Top 3 Trending Coins: XTZ, XMR Rally Despite Risk-off Market Tone, Eye Bullish Breakouts as APE Struggles

Key Points

• Crypto trading conditions have been subdued since the start of US trade, with most major currencies nursing weekend losses.
• Tezos and Monero are bucking the bearish headwinds from the broader market and eyeing ascending triangle breakouts.
• Apecoin, conversely, is an underperformer following a bearish pennant breakout and is back under its 21DMA.

Market Update

Cryptocurrency market trading conditions have been subdued since the start of the first US session of the week. Most major major cryptocurrencies are trading close to session lows and with substantial losses versus last week’s highs, though at the same time trade higher versus recent lows.

Bitcoin and Ethereum, the largest two cryptocurrencies by market capitalization were last trading lower by about 2.5% each over the last 24 hours, according to CoinMarketCap. BTC/USD was last changing hands just under $20,400, whilst ETH is around $1,140 per token.

Cryptocurrency prices are being weighed by a distinctly risk-averse tone to macro trading conditions. Major stock indices in the US and Europe are trading lower (the Nasdaq 100 is down 1.9%), after a negative session for Asia equities. The risk aversion has also driven downside in government bond yields and upside in the safe-haven US dollar. US 10-year yields were last down about 11 bps to back under 3.0% while the DXY hit fresh multi-decade highs above 108.00.

What’s Hurting Risk Appetite?

Analysts are citing a combination of factors on weighing on risk appetite. US banks kick off the start of the US earnings later this week and investors are nervous that current earnings estimates might be overly optimistic.

Meanwhile, last week’s strong US jobs and service sector activity survey data, whilst easing near-term recession fears, is being cited as a negative for sentiment as it might encourage the Fed to continue tightening monetary policy in an overly aggressive way.

Upcoming US data releases later this week will decide whether the Fed raises interest rates by 50 or 75 bps later this month. June Consumer Price Inflation (CPI) data is out on Wednesday and June Retail Sales data is out on Friday. Traders will recall an upside surprise in the May CPI data sent risk assets into a tailspin after forcing the Fed to up the pace of rate hikes to 75 bps from 50 bps per meeting.

Profit-taking ahead of macro risk events is thus also being cited as a factor weighing on risk assets like stocks and crypto on Monday.

Tezos (XTZ)

The native token to the Tezos blockchain XTZ was last higher by about 3.0% on Monday, extending its gains over the past three sessions to more than 9.0%, despite most other cryptocurrencies having fallen over that some time period. According to CoinMarketCap, XTZ is the best performing cryptocurrency in the top 50 by market cap over the last 24 hours, with gains of over 7.0%.

However, XTZ looks to have run into a key area of short-term resistance. At current levels just under $1.70, it is testing its 50-Day Moving Average and its late-June high. Should the cryptocurrency break this area of resistance, the door is open technically speaking to a run higher towards the early-June highs in the $2.35 area.

Given that XTZ’s technicals are looking positive, this is a very possible outcome. The cryptocurrency has been trending higher since the start of the month, consistently posting higher lows and higher highs. It looks to have formed an ascending triangle, a pattern that often forms prior to bullish breakouts.

Of course, ascending triangles can also break out to the downside. If XTZ/USD was to break below the upwards support trendline that has been in play since the start of the month, the door would be open to a swift drop lower towards the 21DMA at $1.50. A drop under that would bring a test of the sub-$1.20 annual lows from mid-June into play.

Monero (XMR)

The native token to the privacy-focused Monero blockchain XMR was last trading slightly higher on the day on Monday, but up about 6.5% over the last 24 hours according to CoinMarketCap. This makes it the second best-performing cryptocurrency in the top 50 of the last 24 hours, CoinMarketCap data shows.

XMR/USD was last changing hands close to the $130 level, having rebounded strongly from its 21DMA at $122 on Sunday. XMR was unable to test a key area of resistance in the $133-$134 region on Monday, but its upside momentum appears strong, meaning an upside break remains highly likely.

Like Tezos’s XTZ, Monero’s XMR appears to have formed an ascending triangle in recent weeks. An upside break (meaning a decisive move above $133) would open the door to a swift test of the 50DMA just under $150.

Apecoin (APE)

Apecoin is one of the worst-performing cryptocurrencies of the last 24 hours in the top 50, according to CoinMarketCap. APE/USD is down over 5.0% alone on Monday. At current levels just above $4.50, it has fallen over 9.0% in the last two days from above $5.0 per token.

APE is now down nearly 15% from last week’s highs near $5.30 and is now trading with losses on the month of about 2.0%. Apecoin is suffering as a result of the broader risk-off tone to macro trade, but technical selling appears to also be making things worse.

APE/USD broke below a pennant on Monday that had been in play since late June and also broke below its 21DMA for the first time in a few weeks. Now that these levels have gone, traders will be eyeing a test of support in the form of recent lows around $4.22 and around the $4.0 level.

Should things turn sour for the broader crypto market this week, perhaps due to adverse macro developments, APE/USD could easily test annual lows just above $3.0.