Will we see an explosive year-end for Bitcoin and cryptocurrencies?

Bitcoin’s price has been on a spectacular uptrend for the past week. The crypto asset is up 32% over seven days and is trading around the €33,500 ($40,000) mark on 28 July. Buyers have clearly regained control, particularly following a sudden price movement on the night of 25 to 26 July, which we return to in detail later in this article.

Volatility is therefore back on the market, fuelled among other things by contrasting news: Amazon’s announcement and then denial of the possibility of payment in bitcoins, the opening of a judicial enquiry into Tether (USDT), etc. Volumes remain low, however. Additional momentum will be needed for the price to clearly rise above $40,000 and re-launch the uptrend a little more.

However, we are noticing the beginning of renewed interest, both from individual speculators and from professionals, with volumes and position openings starting to rise again. Finally, Bitcoin seems to be regaining its leading position in the market, with weekly performances higher than those of the main altcoins.

• According to CoinGecko, the market capitalization is up sharply, to 1550 billion, up from 1300 last week.

• Bitcoin’s dominance rises further, to 46.2% market share from 44.7% a fortnight ago.

• The best performance of the most capitalised crypto-currencies can be attributed to Axie Infinity (AXS) with +190% over a week.

• During the night of 25 to 26 July, the price of Bitcoin suddenly rose from $34,000 to $38,000. This movement is explained by the derivatives platforms that allow speculators to borrow money and use leverage to bet up (long) or down (short) on the price of Bitcoin. That night, the rising price led to margin calls by speculators who were betting on the downside. They were therefore forced to buy back their positions in a hurry and triggered a chain reaction: the short squeeze. Almost 1 billion dollars was lost on the side of those who speculated on the downside. This price movement allowed Bitcoin to break through the important resistance of $36,000.

• Another interesting observation is that the increase in the number of large addresses (those holding 1000 bitcoins or more) is confirmed. Since the beginning of July, the increase is slight but constant. Note that this number had been decreasing since February/March, which tends to show that large holders had previously taken profits and have stopped doing so since the end of May.

• The renewed interest is also present among institutional investors: Bitcoin futures on the Chicago Mercantile Exchange (CME) had their highest volume day in over a month on 26 July. Open interest, i.e. the total number of open positions, has also been rising since 20 July.

In a nutshell: optimism is back in the market. But be careful as long as the Bitcoin price does not clearly break above the $40,000/$42,000 resistance.

We invite you to discover our video analysis (in french and dated from July 27):

Bitcoin (BTC)

Coinhouse recommendation: 
Buy / Wait

• Bitcoin s’ad

Bitcoin is up an impressive 33% in one week to trade around €33,500 ($40,000) on July 28. The fact that the Bitcoin price has broken back above the €28,900 to €30,500 ($34,500 to $36,500) resistance is the first buy signal. Beware though, volatility is back, but with low volume. The €34,000 to €35,500 ($40,000 to $42,000) remains a resistance zone and it is better to wait than to take the risk of buying below resistance again. If the price makes a pullback to the €28,900 to €30,500 ($34,500 to $36,500) level, buying can be done, but we do not want to see the price go below $34,000 for a long period of time or the trend will deteriorate again. If the price ends a day above $42,000, this will be another positive signal and the price will probably head for the €40,000 ($47,000) area.

Ethereum (ETH)

L’avis Coinhouse : 
Buy on breakout

• Ethereum (ETH) also had a great week, gaining 28% to trade around €1,950 ($2,300) on July 28. The 1,530 and 1,610€ (1,800 and 1,900$) support was once again very well defended and allows a bullish recovery. This was a buy zone for long term investments. The Ether price must absolutely preserve this support or its trend will deteriorate significantly. To confirm a more sustainable uptrend, Ether needs to break above resistance between €1,860 and €,030 ($2,200 and $2,400). This would be a buy on breakout signal with a strong probability that the price will then move towards the $3,000 area.

Cardano (ADA)

L’avis Coinhouse : 
Wait / buy on breakout

• Cardano (ADA) is up 22% for the week to around €1.10 ($1.30). It is one of the assets that have weathered the market’s downtrend rather well. Let’s keep it simple: the Cardano price has been in a range between €0.85 and €1.27 ($1 and $1.50) since March. The $1 area has since been a very good area to accumulate on the buy side. When the price is in the middle of this range as it is now, we recommend waiting. A clear break of $1.50 will be a buy signal.

Tops & flops of the week (top 50 marketcap)

Tops

1- Axie Infinity: +197%
2- OKB : +80%
3- AMP : +72%

Flops

1- Leo Token (LEO) : -14%
2- Shiba Inu (SHIB) : +5%
3- Compound (COMP) : +11,3%

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