The Daily Cryptomenon
21st August 2020
Your daily Cryptocurrency Market Analysis News brought to you by the CryptoAltum Cryptomenon Team.
This analysis was written at 9:00 am GMT +3, on 21.08.2020
Volatility seems to have died down in the cryptocurrency market. What started out with positive momentum in these markets, something that led to new yearly highs, quickly turned into negative momentum as the same markets struggled to stay within the ranges they were used to. All of this increased the sense of volatility in the markets, however, it seems that this volatility has died down as cryptoassets turn sideways for the time being. With that said, let’s find out what today holds for the Cryptocurrencies on August 21st, 2020.
Cryptocurrency Recap
Our Cryptocurrency trio - Bitcoin, Ethereum, and Ripple, have entered into some kind of sideways movement after the volatility moved higher and then lower. It was quite expected as both Bulls and Bears took a step back to strategize. Bitcoin continues to trade below $12,000. However, it managed to jump off of $11,500 late yesterday. Ethereum manages to establish a solid support around $400 as the asset currently trades above it. Ripple establishes $0.2800 at the current support but faces strong resistance at $0.2970.
Bitcoin (check out the chart below you’ll find that Bitcoin is the purple line) keeps things as steady as possible recording a performance of 29.29% on a month-to-month basis*. Ethereum (red line) manages to increase its performance after the fall below 70% as it records 75.08% on a month-to-month basis. Ripple (orange line) continues to struggle to rise above the 50% performance as it currently records 49.26% on a month-to-month basis.
*Please note that we mention month/on/month we mean the same day, one month ago. For example, 29th of July till the 29th of August.
What’s the strategy you’re going to use when it comes to these cryptos? Do you believe that volatility will rise back up and move the market? Or do you believe that consolidation and sideways movement will take over? Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin Attempts Another Move to $12,000
Currently, the Bulls of Bitcoin are attempting another move higher, however, they’re met with an important resistance at the $12,000. Luckily they’re above $11,800, which should give enough support for that attempt. This move comes after the Bulls have managed to break above $11,600 giving the Bulls the needed momentum.
At the moment, Bitcoin is trading around $11,865 as buyers work hard to ensure that the momentum towards $12,000 isn’t lost. However, the move back above $12,000 is nothing short of challenging and quite the uphill battle, especially after BTC jumped from $11,600.
The current and most important resistance is found at $12,000. Breaking above this level would be the validation that BTC needs to continue moving higher, but it’s an uphill battle. It’s really important to remember the immense presence of sellers at that level as well, and this makes the chances look not so easy for the Bulls. On the downside, the 50 and 100 SMAs (Simple Moving Averages) on the 4-hour chart, provide immediate support for Bitcoin, something that the Bulls will likely capitalize on. However, at the end of the day, pure horizontal movement is expected, especially when we look at the RSI (Relative Strength Index) since the indicator prints directly at the 50-level indicating neither bullish nor bearish momentum for the time being.
Ethereum Bounces Back, A Bit
Ethereum manages to bounce back just a little bit after it fell below the $400 support zone yesterday. The Bulls of the market saw this as a no brainer and rushed to assist the important $400 zone from breaking. This resulted in enough momentum to move Ether back above the 100 SMA but not enough to break above the 50 SMA which has been acting as a resistance level for ETH.
With how things are moving, Bulls need to break above the 50 SMA and $420 in extension if they want the movement higher to continue. However, remember that sellers are everywhere and are trying their best to keep prices from rising too much. If the Bulls want any chance of seeing the $450 again, then the resistance at $420 needs to be broken.
Looking at the RSI, we see that the indicator is printing close to the 50 mark, indicating that the most likely movement, for the time being, is sideways. It also translates perfectly into the $420 idea, since the movement of the RSI and the price action of ETH fall perfectly with each other indicating that $420 is the level to beat if Bulls want to retest the elusive $450.
Ripple Remains Controlled by Bears
Following two consecutive bearish days, the Bulls have managed to finally reenter the market and drive Ripple higher. However, with the presence of the 50 and 100 SMAs converging at $0.2970, it’s proving to be quite the challenge for Bulls. This mentioned level has become the focal point of the Bulls’ attack plan. A break above that level is absolutely needed if they want to retest the $0.3275.
Volatility seems to be decreasing around this instrument, as the Bollinger Bands are performing a squeeze, meaning that volatility is decreasing. Whenever this happens, more sideways movement is expected to go forward. At current levels, Ripple faces immediate resistance at $0.2970 (as mentioned), followed by two equally if not stronger resistances at $0.3000 and $0.3100. On the downside, only one healthy support can be spotted which is around $0.2800, breaking below that would take the wind out of the sails of the Bulls and lead Ripple even lower.
Just like Bitcoin and Ethereum, Ripple’s RSI is also printing around the 50-level indicating that a horizontal and sideways movement can be expected from this instrument. This works perfectly with the volatility theory as the squeeze formed by the Bollinger Bands on Ripple validates what the RSI is saying and how the price action is going to behave.
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