The Bitcoin price remained relatively flat in August 2019. This week shows low volatility with Bitcoin losing 0.53%, trading around $10,150 (€9,150) on August 28. The market has entered a compression cycle that will lead to a strong movement in the price of cryptocurrencies and will indicate the main trend for the rest of 2019.
According to CoinMarketCap, market capitalisation is stabilising at around $260 billion at the end of August 2019. No change compared to the beginning of the summer: Bitcoin is leading the way on the market, altcoins remain correlated but under-performing for weeks.
Trade volumes are low, around $15 billion traded daily. The dominance of Bitcoin remains high: at 69% of market capitalisation, and does not suggest any “altcoins season” at this time. Only Ethereum Classic (ETC) offered a decent bounce this week with nearly 20% increase.
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Wait for compression to break
The Bitcoin price is consolidating and we are witnessing a drop of volatility around the psychological level of $10,000 (€9,100). Technically, this consolidation could take the form of a neutral pattern. The longer the consolidation lasts over time, the more powerful the price movement will be. However, it is impossible to know with certainty whether this movement will be bullish or bearish.
In such a market configuration, it is therefore more appropriate to wait for the price to show us a clear direction and to identify strategic price levels on which to act.
Considering a bullish scenario, the horizontal resistance of $11,000 is a first level to monitor. But it is above all the descending channel that has been resisting since the $13,900 on June 26 that should be observed. Located around $11,500 on August 28, a break up, accompanied by a clear return of volumes, will be a buy signal. The targets will be a return to the highest levels from 2019 at $13,900 at first.
Considering a bearish scenario, the ascending channel that has supported the price since early June 2019 is now around $10,000. A break down of this level will be a first warning. But it is above all a break down of the last low of August 15, at $9500, that will give a sell signal and a confirmation of a bear break from the current consolidation.
Wait for compression to break
Ethereum has performed way less than Bitcoin in recent months. It has been highly correlated with it since the beginning of August. Ethereum is also very stable over the last week with – 0.73%, at $186 (€169) on August 28.
Since our last analysis in early August, the Ether price has come into the medium-term buy zone located between $160 and $180 (€145 and €160). The price has stagnated since above this area which acts as a support. For those who bought Ether in this area, you can still keep the position.
However, to confirm a clear uptrend on Ethereum, the price must cross the $236 (€212) resistance and before that, the 50-day moving average which now stands at around $213. On the other hand, if we observe strong bearish candles and a daily close below $173, it will be a sell signal. Such a movement will surely coincide with a bear break from consolidation on Bitcoin.
Except a few negligible coins, the altcoin market has remained highly correlated with Bitcoin for weeks and volatility is also decreasing. The entire cryptocurrency sector is waiting for the next clear direction to be taken by the Bitcoin chart. The break direction of the current consolidation on Bitcoin will be decisive for the future trend on the entire market for the rest of 2019.
Top & flops of the week (top 50 marketcap)
1- Ethereum Classic (ETC) : +13,66%
2- Basic Attention Token (BAT) : +8,28%
3- IOTA (MIOTA) : +8,25%
1- Chainlink (LINK) : -8,56%
2- NEM (XEM) : -6,83%
3- Binance Coin (BNB): -6,28%
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