Key Points
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Most major cryptocurrencies are in consolidation mood in thin weekend trade this Saturday.
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Bitcoin, Ethereum and other major coins are nonetheless on course for healthy weekly gains.
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Uniswap has been the star performer of the day on Saturday, surging over 12% in the last 24 hours.
Market Update
Most major cryptocurrencies are in consolidation mood in thin weekend trade this Saturday, following what has so far been a very strong week. Indeed, Bitcoin is set to end the week nearly 12% higher, which would mark its best weekly performance since March.
The world’s largest cryptocurrency by market capitalization was last trading just above the $21,500 level. The cryptocurrency picked up momentum following a breakout of a pennant earlier in the week. It at one point even made it as high as the $22,400s, but was unable to hold onto a $22,000 handle.
Ethereum, meanwhile, was last trading just above the $1,200 level, up about 14% on the week. The cryptocurrency failed to break above resistance in the form of the late June highs around $1,280. But it is threatening a bullish breakout, which would open the door to a run higher towards the 50-Day Moving Average around $1,450.
Upbeat cryptocurrency sentiment has come in tandem with strength in highly correlated US tech stocks. The resilience of these two high speculative asset classes has come as a surprise to some given this week’s macro developments.
US jobs data released on Friday and service sector survey data out on Wednesday were both stronger than expected and painted a picture of a still-growing US economy. This pushed US yields higher and resulted in a build-up of Fed tightening bets, with a 75 bps rate hike later this month now seen as a certainty.
This might normally be expected to weigh on crypto. But the Nasdaq 100 ended the trading week over 4.5% higher. There seems to be a growing conviction that the US and global economy is weakening towards recession and this will bring inflation back under control.
This conviction is already in the early stages of becoming a self-fulfilling prophecy, with commodity prices down sharply in recent weeks nearly across the board. This may be attracting investors back into speculative assets, despite still elevated concerns about Fed tightening and the macroeconomic backdrop.
The narrative of inflation having peaked will be tested next week with the release of US Consumer Price Inflation data. An upside surprise could see crypto prices swiftly hand back recent gains.
Coin of the Day – Uniswap (UNI)
Uniswap is the best performing cryptocurrency in the top 20 by market cap on Saturday, having gained an impressive 12% in the last 24 hours as per CoinMarketCap. UNI/USD broke above a key level of resistance at $6.0 on Saturday.