Calm After the Strom: Bitcoin Reclaims $57K and Ethereum Above $2K (Market Watch)

Bitcoin dipped to its lowest point in over a week beneath $56,000 but has recovered some of the losses and currently stands above $57,000. Most altcoins have retraced even harder, including a double-digit price drop for the high-flying Ripple (XRP) and Ethereum briefly dropping beneath $2,000.

BTC’s Dominance Increases Despite the Drop

The past several days didn’t go all that well for the primary cryptocurrency. After failing to overcome $60,000 on numerous occasions, the asset reversed its trajectory and headed south.

Bitcoin reached $59,400 on Thursday, but its inability to sustain the upward momentum gave the bears an opportunity to push it down, which led to a $4,000 price drop in less than 48 hours.

Yesterday was an especially harmful trading day for BTC as it slumped to a low of about $55,500. This was the lowest price line since late March.

It’s worth noting that this retracement came as the South Korean kimchi premium normalized following a yearly high. As CryptoPotatoreported, such developments typically lead to a price drop.

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Nevertheless, the cryptocurrency bounced off and has regained more than $1,500 since its low. As of writing these lines, BTC stands just above $57,000.

On the positive side, the altcoin market has retraced even harder. Consequently, bitcoin’s market capitalization has recovered a little less than 1% and stands around 55% after dipping below that level yesterday.

Altcoins Deep in Red

The alternative coins were on a roll in the past week or so, registering new records. Ripple was among the best performers by adding 100% of value in that timeframe, reaching a 3-year high at over $1,10, and becoming the 4th largest cryptocurrency by market cap.

However, XRP has retraced with about 11% since yesterday, despite the company’s CEO claiming that the court hearing against the SEC went well for the payment processor.

Ethereum dropped below $2,000 but has jumped slightly and currently stands at $2,020. Binance Coin (-2%), Polkadot (-4%), Cardano (-6%), Uniswap (-2%), Litecoin (-5%), and Chainlink (-5%) are also in the red.

The situation with the lower- and mid-cap altcoins is significantly more volatile, as one could expect. Helium (-15%), Ontology (-14%), Qtum (-14%), NEM (-12%), EOS (-12%), Waves (-11%), and Bitcoin SV (-10%) have also retraced with double-digits.

On the other hand, WazurX (37%), 1inch (23%), Enjin Coin (23%), Harmony (21%), PancakeSwap (12%), Yearn.Finance (12%) and Conflux Network (10%) have gained the most since yesterday.

Bitcoin, Ethereum And Altcoins Struggle to Recover

Bitcoin price extended its decline below the key USD 57,000 support level. BTC even broke the USD 56,200 support, but the bulls were active near USD 55,500. It is currently (04:30 UTC) consolidating above USD 56,000, and it is facing many hurdles near USD 57,000 and USD 57,200.

Similarly, most major altcoins are still in the red zone. ETH broke the USD 2,000 support before the bulls appeared near USD 1,940. XRP/USD is trimming gains and it is now trading near the USD 0.900 level.

Total market capitalization

Bitcoin, Ethereum And Altcoins Struggle to Recover 101
Source: www.tradingview.com

Bitcoin price

After a clear break below USD 57,000, bitcoin price extended its decline. BTC even dived below USD 56,200, but the bulls were able to protect the key USD 55,500 support zone. The price is now recovering and trading above USD 56,000. An initial resistance is near the USD 57,000 level. The key resistance for a steady increase is now forming near the USD 57,200 level.

On the downside, the USD 56,000 level is a short-term support. The main support is now near USD 55,500, below which the bears might gain strength.

Ethereum price

Ethereum price also followed bitcoin and it broke the key USD 2,000 support. ETH traded close to the USD 1,930 support and it is now correcting higher. There was a break above USD 1,980, but the bulls are facing many hurdles. The first key resistance is near USD 2,020, followed by USD 2,050.

On the downside, USD 1,950 and USD 1,940 are decent support levels. Any more losses might call for a drop below USD 1,900.

BNB, ADA, litecoin, and XRP price

Binance Coin (BNB) recovered losses and it is back above the USD 380 level. BNB is testing the USD 395 resistance, but the key breakout zone is near USD 400. A successful close above USD 400 may possibly increase the chances of a fresh increase towards USD 425.

Cardano (ADA) tested the USD 1.150 support zone, where the bulls took a stand. ADA is rising and it could soon attempt an upside break above the USD 1.200 and USD 1.220 resistance levels. The next key resistance is near the USD 1.285 level.

Litecoin (LTC) trimmed most of its gains after it failed to clear the USD 245 resistance. LTC declined below the USD 225 support, but it found bids near USD 212. The price is now moving higher, but it must gain strength above USD 225 for a steady increase to USD 245.

XRP price topped near USD 1.10 before starting a downside correction. XRP broke the USD 1.000 support and it even tested USD 0.900. It is now consolidating above USD 0.900, with an immediate resistance at USD 0.945. The main resistance is now near the USD 1.000 level.

Other altcoins market today

Many altcoins declined over 8%, including BTG, HNT, XEM, BTT, QTUM, FLOW, XLM, NEO, SNX, EOS, ONT, NEAR, LINK, MATIC, and BSV. Conversely, WRX was able to rally and it cleared the USD 4.50 level.

Overall, bitcoin price is showing a few bearish signs below USD 57,000 and USD 57,200. However, BTC could attempt a fresh increase unless there is a clear break below the USD 55,500 support.

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Bitcoin Price Analysis: Losing $4K in 24 Hours, Can BTC Hold the Critical Support Area?

Bitcoin fell by a sharp 4% so far today as it dropped as low as $55,600. The cryptocurrency had started the month with another attempt to breach the $60,000 benchmark level. Unfortunately, it was unable to overcome this resistance through the week as it set a range between $60,000 and $57,000.

Today’s price drop caused bitcoin to break beneath this range as mentioned above. As of writing these lines, and as seen on the following 4-hour chart, it is currently holding the critical support around $56,200 – $56,100, provided by a short-term .382 Fib and a 4-HR 200 moving average line.

BTC Price Support and Resistance Levels to Watch

Key Support Levels: $56,200, $55,600, $55,000, $54,675, $54,200.

Key Resistance Levels: $58,355, $60,000, $60,750, $61,781, $62,400.

Moving forward, if the bears push back beneath the current support at $56,200 (MA-200 on the 4-hour chart), the first support lies at today’s low around $55,500 (which is also a descending trend-line started forming towards the end of January).

This is followed by $55,000, $54,675 (.382 Fib), and the critical level of $54,200 (50-days MA). This last support is further strengthened by an ascending trend line that has been in play since early March 2021.

On the other side, if BTC price will hold here, the first resistance now lies at the daily MA-20 around $56,800. This is followed by $58,355 (February highs), and the crucial area of $60,000. The latter had been rejected at least 5 times over the past month.

The daily RSI has now crossed beneath the midline, indicating bearish momentum has taken control within the market, in the short term. This comes after the RSI produced a bearish divergence signal earlier in the week as we mentioned here in the previous price analysis.

IW Long Reads: No wasting time – Are we doing enough to meet the goals of the Paris Agreement?

It has been more than five years since the Paris Agreement on climate change was signed by 191 member states, whose official aim is to limit global warming to well below 2ºC compared to pre-industrial levels and make every effort to limit this to 1.5ºC.

Since that historic day in 2016, much has been done in pursuit of this goal. Governments and companies across the world made zero carbon pledges, tactics were discussed, and national guidelines were introduced.

The past two years have seen a particular acceleration in the fight against climate change, as the number of commitments to net zero from governments and businesses doubled and billions poured into ESG investment strategies.

Recent commitments by China, Japan, South Korea and the US mean that today around three fifths of global greenhouse gas emissions are covered by net zero targets.

But are the pledges in place really enough to stop the world from spiralling into a disaster scenario? What proof do we have that companies and governments will honour their commitments? And what more can be done in the fight against global warming?

Jonathan Bailey, head of ESG investing at Neuberger Berman, says that while we are now seeing companies and governments take tangible steps to limit emissions, such as the plan by some national and local governments to ban the sale of internal combustion engine vehicles in the coming decades, “if our objective is to limit warming to 1.5ºC then the aggregate targets that we have in place at the moment are not enough”.

Harry Granqvist, senior ESG analyst at Nordea Asset Management, even goes as far as to say that “the policy pledges that the world’s countries have so far made are critically insufficient for delivering the constraints on global warming set out in the Paris Agreement”.

Rebecca Craddock-Taylor, director of sustainable investment at Gresham House, is also sceptical about the likelihood of meeting the emissions reductions targets required by 2030 to meet the Paris Agreement, pointing to “the way net zero targets are being set but not always audited”.

“Many net zero targets have been publicised with huge marketing campaigns, but fail to highlight the small print – such as only covering scope 1 or 2 emissions, or planning to store carbon using technology that is not available or not viable, while some rely too heavily on carbon offsetting,” she says.

“There needs to be an agreement on how net zero targets can be set, how much reliance can be placed on carbon capture technology and who will audit them to ensure they align with the Paris Agreement objectives.”

Granqvist agrees that an increasing number of companies are making “unsubstantiated claims” about net-zero emissions which are going “largely unchecked”.

“Problems include incomplete emissions coverage, short-sighted decarbonisation horizons, a lack of concrete strategies to deliver on stated ambitions, and an excessive reliance on so-called ‘avoided emissions’ or carbon offsets,” he says.

“We see that institutes such as the Science-Based Targets Initiative and the Transition Pathway Initiative play a critical role in providing checks and balances to corporate emissions targets, and it is positive that more and more companies are being assessed by [them], but we are still far away from the type of transparency and credibility that we need to see.”

Short-term targets

Part of the issue, according to Esmé van Herwijnen, senior responsible investment analyst at EdenTree Investment Management, is that current net zero targets are long term, but companies and governments fail to describe how exactly they will get there.

“Net zero targets need to be followed by short-term, medium-term and long-term targets to reduce emissions,” she says.

To combat this issue, she wants to see “an increase in the number of companies that are setting Science Based Targets”, which she believes will incrementally lead to the Paris Agreement goals being achieved.

Ben McEwen, climate change investment analyst at Sarasin and Partners, also expects that the prospect of a carbon border tax, which is part of the European Commission’s European Green Deal, could incentivise heavy polluters, such as Australia, to improve commitments to maintain their trade relationship with the EU.

But he adds that “despite the ratcheting up of corporate and national level targets, we need to see a sustained pace of emissions cuts if we are to achieve the Paris Agreement goals”.

Positives of Covid-19

The coronavirus pandemic, though devastating for global economies, has brought some positives for the fight against climate change, drawing further attention to the importance of lowering global emissions.

As transport and industries were brought to a standstill, global carbon emissions fell, albeit by just 6.4%, according to academic research.

However, Gresham House’s Craddock-Taylor warns this drop could “lull us into a false sense of security”, and as restrictions lift, “emissions could rise significantly, with people booking more foreign holidays and continuing to avoid public transport” – something that we are already beginning to see.

Granqvist says: “During the height of the lockdown, we could see that global emissions fell at about the same rate that they will need to fall every year until 2050 if we are going to meet the 1.5°C target.

“What the pandemic taught us about emissions is that the type of reductions that are needed going forward can only be delivered by large-scale systemic change, and a return to normal will not cut it.”

Craddock-Taylor also notes there is a risk of greenwashing if emissions reduction targets are set in relation to 2020 emissions levels, since “reducing emissions from a lower base is far easier, but will not help us limit global temperatures to the extent we need to”.

However, McEwen believes that Covid has inspired “a collective awakening that a different way is possible and that the climate crisis can no longer be ignored”, as well as an “increased political ambition to address the climate crisis”.

“The Covid crisis has placed economies and societies at a critical juncture, as fiscal recovery packages could entrench or partly displace the current fossil fuel-intensive economic system,” he says.

“This critical topic has been the subject of extensive analysis and it has been shown that there are abundant policies with high potential on both economic multiplier and climate impact metrics. Building back better is possible.”

Disclosures

For corporates, a crucial aspect of measuring the progress towards net zero targets is disclosure against established frameworks, such as the Task Force on Climate-related Financial Disclosures (TCFD) and Sustainability Accounting Standards Board (SASB), according to Neuberger Berman’s Bailey.

“In the next few years, we believe there will be more data as reporting requirements increase, but the key for investors will be to find signal among the noise,” he says.

He believes investors will be increasingly “judged on whether they helped move companies in the right direction, or were just passive onlookers”, adding that he expects “more clients to explicitly ask us to set net zero investment objectives for their portfolios in the coming years”.

For asset managers, the pressure is also increasing on the regulatory side, with the recent introduction of the Sustainable Finance Disclosure Regulation (SFDR) in the European Union aiming to stamp out greenwashing and hold investment firms accountable on ESG issues, including climate targets.

Similar national frameworks are expected to be implemented outside the EU in the not-too-distant future.

Granqvist’s concern, however, is that while “net-zero is a full value chain endeavour”, at this stage “we do not yet have adequate full value chain methods to measure it”.

He believes there is a need for concrete implementation strategies and robust climate governance frameworks for net zero commitments to truly be effective, but while this issue is “increasingly well understood by the financial industry, we just do not have all the solutions yet”.

Asking the questions

However, this does not mean asset managers do not have the tools at hand to push for positive change. The key question to ask, Granqvist says, is: “When emissions leave our portfolios, where do they go?”

“This means we actively seek out investments in companies that are reducing their own emissions, rather than simply tilting our portfolios towards lower-emitting sectors and countries that might in fact not be delivering any emissions reductions at all,” he says.

As climate metrics improve, Granqvist expects to see “increasing maturity and uptake of so-called corporate ‘temperature scores'” by investment firms, as well as “more scalable and sophisticated approaches to investments in climate solutions providers”.

Naturally, this comes with its own challenges, such as methodologies that do not take into account the positive effects of some products and therefore unfairly penalise climate solutions providers, such as wind turbine manufacturers.

However, the momentum is there to bring about meaningful carbon reduction, and that is encouraging.

After all, there is a reason the ten years leading up to 2030 has been labelled the ‘decade of action’ for the environment – we simply do not have any more time to waste.