Crypto Investor Report, July 16
Summary
At this day, 50 years ago, Apollo 11 launched from the Kennedy Space Center in Florida. Four days later, it landed on the moon. Unfortunately, crypto markets haven’t successfully reached there also, yet. And last week was a turbulent episode in the pronounced moon flight that crypto-maximalists truly endeavour and expect to happen in the near future.
Solid resistance in the $13,000 level woke up the recently hibernated bears, and prices plummeted back, in a consistent fashion, to the psychological $10,000 support level. Market conditions deteriorated, and that damage can even lead to a further plunging of prices, in case of that support fails to resist the imminent selling pressure.
Further, Bitcoin’s dominance is still on the rise, and with markets on the red, it means that the scenario isn’t favourable for other coins or tokens in the digital assets ecosystem. Last week losses were large, and a negative panorama is widely spread all over the place.
Market Overview
Overall, market capitalization took a magnanimous deep dive. From a local high of $356 Bn on July 10th, down to a local low of $273 Bn reached yesterday. As we write this report, a quick relief rally makes its value to orbit around the $275–280 Bn levels.
Regarding dominance, the highlight goes again for Bitcoin, that continues to steadily grab a further share of the market. A 2.5% weekly increase, that places around values only seen at and right before April of 2017.
Looking into the coins and tokens that have at least $1 Bn (or near) of market capitalization, the scenario isn’t good looking for them. With Bitcoin leading the market to a double-digit loss, the majority of all other altcoins even performed worse than that, with some assets reaching almost a one-third depreciation.
The weekly ranking by market capitalization stands as follows. The highlight goes to Stellar (XLM), surpassing TRON (TRX) and Cardano (ADA) in the list.
Bitcoin Market Analysis
Like stated in the summary section, the crypto markets have suffered some technical damage along the last days. That definitely opens up the door to some corrective scenarios or, at least, increases the odds of them being more probable.
Let’s take a closer look at the Bitcoin charts (weekly, daily and four-hours) to pinpoint where that damage is currently located.
When we focus on the Weekly chart, we can state that the corrective price action has found support in a confluence area between the key 38.2 Fibonacci level and the Displaced (by 3) Simple Moving Average of last three weeks (DMA3x3), typically our exit proxy for higher time frames.
That allows us to try to frame some upcoming potential scenarios:
- Weekly Bull Case. The most recent weekly bull trend will remain intact, meaning that the $9,750 level holds, and price action is able to retake the DMA3x3 line, going along it within the next two to four weeks.
- Weekly Neutral Case. If the $9,750 level is meant to be broken, there are some solid support zones along the way down, that could allow for some consolidation and pause before we start the next leg up.
- Weekly Bearish Case. If the $9,750 level doesn’t hold and selling pressure increases (typically if investors start to panic out), then that opens the door for other scenarios. The best exploration zone would lie down in the $5,000-$7,000 range and the timing to resume the bullish trend might take longer than expected, if Bitcoin really dives into this territory.
Now, if we look closely at the Daily chart, we can glimpse already some first signals of technical damage:
- Price is drawing an M-shaped top pattern
- Price it’s detaching itself from the daily EMA-21 for the first time since January of 2019
- And it’s not bouncing from the daily oversold line, but rather flirting with it on the way down
If we zoom even further, focusing on the 4-hour chart, we see that we’ve lost even further structures. The highlight goes for the fact that, for the first time since six months ago, we are below the S.E.X.-200 cloud.
Looking Forward
All these pieces of information, all tied together, somehow weakens the Weekly Bull Case that we mentioned above and increases the chances of the Neutral or Bearish scenarios.
Looking South appears to be the name of the game for the upcoming weeks, on this broad perspective. But, on a closer time scale, this downturn usually takes some time to confirm and, in the upcoming days, the range to watch is between the $10k and $11.5k levels. Bitcoin could well bounce back and forth for quite some time between these levels until deciding its next direction, realizing one of the aforementioned scenarios.
In that period, the remaining coins will also retain from us a broad piece of attention. If that rangy market is established and is here to stay, the attractiveness of some of the prices of some altcoins might start to be too much appealing for some investors to ignore, raising potentially increasing scenarios, hard do achieve in the major market while it remains moving laterally.
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.
