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Top 3 Trending Coins: SAND, MATIC, BNB Outperform But Look Technically Vulnerable

By:
Joel Frank
Updated: Jul 1, 2022, 13:31 UTC

SAND is the outperformer in the crypto top 50, while MATIC and BNB are the strongest in the top 20.

Top 3 Trending Coins: SAND, MATIC, BNB Outperform But Look Technically Vulnerable

Key Points

  • Bitcoin recently fell back to the low-$19,000s after closing out a historically weak quarter on Thursday.
  • SAND is the outperformer in the crypto top 50, while MATIC and BNB are the strongest in the top 20.
  • Nonetheless, MATIC and BNB technicals look poor, suggesting further pain ahead.

Market Update

Cryptocurrencies are on the back foot on Friday, with most major coins on course to post a sixth success session of losses. Total cryptocurrency market capitalization was last around $840 billion, down just under 3.0% on Friday and down around 13% from last weekend’s highs in the $960s billion.

Bitcoin was last trading in the low-$19,000s, down about 4.0% on the day and eyeing a test of this week’s lows just under $18,600 and then the annual lows below that in the mid-$17,000s. The cryptocurrency closed out a historically bad Q2 on Thursday, shedding around 56% of its value during the quarter. Over that same time period, total crypto market cap dropped around $1.2 trillion to around $860 billion.

Inflation surprised to the upside across most major developed economies in Q2, worsened by various adverse supply-side developments (like the Russo-Ukraine war and lockdowns in China). This has simultaneously worsened the global growth outlook and forced major central banks like the Fed and ECB to accelerate monetary tightening plans.

Weaker growth and more hawkish central banks are a toxic mix for speculative risk assets like crypto and (many) stocks, so severe cryptocurrency price downside should be too surprising. For what it’s worth, stocks also suffered a historically bad quarter, with the S&P 500 having its worst start to any year since 1970 amid a more than 20% drop.

Over the last few days, now familiar themes of growth and inflation concerns have been in focus and have weighed on crypto (and stock) prices. May US Core PCE data on Thursday showed that while there are some signs of US price pressures having peaked, inflation remains well above the Fed’s 2.0% target. Meanwhile, May US Consumer Spending data on Thursday was weaker than anticipated and resulted in many economists further downgrading their GDP growth expectations for Q2.

Some now think that the US economy is in a technical recession (defined as two consecutive quarters of negative real GDP growth). Data on Wednesday showed that US GDP growth in Q1 this year was even weaker than forecast at an annualized pace of -1.6% amid weaker than initially thought growth in consumption during the quarter.

The big question for investors now is that if 1) the US economy is entering a new downturn and 2) inflation is showing signs of peaking, will the Fed ease off a little regarding rate hikes? Not yet, is the message that Fed policymakers including Chairman Jerome Powell gave across to investors this week.

Various policymakers lined up to offer support for another 75 bps rate hike later this month. Meanwhile, Powell was keen to emphasize that in a trade-off between getting inflation under control and supporting growth, the Fed’s priority strongly remains the former.

One risk that could weigh on risk appetite (and thus crypto and stocks) in the second half of this year is that, amid weakening growth, the Fed stays ultra-hawkish and markets begin to think it is making a mistake. Fears of a hawkish Fed mistake, such as most recently back in late 2018, have a history of battering sentiment.

Alternatively, perhaps the slowdown in growth isn’t as bad as feared, inflation does start coming down significantly in the second half of this year and markets deem the Fed as having judged things right. In such a scenario, we might plausibly be looking at a pretty solid recovery for global equities and crypto markets.

Here is a list of the top three trending cryptocurrencies on Friday.

The Sandbox

According to CoinMarketCap data, The Sandbox’s native token SAND is the best performing cryptocurrency in the top 50 by market cap over the last 24 hours with gains of around 13%. Investors aggressively bought Thursday’s brief dip below the $1.0 level and the 21-Day Moving Average at $0.99.

SAND/USD is now back to trading around $1.09, with the pair admittedly having come off about 7.0% from earlier session highs above $1.17. It’s been a choppy few weeks for the cryptocurrency.

Having traded within $1.20-$1.50ish ranges throughout the second half of May and into the start of June, a four-day drop from 10 to 13 June from around $1.30 to under $0.90 saw SAND shed a third of its value. But then between 19 to 25 June, SAND posted a stunning 60% rally from around $0.80 to the upper-$1.20s.

For now, the cryptocurrency seems content to range between its 21 and 50DMAs. But traders should expect continued choppiness in the weeks ahead that could easily see SAND/USD swinging between $0.80-$1.50ish levels once again.

SAND/USD
SAND/USD has had an erratic few weeks. Source: FX Empire

Polygon

According to CoinMarketCap, the native token to Polygon’s blockchain MATIC is the best performing cryptocurrency in the top 20 by market cap over the last 24 hours, with gains of around 9.0%. Indeed, at current levels around $0.46, MATIC/USD has enjoyed a solid bounce from Thursday’s sub-$0.42 lows.

However, MATIC’s technicals are not looking good. The pair is down nearly 7.0% from earlier session highs near $0.50 and is back below its 21DMA at $0.47. The cryptocurrency has faced constant selling pressure since failing to break above a medium-term downtrend and its 50DMA earlier in the week.

Bears are eyeing a breakout to fresh weekly lows, which would open the door to a test of June’s annual lows in the low-$0.30s.

MATIC/USD
MATIC/USD looks vulnerable to further downside. Source: FX Empire

BNB

The native token to the Binance Smart Chain BNB is the second-best performer in the crypto to top 20 in the last 24 hours with gains of just over 5.0%, according to CoinMarketCap. Indeed, at current levels around $218, BNB/USD has enjoyed a solid recovery from Thursday’s lows in the $205s.

However, this masks a bearish near-term technical outlook. BNB once again failed to push above its 21DMA at $226 on Friday and since this failure, has dropped around 3.5%. The 21DMA has more or less acted as an upside barrier going all the way back to early April, nearly three months ago.

In that regard, it perhaps isn’t too surprising to see the bears regaining control. Bears will be targetting a test of this week’s lows in the immediate future. A break below this level and the $200 mark could open the door to a run lower towards earlier annual lows in the low $180s.

BNB/USD
BNB/USD also looking vulnerable after failing to get above 21DMA. Source: FX Empire

About the Author

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018. Joel specialises in the coverage of FX, equity, bond, commodity and crypto markets from both a fundamental and technical perspective.

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