Technical analysis

Volatility at its lowest on Bitcoin, DeFi continues to lead the market

Julien Moretto – 22 Jul 2020

It is now an “Alt Season” which has been established for several weeks on the crypto market. Bitcoin’s volatility has reached historic lows, with a price “stuck” between $9,000 and $10,000 since the beginning of May and trading at €8,100 ($9350) on July 22, almost stable over a week. At the same time, less capitalized cryptos have delivered impressive monthly or weekly performances. Among them stand out projects linked to decentralised finance (DeFi). For example, Chainlink (LINK) achieves +65% over one month, Aave (LEND) +90% and Synthetix (SNX) +143%.

As a result, capital and volumes are pouring into these projects, to the detriment of top market values such as Bitcoin and Ethereum. But beware, markets remain cyclical and no trend lasts forever. This extreme contraction in volatility on Bitcoin will eventually explode into a strong trend movement. And when the price of Bitcoin starts to fluctuate sharply again, it is very likely that the performance currently observed in the DeFi sector will no longer be the same. We analyze for you the price levels of Bitcoin that could trigger the next trend movement, as well as future buying opportunities on DeFi tokens.

  • According to CoinGecko, Market capitalization is up slightly to $281 billion from $277 billion last week.
  • Bitcoin’s dominance remains stable at 61.1% this week, but remains in a bearish trend over the past few months
  • The best performance of the top 50 is to be attributed to Aave (LEND) with +32% over the week.

We invite you to discover our full analysis in video, recorded on july 21, in french:

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Bitcoin (BTC)

Coinhouse’s Recommendation : 
Hold / Wait

  • Bitcoin’s volatility is among the lowest levels observed in the last three years. The price contraction is extreme and will result in a rapid and powerful price movement. Our latest recommendations change only slightly. In the short term, it is the price level of €8,300 ($9,430) that remains to be watched. It corresponds to a key Fibonacci retracement level of the June 23-27 drop, and buyers are trying to push the price above this level again this week. A clear breakout of this level will greatly increase the likelihood of a strong bullish move ahead. However, it will then be necessary to break up the intermediate resistance of €8,700 ($9,800).
  • On the other hand, if there is another sell rejection this week and a break of the 7,900 ($9,030) support, this will be a sell signal with the probability of an impulsive downtrend. In the case that this scenario takes place, we will not buy back until the 6,900/7,100 ($8,000/$8,200) zone.

Ethereum (ETH)

Coinhouse’s Recommendation : 
Hold / Wait

  • Ethereum (ETH) is also stable over one week to stand at €211 ($235) on July 22. The price continues to evolve in the range between €200 and €220 ($215 and $250). Buyers have been trying since the beginning of the week to break the $250 resistance. Breaking the $250 resistance will be a buy signal or a strengthening trend and will propel the price to the next $260 ($275) resistance zone. If volatility explodes, the probability of breaking this other resistance is high.
  • But beware of the downtrend scenario that will be set up if the price of Ether falls back below the previous resistant level of €200 ($215), this will be a strong selling signal and we will not try to buy again before the €150 ($170) support.

Chainlink (LINK)

Coinhouse’s Recommendation : 
Buy on signal

  • The last few weeks have been exceptional for Chainlink. We had been recommending to buy the bullish breakout of the annual range at $4.60. Since then, the performance speaks for itself: +66% in one month despite a 12% decline this week. The price is €6.30 ($7.20) on July 22.
  • It is now too risky to buy on Chainlink at a random level. A correction is currently in progress. We’ve been monitoring the relevant Fibonacci retracement levels since the $4.60 break. If Chainlink returns to the €5.30-€5.80 ($6.05-$6.60) range and we see bullish reversal signals, it will be a good time to buy back to play a continuation of the uptrend.

Top & flops of the week (top 50 marketcap)


Tops

1- Ampleforth (AMPL) : +58%
2- Aave (LEND) : +32%
3- Synthetix (SNX) : +29%


Flops

1- Chainlink (LINK) : -12,3%
2- Cardano (ADA): -9,1%
3- VeChain (VET) : -7,6%

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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