Insights > Technical analysis > Bitcoin flat, a summer in favour of DeFi cryptos?

Bitcoin flat, a summer in favour of DeFi cryptos?

7 July 2021

temps de lecture 5 minutes

avatar-auteurJulien Moretto

Bitcoin’s price is not picking up any particular strength at the beginning of the summer. On the contrary, volatility is at its lowest point in the year 2021. The king of cryptocurrencies is near-stable on a week, down slightly by 2.9% and trading around €29,000 ($35,000) this July 7. The long-term trend is still bullish as long as the support around $30,000 holds on Bitcoin. We are also witnessing a revival of cryptoassets related to decentralized finance (DeFi) such as Aave, Uniswap or even Compound which is gaining 52% in seven days. Here are the statistics to remember this week:

  • According to CoinGecko, the market capitalization continues to rise to 1520 billion, up from 1460 last week.

  • Bitcoin’s dominance drops further, to 42.9% market share from 44.6% last week.

  • The best performance of the top 50 is attributed to Compound (COMP) with +52% over one week.

  • As a result of the Chinese government’s restrictions, many mining farms have pulled the plug and continued their operations in other countries. This temporarily reduces the computing power available to the Bitcoin network. But in these cases, the Bitcoin protocol automatically adjusts the difficulty of mining so that the activity remains interesting for the miners still in place. Last Saturday, the mining difficulty has already seen an adjustment of -27.94%: a historic drop. The next difficulty adjustment estimate, which is due in about ten days’ time, will be just as large a drop. With the price of Bitcoin remaining stable, operations are becoming more and more profitable for miners. Nevertheless, it is true that we are seeing a sharp drop in computing power (hashrate). We will be watching to see if we see a rebound in this data during July.
  • Bitcoin transfers to exchange platforms have reached the lowest level of 2021 in recent days with only 12,000 bitcoins sent, compared to, for example, 168,000 during the May 19 drop. A statistic that may show that the main players on the market are not panicking and do not intend to sell. A low number of bitcoins on the exchanges avoid, in theory, strong downtrend movements. A positive statistic for Bitcoin then, but one to watch regularly.
  • On the miners’ side, it’s the same thing. The flow of bitcoins out of miners’ wallets is on its lowest average in a year. In theory, this indicates that miners are not, for the time being, planning to widely sell the bitcoins they earn. The last peak in terms of large outflows of bitcoins from miners’ wallets was in February.

One last piece of data: we note that the largest bitcoin wallets (whales) are still not selling on these price levels. The number of these large wallets remains constant since mid-May. A set of data that is therefore rather positive for the market. The only downside is that price action remains sluggish in the market, especially for Bitcoin. There is a lack of a real signal at the price level, including a return of volatility that would result in a frank bullish recovery. We see this in our detailed technical analysis:

We invite you to discover our video analysis (in french and dated from July 6):

Bitcoin (BTC)

The Coinhouse recommendation:
Buy on break up

  • Bitcoin is down slightly by 2.9% on a week and is trading around €29,000 ($35,000) on July 7. Volatility is very low. We are witnessing a neutralization between buyers and sellers. This phase of low price fluctuations will be followed by a strong movement, but it is still very difficult to predict when it will occur. The price area between €24,600 and €26,200 ($30,000 and $32,000) has held and is still acting as a long-term support.
  • The price area to watch is now between €28,900 and €30,500 ($34,500 and $36,500). If the price ends a day above $36,500, then it will be a first buy signal on breakout. The odds are then high that the price will head to the top of the range, around €33,200/$34,600 ($40,000/$42,000). We also have a bearish trend line on the RSI indicator that is about to be broken. If this happens in the next few days, it will further confirm the bullish recovery.
  • Beware, however, that a further deterioration in the trend is still possible, and don’t forget that the level between €22,100 and €23,000 ($27,000 and $28,000) is the ultimate support to hold in order to preserve the long-term bull market.

Ethereum (ETH)

The Coinhouse recommendation:
Buy on break up

  • Ethereum (ETH) has been more bullish than Bitcoin for the past one to two weeks. The asset is still gaining 10% over a week to quote around €2,010 ($2,380) this July 7. Beware, however, that this movement is not just temporary.
  • This July 7, Ethereum’s price is trying to break out of the middle of its range between €1,800 and €1,880 ($2,200 and $2,300) from the top. There is also the 50-day moving average (in orange on the chart) currently located at $2,400. If the price ends a day above €2,030 ($2,400), then this will be a buy on breakout signal for Ethereum, and the odds are high that the price will head to the top of its range in place since May 19, located at €2,460 ($3,000). Breaking this range from above would definitely restart the underlying uptrend in Ethereum.

Aave

The Coinhouse recommendation:
Hold

  • Very nice reaction this week from Aave, which gained 35% to €270 ($320) on July 7. The price reaction is driven by good fundamental news, as Aave’s teams announced that they were opening their services to institutional investors. Last week, we told you about a buying opportunity with the price back between $205 and $215, which has paid off perfectly. It is now necessary to keep the tokens bought below but not to buy again for the moment because the price arrived on a pivot zone around $350 which made resistance. In order to buy again, it may be interesting to watch if a new low is not formed on the price between the 20-day moving average at $245 and the former support of $280.

Tops & flops of the week (top 50 marketcap)


Tops

1- Compound (COMP) : +52%
2- Aave : +33%
3- Uniswap (UNI): +23%


Flops

1- Theta Fuel (TFUEL) : -19%
2- Internet Computer (ICP) : -17%
3- Theta Network (THETA): -12,7%

Dans cet article, toute information est donnée à titre indicatif, même si elle a été établie à partir de sources sérieuses et réputées fiables. Elle ne saurait constituer de la part de Coinhouse ni une offre d’achat ou de vente d’actifs numériques, ni une offre de services sur actifs numériques et ne peut être assimilée à un conseil, une incitation ou une recommandation à opérer sur les actifs numériques visés. Elle constitue une simple information dont l’utilisateur conserve l’absolue maîtrise. Nous vous informons que si vous choisissez d’investir dans les actifs numériques, vous devez connaître nos conditions générales de ventes (https://bit.ly/2FGW2ek) et accepter les différents risques listés et définis sur notre page d’avertissement légal (https://bit.ly/3c4sQKc)

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