. As the bullish daily trend persists, it's essential to respect it and adjust trading strategies accordingly. This involves primarily seeking long spot entries at significant support areas, such as the monthly low and the major support. There is a possibility that the market may revisit these areas at least once in the coming weeks.

Keep an eye on the critical levels mentioned before, including the 128-week moving average at $1.35 trillion.

Global market cap without BTC (USDC + USDT caps removed)

The altcoin market has finally managed to break above the $500 billion resistance, which has now transformed into support. Currently, it stands at $509 billion after peaking at $550 billion.

It is common for an asset to retest resistance-turned-support levels after a breakout. This is likely what's happening now with the altcoin market. The altcoin rally will continue if the market stays above the $500 billion support.

BTC technical analysis

BTC is currently trading at $29’’269 after peaking at $31,000 a few days ago. If BTC fails to make a new higher high, it will likely retest the accumulation range at $24,400 at least once in the next few weeks. However, before that happens, BTC may experience some sideways movement, allowing the altcoin market an opportunity to rally.

When BTC dominance rises above 49%, it suggests a continuation of the Bitcoin rally, as investors show increased confidence in the leading cryptocurrency. This often results in Bitcoin outperforming altcoins during this period.

On the other hand, if BTC dominance falls below 48%, it indicates that altcoins have more room to rally. This scenario occurs when investors start diversifying their portfolios and shifting some focus towards alternative cryptocurrencies, leading to a potential price increase.

Keep an eye on BTC dominance levels to anticipate potential market movements.

Ethereum TA

Ethereum is currently trading at $1,983 after peaking at $2,120. The Shapella unlock turned out to be a non-event, with ETH's price barely experiencing any drop. The cryptocurrency nearly rallied up to the 128-week moving average but fell short of reaching it. Along with the rest of the market, ETH is now in a correction phase and has printed a new weekly low.

The monthly low is at $1,746, acting as the next significant support level. Interestingly, the current weekly low is approximately the same price Ethereum had at the end of July 2022, around $2,000. Monitor these support levels for potential entries and place your limit orders respectively.

On-Chain Analysis

BTC on-chain analysis

BTC is trading at $29,247, representing a 2.66% decrease since last week. The RSI has dropped to 53.9, moving away from the oversold territory and towards a more neutral position. Comparatively, last week's RSI was 67.9, indicating a stronger market sentiment. The VMC has decreased slightly to 50.8, showing a slight reduction in buying pressure compared to last week.

Considering these indicators, the market seems to be cooling off from its previous bullish momentum. The current state is less risky than last week but demonstrates a weakened upward drive. While the market has potential for further growth, the current technical analysis and on-chain metrics suggest a more cautious approach than last week's strong market conditions.

BTC on-chain movements

More than 6,000 BTC, valued at approximately $174 million, have been observed moving on-chain recently. This significant transfer of Bitcoin could potentially impact the market, depending on the intentions behind the transaction.

There is currently a significant sell wall for BTC on Binance, which may have a cooling effect on the market:

➡️ A $51 million sell wall has been established at $29,600.

➡️ Another sell wall of $23 million is in place at $30,500.

BTC on-chain metrics

The Puell Multiple currently stands at 1.47, facing a downward trending resistance. This value is slightly higher than last week's 1.38 but remains below the significant resistance level of 1.47 mentioned previously.

Over the next few days, it will be crucial to observe if the Puell Multiple manages to break above the downward trending resistance. A successful breakthrough could signal renewed bullish momentum and more positive market sentiment. However, if the resistance holds, it may suggest a continued period of consolidation or potential weakness in the market.

The NUPL has risen to 0.34, reaching a critical resistance level. Many investors are currently enjoying significant profits. However, a concern is that we are at a level where some investors who experienced substantial losses following the June 2022 crash might want to cash out, as they are now at breakeven or slightly in profit if they purchased additional coins at lower levels.

The percent supply in loss reached 29.57%, a critical support level. A break below would mean less loss and more profit in the market.

In conclusion, the Bitcoin market is currently experiencing a cool-down phase, with a decrease in RSI and buying pressure compared to the previous week. The large on-chain movements and significant sell walls on Binance may contribute to this cooling effect. Additionally, as the Puell Multiple faces downward trending resistance, the next few days will be crucial in determining the market's direction. Lastly, monitoring the NUPL and percent supply in loss is essential, as these metrics may shed light on potential market shifts and investor sentiment.

Trade Idea

Level Finance (LVL)

Potential buying area between $7.39 and $7.90 if the market continues to correct. That would be a similar correction and accumulation phase as at the beginning of March.

I’m looking for entries in strong altcoins like arb, gmx, op, rdpx, gns, grail, rndr, and magic.

Conclusion

The market is showing mixed signals, with potential breakouts for the S&P500 and downward movements for the US Dollar Index. These factors could influence a bullish outcome for the crypto market. The global crypto and altcoin markets show resilience despite recent dips, and monitoring key levels is essential for strategic trading. The Bitcoin market is cooling down, with on-chain movements and sell walls potentially impacting the market. In the coming days, keep an eye on the Puell Multiple and NUPL, as they could reveal market direction and sentiment. Lastly, consider exploring entry points in strong altcoins as the market develops.

Cheers,

Onchain Edge