Crypto Investor Report, August 13
Summary
After tagging the $12,500 level, Bitcoin has been retracting and consolidating in a consistent fashion, finding support, first in the mid $11k, and now in the round figure itself.
If that level manages to sustain, and price action evolves such that the weekly candle closes above the $12k level, then we might be in a game-changing situation, and the price will probably escalate further from that level. Otherwise, in the event of failure, some support in the mid $10k should provide a nice opportunity to re-build positions and to increase the exposure. Short-term technicals seem to favour this last scenario, in confluence with the need of more buying pressure that seems to be lacking lately. Falling down the psychological $10k also gains more credibility, as increased volatility usually strikes in these present market conditions.
Bitcoin’s dominance tagged the 70% level and is now retracting slowly, down to mid 68’s. Nevertheless, the top major altcoins are still underperforming it on average and on a weekly timeframe. Highlight needs to be made to Binance Coin (BNB), as the privileged storage of value for investors — once again — when the markets decide to take the downturn.
In the Spotlight
- SEC postpones the decision on three Bitcoin ETF proposals
- China to roll out its central bank digital currency
- New Zealand’s Tax Office makes it legal to pay salaries in crypto
- 15 countries to develop a crypto transaction tracking system
- IBM and Tata become the first big techs to back Hedera Blockchain
- IBM files a patent for a Blockchain-based web browser
Market Overview
The weekly performance of digital assets led to a decline in the total market capitalization. Seven days ago, the net sum of all crypto assets was over $307 Bn and now sits at near $290 Bn, a 5.5% depreciation. The average daily traded volume has also declined significantly: from the range $65–70 Bn on the previous week, to the range $40–45 Bn on the past few days.
Regarding dominance, Bitcoin’s share appears to have flattened out. After reaching over 68%, it has topped out in 69.93% on the 9th of August and has, since then, retraced back to 68.60%. We need to go back to March of 2017, to recover the last time Bitcoin’s dominance was standing well above 70%.
Looking into the digital assets with at least (or near) $1 Bn of market capitalization, the weekly performance was slightly negative. Bitcoin led the pack with a seven-day negative performance of -2.91% and is now trading at $11,041.51, at the time this report is being written.
Highlight to Binance Coin (BNB) who managed to counter-perform the market and achieve over 5.7% of weekly gains, aiming once again to try to break through the 30 dollar mark.
On the other hand, Ethereum (ETH) and Litecoin (LTC) with near 9% of losses, were definitely the underperformers of the week. The first is now trading at $208, hoping that the 200 dollars psychological support level holds out in the interim, while the latter is now trading at below $85.
Regarding the top-20 listing by market capitalization, no notorious change to flag. Ethereum Classic (ETC) raised one position in the charts, overtaking Cosmos (ATOM) in the 17th position.
The full list is still lower-bounded by Ontology (ONT), but now with a market capitalization of $454 Mn. NEM (XEM) was the other coin that has also fallen down below the $500 MM threshold during the course of last week.
Bitcoin Market Analysis
Bitcoin has been experiencing a consolidation stage during the last seven days, after peaking at near $12,400. The present price action has drawn the shape of a descending triangle, which usually tends to resolve itself to the downside.
So far, the $11k mark is holding pretty well, but the short-term technicals are hinting for some additional downward pressure.
Let’s take a look at the overall picture and check how this short-term price action fits into the macro perspective.
The weekly chart is printing an interesting bullish picture, after bouncing off the key area where the green cloud and the 38.2 Fibonacci level overlapped each other. This has defined a very clear trading range, bounded up by the candle body closes in the mid $11k region.
And here’s the interesting part of the macro picture: the level region below $12k is precisely a significant weekly top which was established previously in late February 2018 as a bull trap.
If we see the weekly chart closing above $12k, we might well refocus our trading scope to the upside. That would propel the next leg up and unlock a new trading range between $12k up to $16k.
But until that weekly breakout happens, we need to focus on the current region. The daily chart shows a re-testing of the upper side of the green cloud, which is acting as a sort of cushion down to $10,500. The short-term daily momentum is shifting to bearish and that typically requires time — from 4 days to 3 weeks — to re-align with the macro prevailing trend.
On the 4-hour chart, the picture shows pretty clear confluence levels that may act as support during these corrective days. The first support zone has barely been pinned and it’s currently holding the price above the $11,000-11,100 range.
If that region would be penetrated, Bitcoin has some additional support at the $10,300 region. There we find a significant confluence area that might present interesting buying opportunities.
Overall the picture remains corrective provided that $9,500 would hold, and therefore buying the dip might be the most suitable mindset for the current trading environment.
Here is another perspective of the same landscape, based on the traded volume profile:
The already mentioned $10,500 potential support area is located at a lower end of a price range which requires more back and forth. Below it, $10k and slightly below are value low bargain prices which will likely attract significant interest and are thus flagging a potentially powerful pivot zone, should the mid-10s not hold.
Altcoin Analysis
We’re seeing many top altcoins moving in sync and setting stepping stones to build a potential bullish structure. If that shift gets confirmed, we might use it to trade some altcoins against BTC and increase our BTC holdings to be capitalized during the next move up.
The dominance charts are still favouring Bitcoin over the major altcoins, even though on the shorter term there might be good chances for Bitcoin to pause and allow some room for the top altcoins to shine.
Looking Forward
This week we are mainly interested in reloading our crypto positions at the $10.3k-$11k range, with the intention to ride the next leg up.
Playing the altcoins game is meant to be done with an opportunistic mindset because the ground is yet too fragile to build solid positions.
Important Note: The information provided on this post has been prepared solely for informational purposes and should not be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any transaction or trading activity. The contents are based upon or derived from information generally believed to be reliable although no representation is made that it is accurate or complete and Obvious Capital accepts no liability with regard to the user’s reliance on it.
