After starting the first few months of 2023 on a largely positive note, cryptos to watch have failed to make much forward progress, thus raising concerns among sector advocates. In particular, blockchain miners present the most recent headwind, with many moving to the sidelines. As well, broader integration issues cloud the virtual currency space.
First, publications focused on decentralized assets have reported that blockchain miners dumped a significant amount of the benchmark cryptocurrency over the weekend. Prior to this event, the flagship asset experienced a significant drop in volatility. But because cryptos to watch tend to move robustly in one direction or the other, the present sideways consolidation causes some anxiety.
Second, it’s possible that virtual currencies could skyrocket from here if the U.S. Securities and Exchange Commission (SEC) greenlights a crypto-focused exchange-traded fund that’s been at the heart of blockchain-related headlines. However, former US SEC chief John Reed Stark stated that those hoping for a spot crypto ETF shouldn’t hold their breath.
Put another way, it’s been a tough few weeks for cryptos to watch. Below are the assets to watch over the next seven days.
Cryptos to Watch: Bitcoin (BTC-USD)
Another frustrating outing in the books for Bitcoin (BTC-USD), the ongoing discussion centers on when it will break decisively above the $30,000 level. Over the past few sessions, BTC has done so but in spurts. Over the past 24 hours, the flagship crypto to watch is down just a hair below parity. In the trailing week, BTC gained about half a percent, hardly exciting stuff.
Moving forward, much will depend on whether the US SEC will approve a spot Bitcoin ETF. Again, the former US SEC head believes that it’s unlikely. However, he added that if a Republican wins the next presidential election, the regulatory agency may reduce scrutiny toward cryptos to watch. Still, that’s a bit far away. Investors need to know what might happen in the immediate future.
Frankly, market participants may want to adopt a conservative approach. With the combo of regulatory uncertainty and Bitcoin miners selling their holdings to survive the sector-wide drought, the upside may be limited. I hate to leave it on an ambiguous note but more clarity will be needed to opine effectively.
Cryptos to Watch: Ethereum (ETH-USD)
Moving to the number-two cryptocurrency by market capitalization, Ethereum (ETH-USD) doesn’t appear to have sparked a selloff within its stakeholder community. Indeed, you could say the opposite has happened. According to a CoinDesk report, former President Donald Trump holds up to $500,000 in an Ethereum wallet.
So, Stark appears to be accurate in his assessments about the broader integration of cryptos. If a Republican president emerges – and if it’s Trump – the virtual currency complex should enjoy a more favorable backdrop.
Still, before you go to the polls, you should be aware that Ethereum, too, failed to spark much upside mobility. As of this writing, ETH trades at just under the $1,850 level, down 0.3% over the past 24 hours, and up 1% in the trailing week. Again, these aren’t remarkable stats.
Regarding implications for other cryptos, ETH’s price action remains frustrating. Presently, it’s stuck beneath its 50-day moving average (at $1,877) and above its 200 DMA (at $1,795). Given the pensive action and low volume, it’s probably best to wait for more news.
Tether (USDT-USD)
A stablecoin pegged one-to-one with the dollar, Tether (USDT-USD) operates under a different paradigm compared to most other cryptos. For the latter category, the point of participation centers on capital gains: basically, buy low and sell high. With Tether, excepting unusual gyrations, you should be able to acquire and sell USDT at $1 per unit. Of course, I’m also discounting transaction fees in this statement.
So, it’s really odd to see Tether trade at anything other than 1:1. If there are deviations, they should be extremely minute. However, at the moment, USDT trades at 0.9989. Over the past 24 hours, the stablecoin lost 0.05% of its market value. It’s also down 0.01% over the past one-week period.
To be fair, these are small figures. However, to witness USDT down more than 0.1% against its peg to the dollar is quite unusual. It’s also not the first week where we’ve seen Tether become ever so slightly untethered to the greenback. With all that’s been going on in cryptos, I believe it makes sense to trim your USDT exposure to a comfortable level. You can always buy back later if you want.
XRP (XRP-USD)
Following a major legal victory with the US SEC, XRP (XRP-USD) – the creation of Ripple Labs – immediately gained credibility among investors. Finally, one among the tens of thousands of cryptos received legal precedent. Not surprisingly, XRP immediately skyrocketed, hitting an intra-day high of 93 cents on the July 13 session. However, following a few sessions of back-and-forth trading, XRP has struggled to gain traction.
In the last 24 hours heading toward the start of the Aug. 15 session, XRP managed to gain a bit under 1%. Over the trailing one-week period, the controversial coin returned almost 2%. That’s quite a respectable tally compared to many other major cryptos. Still, XRP has some work to do to restore broader confidence.
Over the past few weeks, XRP’s volatile trading has the digital asset sitting on its 50 DMA at 63 cents. Interestingly, the price has been falling against a backdrop of fading volume. It’s possible that this setup could imply a weakening of the downtrend trend and that a reversal may materialize. Still, that’s a tough call to make when the fundamentals aren’t exactly supportive.
Solana (SOL-USD)
Solana (SOL-USD) bulls aren’t taking the sector weakness lying down. Instead, they’re pushing SOL upward in a bid to instill wider confidence. Right now, SOL trades at $24.95, creating some gap with its 50 DMA at $23.09. Further, the 200 DMA sits at $21.51, indicating that the optimists have taken control of Solana for the moment.
Where SOL goes next is anyone’s guess. In the past 24 hours, SOL managed to print a return of over 3%, which is the best performance stat among the top 10 cryptos by market cap. Also, another best comes in the form of the trailing-week performance, up over 8%.
Still, the drawback regarding the Solana setup is that it’s not the most convincing of price action. Specifically, bullish volume peaked recently on July 14 at 5.9 million units. Since then, volume levels have generally faded. In contrast, the Solana price has been moving higher since Aug. 5. Therefore, the contrast between rising price and lower volume indicates low confidence.
Cardano (ADA-USD)
A popular asset, but one that also frustrates investors, Cardano (ADA-USD) is facing another critical juncture. First, its near-term performance stats aren’t exactly lighting up the board. In the last 24 hours, ADA moved up less than half-percent. In the past one-week period, the coin slipped about a tenth of a percent.
However, more worrying is its performance in the candlesticks, so to speak. Right now, ADA trades at 29 cents a pop. That’s more than 3% below its 50 DMA, which comes in at 30 cents. Even worse, the 200 DMA stands at 34.8 cents. In other words, ADA falling beneath these two market gauges doesn’t do much for confidence.
And it’s also possible that the bears could be lurking after smelling the blood in the air. In my opinion, the bare minimum price that ADA needs to hit is 36 cents. That’s noticeably above the 200 DMA. From there, ADA must start moving toward the 40-cent level. Among the major cryptos, this one may be the riskiest.
Dogecoin (DOGE-USD)
An interesting but ultimately risky decentralized asset, Dogecoin (DOGE-USD) tends to be a divisive trade or investment: either you love it, or you hate it, with few opinions landing outside this binary construct. However, one major benefit to DOGE is that it’s somewhat disassociated with other cryptos. Of course, the sector tends to follow Bitcoin’s lead. But sometimes, pockets of untethering occur, which open speculative opportunities.
Over the past 24 hours, Dogecoin saw practically no benefit compared to other cryptos, returning a hair over parity. However, in the trailing week, DOGE gained almost 2% of market value. That’s nothing under the present malaise. Still, investors aren’t getting great signals as to where the meme coin might move next.
Technically, the issue is that with DOGE trading at 7.5 cents, it’s sitting just beneath its 200 DMA. As well, its 50 DMA isn’t too far behind at 7.2 cents. More than likely, the bulls need to start moving this asset. Unfortunately, fading volume levels present a disconcerting framework.
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.
