The Daily Cryptomenon
12th 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 12.08.2020
The consolidation theory has essentially been broken into a million pieces. Have you been keeping up with the markets? Just in case you haven’t, we’ll sum up the situation for you; the Bears are fed up with everything the Bulls have been doing so they staged a comeback strong enough to rattle all the cryptocurrency markets. With that said, let’s find out what today holds for the cryptocurrencies on August 12th, 2020.
Cryptocurrency Recap
Our cryptocurrency trio - Bitcoin, Ethereum, and Ripple, felt the power of the “Bad News Bears” and simply succumbed to the relentless attack which led them to retreat back below certain supports. It seems that the Bulls didn’t have the power nor the momentum to keep going, something that incentivized the Bears to wrestle control of the markets out from the Bulls’ grasp and lead the markets downwards.
Bitcoin (check out the chart below you’ll find that Bitcoin is the purple line) lost some of the gains it has garnered but still manages to prints 21.97% on a month-to-month basis*. Ethereum (red line), experiences the same downward pressure but remains in the positive with a performance of 55.66% on a month-to-month basis. Ripple (orange line) is clearly taking the brunt of the Bear attack. It remains positive, though, with 38.11% 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 Bears have finally been able to gain control over the markets? Or do you believe the Bulls gave them a freebie and are waiting for the best time to strike back? Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin Breaks Support
We’ve explained in previous reports how the cryptocurrency king has attempted to continue its move higher thanks to the momentum of the Bulls, but with the presence of the $12,135 resistance level, that momentum quickly dried up. The Bears have taken over this cryptocurrency, especially after BTC has broken below the 50 SMA (Simple Moving Average), a line that acts as an important support for the digital asset.
Breaking below that moving average emboldened the Bears to continue on the offensive as Bitcoin continued moving lower and effectively breaking through the $11,500 support level as well. Currently, Bitcoin is trading near the 100 SMA which is acting as a secondary support after the 50 SMA failed to keep things afloat. Should that line break as well, nothing then would stop the Bears from continuing with the move all the way to $10,700.
The RSI (Relative Strength Index) is also supporting the theory of a continued move lower as the indicator prints below the 40-level and is very close to oversold territory. This showcases the idea of Bears in control of the market as the probability of a continued move lower is quite high. Furthermore, the momentum lower is gaining power, as traditional analysis of the RSI tells us when the line breaks below the 50 and 40-levels; one can expect more downside.
Ethereum Remains in Range
It’s not a big surprise to see Ethereum fall the way it did. The cryptocurrency has been trying to break above the $400 for quite some time now and has barely managed to make a dent above that resistance. Ever since it hit the $415 high on the 2nd of August, the cryptocurrency seems to have let go of all its momentum and couldn’t continue to move higher. The presence of sellers at that key level didn’t help of course and that has led to a move lower.
However, if one was to examine the graph a bit closely, one would find that even though the cryptocurrency has in fact fallen, it’s still within the familiar range between $400 and $360. Breaking below the 50 SMA is something that needs to be taken into consideration, especially now that Ether is looking at the 100 SMA as the new support line, which coincides with the $360. As long as ETH manages to remain above the $360 and the 100 SMA, the Bears wouldn’t take full control of this market.
The RSI is deep within oversold territory as the indicator prints close to the 30-level indicating that the Bearish momentum is actually strong, so a continuation below the mentioned supports isn’t entirely out of question. The indicator is telling us that we can expect more downward movement, so the question that’s on everyone’s mind is whether or not the $360 and 100 SMA will be able to withstand the assault of Bears on the lower levels. If these levels break, there would be meaningful levels all the way down to $320 and $300 by extension.
Ripple Enters Downward Channel
It’s been quite the ride for Ripple as it has managed to rise all the way from $0.1700 to $0.3275, a move that was very explosive and has attracted a lot of market participants that wanted to benefit from the upward momentum that the instrument found itself in. However, soon after hitting $0.3275, XRP simply fell off a cliff all the way towards the $0.2400 but managed to resume the movement higher, effectively entering into a consolidation.
However, upon closer inspection, this consolidation isn’t a real consolidation. In fact, it’s a downward trending channel, as can be seen from the light blue lines drawn on the graph below. With the digital asset experiencing lower highs and lower lows, at the same time confined within two downward trendlines, it would be safe to assume that the Bears are in control of this market for the meantime. If Ripple is able to break above the upper bound of the channel, we won’t believe that the Bulls will be able to do much, Ripple would need to break above $0.3100 in order for the bullish momentum to return.
Currently, XRP is trading near the 100 SMA and the current support of $0.2700. It also lacks any meaningful support anywhere near, so a break below these levels would increase the pressure from Bears that could lead the instrument to head towards the $0.2400, which is the current support that Bulls are waiting to defend. It would seem that the trend is downwards for the meantime unless Bulls can gather themselves and attempt to move above the $0.3100, but that’s a long shot.
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