The Daily Cryptomenon
19th 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 19.08.2020
Bullishness and Bearishness, that’s how financial markets operate. One moment you might see the markets on the rise recording new yearly highs and the very next moment the bearish pressure can be overwhelming the markets and leading them all the way down. This is exactly where we spot our Cryptocurrency market this morning; sinking in its retreat after the Cryptocurrencies recorded new highs just one day earlier. With that said, let’s find out what today holds for the Cryptocurrencies on August 19th, 2020.
Our Cryptocurrency trio - Bitcoin, Ethereum, and Ripple, have reversed their gains. The rise higher was abrupt but it managed to break above some important barriers like the $12,000 for Bitcoin only to drop lower the very next day. Ethereum tested the resistance at $450 and failed once again, only this time it's fall was steep from the highs. Ripple on the other hand seemed to continue with its downward movement even reaching $0.2900 at one point.
Bitcoin (check out the chart below you’ll find that Bitcoin is the purple line) fell from the lofty levels it had touched and retraced all the gains it got yesterday to record a performance of 28.51% on a month-to-month basis*. Ethereum (red line) couldn’t handle the pressure of keeping things that high for that long; its levels had to drop. However, it did keep a decent performance of 75.37% on a month-to-month basis. Ripple (orange line) followed the steps of its older cousins and continued to move lower, breaking below the 50% performance to record 47.35% on a month-to-month basis.
What’s the strategy you’re going to use when it comes to these cryptos? Do you believe that the Bears will finally control this market? Or do you believe that the Bulls will manage to move back up after a short while? Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin Moves Back Below $12,000
Bitcoin is currently struggling to find a decent higher support within the $11,000’s range after the rejection of the August new high around $12,492. The move lower was exacerbated further when the BTC Bulls failed to hold the support at $12,200. It was like adding fuel to a small fire that kept on consuming the entire market. The next support target at $12,000 failed to rise to the occasion as well, instead, it allowed the largest Cryptocurrency to extend the bearish leg to $11,700 as of this writing.
Currently, the Bulls are having a hard time building any kind of meaningful support, especially after the $11,800 has been broken. They’re hoping this support would lead to gains that would propel BTC back above $12,000. The 100 Simple Moving Average (SMA) in the 4-hour range is holding Bitcoin in place for the time being. Even though there’s a short move below that trendline, holding that line is going to be of utmost importance for the Bulls.
Bitcoin’s fate has two possible scenarios according to the prevailing technical levels. First, if the Bulls manage to keep the support in check, gains above $12,000 would encourage more buying entries, in turn, pushing above the seller congestion at $12,000. There’ll be increased confidence in the recovery and that would pull Bitcoin closer to $12,500.
The second scenario is that an increase in the selling pressure could result in a drop below the short term support at $11,700. If this happens, Bitcoin would spiral to seek lower support, probably at $11,750. The losses could extend to refresh the levels at $11,500 and $11,250.
Double Top Declines Ethereum
Ethereum’s price remarkably rose to new yearly highs on Monday as it closed near the critical level at $450. However, that was short-lived as ETH came face to face with a reversal that led the crypto asset lower. Meanwhile, ETH is trading at $409 after failing to hold the support at $415. The recovery above $420 seems not strong enough and it’s apparent that the Bulls will continue to struggle with building gains towards $430.
Technically, the trend is turning bearish. The RSI, for instance, is almost crossing under the overbought line. If the negative gradient continues, it wouldn’t be easy to keep Ether above $400 let alone $420. In other words, the path of least resistance remains downwards.
Looking at the daily chart, we can find something interesting. The wide gap made by the 50-day SMA above the 200-day SMA illustrates that the buying pressure is still present. This isn’t enough to pull Ether to higher levels past $430, though. If the short term support at $400 is held in place, we can expect the Bulls to build on it for action to higher levels in the near term.
Ripple Retraces Its Bullish Run
Ripple had reclaimed the ground above $0.30 on Monday this week. The impressive price action even tested the resistance XRP had hit in the first week of August at $0.3250. Moreover, the move renewed the hope of seeing Ripple trade not only above $0.35, but also closer to $0.40.
However, the resistance at $0.3250 led to the formation of a double-top pattern. The impact of the pattern seems to have ignited a selloff with XRP sharply diving to levels below $0.30. The third-largest crypto asset has lost over 4% of its value in less than an hour. In addition, losses have extended under the moving averages. The 50 SMA and the 100 SMA are likely to function as resistance levels in case of a reversal eying gains above $0.30.
Looking at the RSI, XRP is likely to hold above $0.29 in the near term because the indicator appears to have slowed down the momentum. Consolidation is expected above this same level and will give ample time to plan for yet another attack on $0.30 and $0.3250 resistances respectively.
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