Traditional markets continued to struggle last week as the Dow Jones lost -2.7% and the S&P 500 fell -2.1%. Cryptocurrency markets on the other hand had an exceptional week. Traditional turmoil didn’t seem to spook digital asset markets last week. Bitcoin and XRP experienced upward momentum, outperforming the stock market. We take a look at traditional market drivers and how Bitcoin and XRP look from a technical standpoint. 

Cryptocurrency Prices 

The last 7 trading sessions, nearly all digital assets in the top 20 by market capitalization have posted positive gains. Below is a select few:

Cryptocurrency Performance – 7 Day
Bitcoin +8.8%
Ethereum +11%
XRP +3.5%
Litecoin +5%

Economic Data Looks Bad

Coronavirus outbreak has completely dismantled traditional markets. Despite the on-going disruption globally, many “analysts” were expecting the markets to calm down. The Federal Reserve has injected trillions into the financial systems the last month and it’s essentially done little to reverse investor sentiment. the figure below displays market returns year to date.

Index YTD Return
Dow Jones -26%
S&P 500 -21%
Oil -53%

Last week markets could not recover due to weak economic data around unemployment metrics. 10 million people have filed for unemployment claims the last 2 weeks. According to President Trump, the worst has yet to come with the Coronavirus. With this being said, unemployment claims are expected to surge in the near term. With unemployment sitting at 4.4% and expected to grow, some investors are getting uncomfortable based on previous recessions. As discussed from the data above, the surge to 4.4% unemployment in March was the highest “over the month” surge since 1975. The figure below looks at unemployment levels prior to previous recessions. It’s also important to note that during the financial crisis in 2008, it took 28 weeks for the economy to hit 10 million unemployment claims. It took our current economy only 2 weeks…..

Unemployment Rate March 2020 4.4%
Unemployment Rate 2008 Recession (month prior) 5%
Unemployment Rate 2001 Recession (month prior) 4.3%

How Long Could The Recession Last?

This is the question that every investor is asking right now. Coronavirus came at the worst time. Traditional markets were arguably doing pretty well before the virus, hitting 50 year lows in unemployment. Despite unemployment, Coronavirus is putting pressures on our debt issues. The last 10 years, corporations have taken out tremendous debt at ultra low interest rates. Corporations are more leveraged than ever which creates potential chaos. Many corporations are now begging for bailouts. In addition you now have the Federal Debt to GDP becoming a nightmare…

  • Federal Debt To GDP 2020: 105%
  • Federal Debt To GDP 2008: 63%
  • Federal Debt To GDP 2001: 55%

With the Federal Government printing trillions out of thin air, it’s creating a ticking time bomb. If the U.S can’t slow the virus, rising unemployment is going to crush businesses and the economy. The administration knows this, and it’s why they’re doing everything in their power to keep the “economy open” as much as they physically can while still practicing “social distancing.”

Bitcoin Technical Analysis

Bitcoins price is currently hovering around $6,700. As we mentioned in previous Bitcoin technical analysis , $6,600 was an initial support line we were watching. Since then, we’ve adjusted this to $6,400. We believe that $6,400 is a strong support to watch right now. If Bitcoins price can’t hold that level, it could test $5,400 on the downside. On the flip side, as long as Bitcoins price can hold $6,400 levels we could see a $7,200 test to the upside. Bitcoins price is getting closer to its halving. Based on miner metrics, it’s crucial that BTC gains some momentum before the halving occurs in May. Current prices will make it very difficult to work on the Bitcoin network post halving.

ETH Price Looks Bullish

Ethereum price is currently sitting at $143. Based on current technicals, it looks poised to test $164 in the short-term. Recently ETH price surged above the 25 day moving average. As we outlined in the chart, historically Ethereum has rallied pretty hard after doing this. To avoid a bull trap we will be watching the $136 support level. If ETH drops below this level, it will shift sentiment pretty quickly. As of now, ETH seems to be in bull mode.

XRP Technical Analysis

XRP price is currently sitting at .18 and experiences similar technicals to Ethereum. Recently XRP traded above the 25 day moving average. Historically, it’s resulted in bullish price action. Nevertheless, we will also be keeping an eye on .1655 on the downside. IF XRP rejects this support level the bull sentiment would evaporate. Right now XRP looks on pace to test .20 in the short term.

Image Source: Pixabay

Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the crypto currency they discuss. The information and content are subject to change without notice. Visionary Financial and its affiliates do not provide investment, tax, legal or accounting advice. This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by Visionary Financial is not an endorsement whatsoever. Visionary Financial was not compensated to submit this article Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.