Technichal analysis

Big move coming soon for cryptos

Julien Moretto – 31 Jul 2019

Little action this week on the cryptocurrency market. Bitcoin is stable with +0.64% over the last seven days, trading around $9,700 (€8,700) on July 31. Despite the resistance at $11,000 hit on July 20, which has triggered a downtrend, Coinhouse remains bullish as long as the $9000/9100 support holds.

Data from CoinMarketCap shows a stable market capitalisation around $269 billion. We notice two important facts this week:

  • The entire market remains correlated to Bitcoin and we are not witnessing an “altcoin season”.
  • Volatility and volumes are down sharply, with an average daily trading volume of $13 billion over the past few days on Bitcoin. This reflects a consolidation/compression phase and suggests that a strong market movement will occur sooner rather than later.

The Bitcoin dominance is still high at 64.6% of the market capitalisation. Only Tezos (XTZ) stands out in the top 50 this week with an increase of nearly 20% following its listing on a new exchange. All this in a week highlighted by announcements from the IRS (American tax authorities), which are cracking down on tax declarations related to cryptocurrencies, and from China, which would consider to create its own cryptocurrency.

We invite you to discover our complete analysis in video (in french):

Bitcoin

Bitcoin chart

Coinhouse recommendation: 
Wait

Volatility has declined significantly since July 20. The support at $9,000 / $9,100 (€8,000 / €8,100) that was our buy zone on July 17 still hold. Moving above $11,000 would amplify the bullish sentiment. So Coinhouse maintains a bullish scenario on Bitcoin unless the price clearly closes under this support.

We are in a compression/consolidation phase that will result in a strong price movement. If we drop, our second buy zone is the one located between $8,200 and $8,600, corresponding to the gap in the CME Futures Bitcoin contract, which has not been closed since mid-June.

Ethereum (ETH)

Ethereum chart

Coinhouse recommendation: 
Wait

Ethereum is still correlated to Bitcoin and timidly gains 1.68% against the dollar in seven days, at $213 (€191). The bounce on July 17 was pretty weak and did not exceed $236. It is possible that the correction is not over yet, especially if Bitcoin drops too . Coinhouse considers that the interesting buy zone for swing is located between $160 and $180 (€145 and 160€), an area that matches Fibonacci extension levels and volumes.

A bullish break above $236 would already confirm a new medium or long-term increase on Ethereum. As long as Ethereum trades between $180 and $236, it is better to wait for the market to give more clues about its next significant direction.

Litecoin (LTC)

Litecoin chart

Coinhouse recommendation: 
Buy

Litecoin is also stable with +1.88%, trading at $93 (€83) on July 31. However, the situation is different on Litecoin because it has fallen further and is already in a buy zone that we consider interesting: the level of $80 to $88 (€68 to €75). It coincides with Fibonacci extensions and a pivot chartist level that already acted both as support and resistance.

But the last resistance of $106 have to be break to confirm a longer-term increase. This scenario is invalidated if the price clearly falls below the July 17 low of $78.

Top & flops of the week (top 50 marketcap)

Tops

1- Tezos (XTZ) : +19,53%
2- Bitcoin Cash (BCH) : +12,99%
3- NANO : +11,18%

Flops

1- Bitcoin Gold (BTG) : -14,89%
2- Holo (HOT) : -12,76%
3- Lisk (LSK): -11,83%

Hot crypto news

The American tax authorities (IRS) expect to receive their due in terms of cryptoassets. A letter has been sent to 10,000 American taxpayers “inviting” them to declare their assets and any financial transactions relative to crypto. This voluntary approach is the step that may precedes a tax audit. The time for discretion and non-declaration is officially over in the United States, a good opportunity to remind that a blockchain, by definition, preserves the entire history of transactions carried out, so it is the worst possible tool for tax evasion or fraudulent use of money.

The scenario of a sovereign cryptocurrency in China is more and more credible. After the PBOC (Central Bank) announced the recruitment of Blockchain experts in May, the Bank Of China, the 5th largest bank in the world published an infographic educating on cryptoassets by taking the example of Bitcoin. Also from China, industrial giant Huawei underlined the opportunity for China to compete with the Libra project by creating a sovereign currency based on a blockchain. China is definitely one of the most proactive territories when it comes to digital assets.

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

Crypto prices

Name Price
bitcoin
Bitcoin (BTC)
€9,137.47
ethereum
Ethereum (ETH)
€172.41
litecoin
Litecoin (LTC)
€66.78
ripple
XRP (XRP)
€0.245
maker
Maker (MKR)
€452.36

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