The Daily Cryptomenon
11th 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 11.08.2020
If we’re to talk about the cryptocurrencies in general, we’ll find they’ve absolutely entered into consolidation mode. This can be clearly seen if one looks at the graphs since the record move higher. These crypto assets have been moving in ranges while testing both the upper and lower bound of those ranges, without breaking either. This indicates two things; the lack of momentum and the presence of both sellers and buyers. With that said, let’s find out what today holds for cryptocurrencies on August 11th, 2020.
Our cryptocurrency trio - Bitcoin, Ethereum, and Ripple, have entered into a proper consolidation mode. As expressed, this can be clearly seen if one was to examine the graphs and notice that ever since the spike at the beginning of August 2020, they’ve decided to cool things down a bit and consolidate. Their movement has been caught in between their respective ranges showing some bias upwards or downwards. However, as the matter remains, consolidation is the name of the game.
Bitcoin (check out the chart below you’ll find that Bitcoin is the purple line) consolidated its gains around 27.58% on a month-to-month basis*. Ethereum (red line), experiences the same consolidation with a performance of 63.91% on a month-to-month basis. Ripple (orange line) is the odd duck out. While it’s been consolidating, the bias is clearly downwards as it records a performance of 48.35% 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 this consolidation will remain for an extended period of time? Or do you believe the Bulls and Bears are waiting for the perfect time to strike? Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin Moves Sideways
The cryptocurrency king attempted to break above the $12,000 resistance yesterday, however, the presence of sellers at that level forced BTC right back down as it tested the $11,500 support, managing to slightly break below it. It seems that the $11,500 support level along with the 50 SMA (Simple Moving Average) are levels of high importance for the Bulls for them to keep stepping in to defend them.
Furthermore, the presence of sellers at the top levels around the $12,000 and the $12,300 by extension is showcasing the power of the Bears and their tenacity for not allowing anymore upside movement for Bitcoin. The back and forth movement between these levels is strengthening the idea of consolidation between $12,135 and $11,500, as Bitcoin has been trading between these two levels ever since the 2nd of August 2020.
However, while yes, BTC has been trading in consolidation, the price trajectory is clearly higher. The bias is clearly for the Bulls to continue to move higher. This is evident in the movement of the RSI (Relative Strength Index). While it hasn’t managed to break above the 70-level and enter the overbought territory which helps catapult the cryptocurrency higher, it’s been printing above the 50-level ever since 2nd August 2020. This shows the power of the Bulls in keeping the momentum alive, but just barely, a new break above a crucial resistance is needed in order for the momentum to be reestablished.
Ethereum’s Sideways Movement
If Bitcoin’s movement was a sideways one with bullish bias, then Ethereum’s sideways movement is purely sideways. There’s no apparent bias either to the upside or downside. Neither the price action nor RSI (Relative Strength Index) is showing any type of preferred side as things remain contained in familiar ranges.
Ether’s been fiddling with the $400 resistance level for quite some time now, as it has failed to gain the needed momentum to break above as sellers keep stepping in to prevent that from happening. What’s even more frustrating is the fact that the 50 SMA is creating a strong support for the instrument. This means that movements have been uber tight for the time being, with literally nowhere to go but sideways.
Speaking of the RSI, when we examine its movement along the way the price action is moving, we see symmetry which is good. This indicates they’re both on the same page and will continue to be like this for the foreseeable future. The indicator also captures the consolidation quite well as it prints just above the 50-level and below the 60, indicating that there’s neither bullish nor bearish momentum present at the moment.
Ripple Drops and Fights Back
While Bitcoin and Ethereum do dominate the market in terms of coverage and news, Ripple also has its share in the spotlight, especially now. The cryptocurrency was facing severe downward pressure, as it dropped from the important resistance at $0.3275 all the way to the support around $0.2830. This move effectively broke through the 50 SMA which has been acting as a support as well as through the Wedge formation that we’ve talked about previously.
However, XRP has been able to fight back as Bulls entered the market at that crucial support ($0.2830) and managed to push the cryptocurrency back higher and above the 50 SMA. This is a clear sign that the Bulls haven’t given up easily and are still willing to push higher despite the heavy presence of Bears at the upper levels. Currently, the instrument is facing a challenge of breaking above the $0.3100 resistance, and should the Bulls succeed in doing so, the movement higher is sure to be underway.
The RSI is telling us a similar story, where the Bulls were able to bear the Bears and prevent them from establishing a continued reversal. Make no mistake, the Bears were in fact holding all the cards against Ripple as the cryptocurrency was supposed to continue moving lower. However, the Bulls were able to defend the $0.2830 support level which was translated by the bounce from the 40 level on the RSI. This bounce indicates that the Bearish momentum that’s supposed to be established on XRP has died down.
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