Technical analysis

Cryptocurrencies ready to ride a historic bull market?

Julien Moretto – 29 Jul 2020

Finally! Volatility is back on the biggest capitalizations of the cryptocurrency market! Since last Thursday, Bitcoin is up 18%, reaching the €9400 ($11,000) level. Ethereum is even more impressive, with +30% in a few days, to reach the €275 ($320) level. The volumes observed in recent weeks on the “small caps”, and particularly those linked to decentralised finance (DeFi), now seem to be shifting to the largest market values.

Profit-taking on stocks linked to DeFi is real, with for example Compound down 16% and Aave down 9% over the week. But we will see that assets such as Chainlink are already at interesting levels of buybacks. One question is now on everyone’s lips: is this the start of the long-awaited long-term bull market? We will see in this article that significant technical resistances remain to be overcome on Bitcoin but that this bullish exit after a stabilization of more than two months is very positive. European investors will also remain cautious due to the volatility that is also raging in the Euro/Dollar pair, as the value of the dollar has been particularly weak in recent weeks.

  • According to CoinGecko, market capitalization is exploding, at $330 billion, up from $281 billion last week. That’s impressive.
  • Bitcoin’s dominance is up to nearly 64%, compared to 61.5% last week. The Altcoins are losing ground
  • The best performance of the top 50 is to be attributed to Elrond (ERD) with +64% over the week.

We invite you to discover our video analysis (in french and dated from July 28):

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Bitcoin (BTC)

Coinhouse recommendation : 
Partial profit-taking

  • We were expecting a return of volatility. It started on Thursday, July 23. Our first buy signal was the price level of 8300€ (9430$). Since then, the price has appreciated by almost 20%. A very positive sign for the market’s medium to long term rise, the 9200€ ($10,000) zone has finally been clearly broken. For the following price benchmarks, we will base ourselves solely on the dollar, as the euro/dollar pair has evolved a lot in recent weeks and the euro price zones are less relevant.
  • As it is often the case with Bitcoin, price increases are violent. We have already reached our resistance zone identified several weeks ago, between $11,000 and $12,300. This zone has been largely worked on in the summer of 2019. The most cautious profiles will take partial profits (for example 25 or 33% of the position depending on the profile) in order to let the market breathe. A return of the price on the former resistance zone at 10300/10400$ will be a strategic zone for buybacks/reinforcements in case of a signal. The continuation of the rise will certainly bring the price to the $12,000 zone, a previous market peak dating from August 2019. The $10,000 level must now be preserved to maintain bullish sentiment.

Ethereum (ETH)

Coinhouse recommendation : 
Partial profit-taking

  • Very nice performance for Ethereum (ETH) since Thursday, July 23 with +30%! We had said that the break of the 220€ (250$) resistance would be a strong buying signal. We are not disappointed, the resistance zone of 260€ (275$) was literally crossed. Ethereum’s price is therefore already in its resistance zone between $320 and $360, a major market peak tested in the summer of 2019. Prudent profiles will take partial profits in the current zone.
  • There is a good possibility of buyback/reinforcement if the ETH price pulls back between $275 and $290, the zone that corresponds to the previous market peak of February 2020. After that, if the market continues its major upward movement, the price is expected to rise much higher, to levels between $380 and $420 before reaching serious resistance. Of course, one has to stay above $250 to keep the bullish sentiment alive.

Chainlink (LINK)

Coinhouse recommendation : 
Buy

  • Trend following on Chainlink (LINK), down slightly by 1.5% this week to €6.12 ($7.20). After the 100% rise that followed the bullish breakout of the annual range at $4.60, it was a healthy correction.
  • Patience and monitoring of Fibonacci retracement levels always pays off. Chainlink’s price returned between €5.30 and €5.80 ($6.05 and $6.60) on July 27 and showed some buy signals. The area is therefore favourable for buy/strengthen and play a new bullish leg on this asset, with a minimum return to the previous high around $8.

Top & flops of the week (top 50 marketcap)


Tops

1- Elrond (ERD) : +64%
2- Ethereum (ETH) : +31%
3- Bitcoin Cash (BCH) : +26,3%


Flops

1- Ampleforth (AMPL) : -50%
2- Compound (COMP): -15%
3- Augur (REP) : -12,6%

Investors’ attention is drawn to the fact that the content of the articles does not constitute investment advice.
Investment in cryptocurrencies carries a risk of total capital loss.
For more information, please do not hesitate to contact our support department.

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