The Daily Cryptomenon
7th 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 07.08.2020
It seems that the cryptocurrency market is currently a fashionista-wannabe. Just like fashionistas who take 40 minutes to choose what to wear then change their minds 30 seconds later, markets have no idea where to go as one moment we see them rising, the other consolidating changing their mind, with no rhythm or reason. With that said, let’s find out what today holds for cryptocurrencies on August 7th, 2020.
Our cryptocurrency trio - Bitcoin, Ethereum, and Ripple, seem to have entered into consolidation once again, as barely any movement was registered during the overnight period and that brings up the point of momentum. Where did all the momentum they carried vanish? Did the sellers have such an impact on them, or did the Bulls simply not utilize it out of fear of retribution? It isn’t quite clear yet, but what’s crystal clear, is the fact that we’re back to talking about consolidation.
Bitcoin (check out the chart below you’ll find that Bitcoin is the purple line) has entered consolidation once again as it moves sideways with a performance of 27.11% on a month-to-month basis*. Ethereum (red line), has followed the same fate of Bitcoin as it moves sideways with a performance of 65.26% on a month-to-month basis. Ripple (orange line) also seems to be consolidating recording a performance of 62.37% 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 the Bulls have finally run out of steam? Or do you believe the Bears aren’t strong enough to stage a comeback? Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin Remains Bullish, For Now
Bitcoin Bulls remain in control of the market for the second day straight, as the price has managed to stay on track, moving higher from $11,755.34 to $11,807.68. This marks the breaking of the resistance level at $11,800 and provides the Bulls with enough ammunition to continue higher. However, with the presence of many sellers from here all the way until $12,000, it’s going to be an uphill battle for Bulls to reach their next target.
Technically speaking, the downside then isn’t all that worrying with the presence of three healthy support levels at $11,500, $10,900 and $10,700. The $11,500-level has the Previous Month high, Previous Week high and 4-hour Bollinger Band middle curve. The $10,900 level has the one-day Pivot Point support-two and one-month Fibonacci 23.6% retracement level. While the $10,700 support level has the 4-hour SMA 100 and daily Pivot Point 1 support-three. All of them giving enough support in case the Bears decide they’ve had enough.
Looking at the RSI (Relative Strength Index), we can notice that the bullish bias is still intact even though there’s some sideways movement around the 60-level. Analysis of this indicator usually tells us that when we see such a movement, it’s usually followed by some choppy movement higher on the price action. This leads us to believe that there might be a chance for Bitcoin to reach $12,000 but it’s going to take some work and a bit of time to get there.
Ethereum Falls Short at $400
For the first time in 2020, Ethereum made it above $400, beating the 2019 high around $361, a couple of days ago and it continued to move higher. It even managed to form a new yearly high at $415.86, however, that move marked the end of the Bull-run that we witnessed. From that point, and due to high volatility witnessed at the beginning of August, a reversal took place sending Ether back to the support at $320.
Increasing attempts to break above the $400 has yielded nothing as the increased seller presence at that level is making the Bulls quake in their boots out of fear of a reversal that could send the cryptocurrency back towards its previous starting point. Currently, ETH is stuck in a range between the yearly high of $415, and the support at $380, with $400 acting as the line of the skirmish between the Bulls and Bears.
The RSI (Relative Strength Index) doesn’t seem to believe that Ether has the potential to move back above $400 as it has continued its sideways movement, going as far as to break below the 60-level as it targets the 50-level. This move coincides with the increased selling pressure at $400 and indicates the potential for a reversal that could lead the cryptocurrency towards $360.
Ripple Stuck in a Wedge
Last time, our CryptoAltum Market Analysis Team noticed how Ripple has been trading sideways after the reversal that happened not too long ago. In addition to that, the cryptocurrency has formed a wedge pattern. When such a pattern forms, it’s usually a continuation theme meaning that there’s a chance of more upside movement for this cryptocurrency.
XRP has managed to stay above $0.3000 after it had a hard time breaking above it a couple of days ago. Now, it moves above it with the lower bound of the mentioned wedge very close to it. This gives strength to the fact that there might be enough investors waiting to hold the line at $0.3000 to stop any further moves lower.
The RSI (Relative Strength Index) is showing the same sideways movement of the other two cryptocurrencies we’d mentioned (BTC and ETH). This movement tells us that the consolidation is in full swing with no upward or downward bias since the indicator is printing right around the 50-level and emphasizing pure consolidation without any bias.
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