Crypto Investor Report, July 30
Summary
Bitcoin keeps retracting day after day, exhibiting lower highs as times goes by. Enclosed in a small trading channel for the past seven days, namely between $9,350 and $10,200, the decline has been slow and steady, with bulls responding in volume once the $9,200 support line appears to be tested.
In a pivotal area, lately with reduced daily candle bodies, and volatility squeezing in, it will be determinant to see if bulls have the “firing-power” to manage to sustain the selling pressure and prevent us for looking further down. Also, with even lesser probability, it’s being hard to imagine the scenario where they’ll aim for a defensive bull run that prevents the continuous tear down of that supporting level, at least in these present technical conditions of price and volume.
Further, Bitcoin’s dominance seems to have been flattening out, despite its continuous decline. With the majority of the top altcoins finishing the week on the red — and managing to predominantly sustain the losses below the 5% threshold — some managed to exhibit some good performance figures. Pretty far away, still, from the long-awaited alt season that may never arrive again.
In the Spotlight
- Bitcoin’s “untouched supply” reaches an all-time high of 21.6%
- US Senate to hold a debate on blockchain regulatory frameworks
- Binance has announced an OTC service
- IRS says it’s sending warning letters to US cryptocurrency owners
- Germany will require a BaFin License from crypto businesses
- Iranian Gov’t authorizes cryptocurrency mining as industrial activity
Market Overview
Global market capitalization keeps declining over time. From $272 Bn on the last week to almost $263 Bn at the time this report is being written. Despite the steady drop, total capitalization is still hovering over the previous local low of 17th July of $248 Bn.
Regarding dominance, the curve for Bitcoin appears to have been flattening out, and now its value sits around 64.5%. Still, since last week the major altcoins have regained a slight portion of BTC share, but not yet enough to move the needle in their price performance, at least in a notorious manner.
Looking into the coins and tokens that have at least $1 Bn (or near) of market capitalization, the weekly performance shows a predominant red landscape, but with some coins showing good signs and managing to stay on the green.
The weekly highlight goes to Cardano (ADA), with a valuation of almost 9%, trading now over the 6 cents mark. Bitcoin Cash (BCH) followed Cardano’s direction and managed to gain 5% over the 7-day period, now aiming to surpass the $315 mark.
After the huge gains of the previous week, Bitcoin Cash SV (BSV) retracted over two digits in percentage, sitting now below the $150 level. A bad weekly performance also for Binance Coin (BNB) and TRON (TRX) with losses of 8.95% and 9.60%, respectively.
Looking into the top-20 rankings by market capitalization, no place-changing for the first nine assets. Cardano (ADA) with the weekly gains of 9% surpassed TRON (TRX) in the 10th place and Ethereum Classic (ETC) also overtook Tezox (XTZ), below in the table, to reach 17th place. Ontology (ONT) once again completes the top-20 ranking, but now with an extra $15 Mn of capitalization, when compared with last week’s rankings.
Bitcoin Market Analysis
Last crypto investor’s report we established and highlighted a bearish bias over the Bitcoin markets. And, during the course of this week, it has performed according to that bias.
The bearish move is currently being governed by the daily Oversold (OS) level, which is defined by the blue line in the chart below. We can immediately observe how often the price tends to bounce from OS levels, even after the sudden flash crashes that occasionally try to pierce that blue line.
Currently, the technicals are quite relaxed — and have been for a while — , and there’s some free air between the current price and the daily OS level, which sits at $8,700. Therefore, it’s not that ambitious that we set a clear price target for the upcoming days.
To invalidate that bearish target, Bitcoin will need to retake some significant levels, (e.g., daily EMA21) and start to build up a positive market structure.
Let’s analyse in detail, and focus on how the market states currently present themselves, to see how they validate our current hypothesis.
In the weekly chart, we distinguish a tough reaction to the loss of our long-trusted DMA3x3. Such a response usually signals a period that needs at least some good 4 weeks to recover, so that it can retest again the line from the below side. Obviously, the tougher the corrective trend, the longer it will take to reach there. Therefore, in this view, we might see Bitcoin testing the weekly green cloud, which provides a decent cushion to rest on, and that falls in the range between $6,500 and $9,000.
Looking into the daily chart, the picture is filled with plenty of bear candles and failed tests at the bottom of the bearish red cloud. On the other hand, there’s the possibility that we can hint for a double bottom meantime if the bulls are able to protect the lows. In that scenario, we might be talking on the next report’s issue about the possibility of a potential retake of the upper levels. But, for now, this scenario still needs some extra confirmation.
If we focus on the 4-hour chart, we can see that the key ingredient necessary to be able to draw a double bottom in the daily chart lies in the attempt to conquer some tough levels. Here, we salient the 4-hour bearish red cloud, the daily ema21 and the S.E.X.-200. Nevertheless, at first glimpses, the levels above look titanic.
What can us expect from these readings and past experience in the markets?
- The usual crazy $1,000 hourly candle that brings the price to new levels
- Or, a lot of grinding and high-frequency battles in the trenches, that are somehow able to lift the price above this massive 4-hour resistance.
While this recovery scenario requires lots of work, the corrective previous scenario that we pointed out earlier and that brings Bitcoin back to the $8,000 to $9,000k price range seems like the path of least resistance, and the path where a more conservative player would place their chips in.
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