Technical analysis

Will Bitcoin set new 2019 highs this summer?

Julien Moretto – 26 Jul 2019

Bitcoin starts this week with a decrease but remains rather stable over the last seven days. Bitcoin is trading at around $9,700 (€8,700) on July 24, up by 1.64% over a week. The bounce occured in our buying area of $9,100 (€8,100) but topped at $11,000 and the price has been dropping since last weekend.

According to CoinMarketCap, market capitalisation is slightly increasing to $268 billion, from $256 billion on July 17. We are still not witnessing an “altcoin season”, with Bitcoin still representing 66% of the cryptocurrency market. Volatility dropped below $20 billion traded on daily basis on Bitcoin since July 19, a decrease that can be explained by the summer period.

Altcoins remain correlated to Bitcoin and did not benefit from the last bounce. Some exceptions to note, such as Bitcoin SV (BSV), which increased by 42% in one week. The market is globally in a period of uncertainty and it is very difficult to anticipate the direction of the next major price movement. The fundamental news are contradictory too, alternating between good news such as the release of BAKKT announced for this quarter, and more worrying ones such as the Indian government which could soon prohibit any activity related to cryptocurrencies.

Here are the main price levels to watch out for:

Bitcoin

Bitcoin chart

Coinhouse recommendation: 
Wait

A technical setup in which we can project ourselves is a slightly downward channel. The bounce initiated on July 17 from our $9,100 (€8,100) buying area seems to have ended on July 20 at the $11,000 level. We are now in a new chart movement that should bring the price back to the $8900 to $9100 buy zone and even lower, on our second buy zone between $8200 to $8500 where there is a gap in the CME Futures Bitcoin contract, which has not been closed since mid-June.

Oscillators such as the RSI show that in the daily timeframe we can continue to drop. It will be necessary to monitor any reversal signal on these indicators, which will be an additional buy signal. The invalidation of this bearish scenario is the price going back above the $11,000 resistance.

Ethereum (ETH)

Ethereum vs Bitcoin chart

Coinhouse recommendation: 
Wait

Ethereum is up by 0.92% against the dollar compared to July 17, at $206 (186€) despite an interesting bounce from the psychological zone of $200 (180€) to $235 (210€). Ethereum actually remains correlated to Bitcoin and has also been decreasing since July 20. It is nevertheless closer to an interesting buy zone, located between $160 and $180 (€145 and €160), which matches Fibonacci extension levels and a high volume area. Unless a bullish break above $236 that would confirm a new bullish cycle on Ethereum, it is interesting to wait until the $160 to $180 zone for medium- or long-term buys on Ethereum.

Against Bitcoin, the situation remains the same since the break of the major support of 0.025 btc/eth. The price is approaching the 0.016 to 0.018 btc/eth level which could be an additional buy signal if trend reversal signals are observed in this area.

Litecoin (LTC)

Litecoin vs Bitcoin chart

Coinhouse recommendation: 
Buy

Litecoin makes a better performance than Bitcoin and Ethereum this week, gaining 6.63%, at $89 (€80) on July 24.

Litecoin is already in our buy zone that we consider interesting for mid-term investments: the $80 to $88 (€68 to €75) levels. We notice that Fibonacci extension levels coincide with a pivotal chartist level that acted both as resistance in April 2019 and as support in May 2019.

The last week bounce put Litecoin to $106. He is currently dropping this week to retest the upper level of our buy zone around $80. Our bullish scenario will be invalidated on Litecoin if the price falls below the low of July 17 at $78. A scenario that remains unlikely but could occur if Bitcoin fall sharply.

Top & flops of the week (top 50 marketcap)

Tops

1- Bitcoin SV (BSV) : +42%
2- LISK : +27,33%
3- TEZOS (XTZ): +15,16%

Flops

1- Bitcoin Gold (BTG) : -17,64%
2- Holo (HOT) : -4,25%
3- Zcash (ZEC): -2,66%

Hot crypto news of the week

The Intercontinental Exchange (ICE) startup, Bakkt, is finally starting to test two of these new contracts. A daily future contract and a monthly future contract. Bakkt and ICE, the parent company of the New York Stock Exchange (NYSE) among others, would be the first to issue future contracts fully backed by real Bitcoins and available to US citizens. The launch of these contracts has been delayed several times because the company is waiting for the green light from the American regulators.

The US Regulator CFTC is investigating BitMex to determine whether it has violated US laws by allowing US citizens to access its services. BitMex is by far the largest volume generating platform on the cryptocurrency market ($1T$ in 2018), and allows you to trade on margin and take aggressive leverage positions. The closure of this service to american citizens, who are responsible for the majority of the platform’s volume, would have an impact on the market as they would probably have to close their positions in a relatively short window of time. BitMex had already closed trading in the United States in 2018 following remarks from the Canadian regulator. This time, it is part of a global movement of regulators who have stepped up their actions and put pressure on crypto exchanges. For example, many marketplaces delist tokens for fear of selling unregulated financial securities.

The WBTC, a tokenized version of bitcoins on the Ethereum blockchain, has been added to compound.finance’s services. Compound.finance is a decentralised system for borrowing and lending cryptoassets. Although WBTC is partly centralised because the service passes through BitGo for custody, this now means that users can store their bitcoins to borrow other assets such as more WBTC, ether or DAI. This allows you to increase your exposure to the desired asset or to make a credit without having to sell your 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.

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