Will the cryptocurrency market continue its rise?
Julien Moretto – 3 Jul 2019
Bitcoin and the overall cryptocurrency market have entered a very volatile cycle once again. Last week, the very strong increase in Bitcoin reversed just below $13,900 (€12,000). Compared to the high of June 26, Bitcoin has corrected 20% and trade at $11,100 (€9900) this Wednesday afternoon.
According to CoinMarketCap, market capitalisation is down to $324 billion, compared to $360 billion last Wednesday. Bitcoin dominance is still high at 62.2%. Market volatility is returning to record highs, with daily price variations up to 15% on Bitcoin, even higher on some altcoins.
The drop on the altcoins is smaller compared to Bitcoin. For example, Ethereum price compared to Bitcoin is back on an important support level and we can expect a bounce from there. Chainlink (LINK) made huge gains with +70% this week, + 700% since the beginning of May.
Here are the main price levels to watch out for:
Last Wednesday, the $13,400 (€12,000) area we had identified acted as a resistance. It corresponds to the Fibonacci retracement level of 61.8% of the entire 2018 bear market. Indicators such as RSI or MACD remain overheated on higher timeframesm especially the daily and the weekly. The drop of Bitcoin these last days reached up to 30% on July 2, which leads us to believe that, despite technical bounces, we are still in a downward correction, at least short term.
For those who want to make speculative transactions short or medium term, profits taking can be considered on the current levels of $11,500 (€10,200) with the objective of buying back on daily supports. A first interesting daily support is the level of $9200/9400, which acted as a resistance at the end of May.
Those seeking a more aggressive risk/reward ratio will target a second support around $8300/8400: a pivotal level that has served both as support and resistance before and where a lot of trading volume has been executed. These downward targets will be invalidated if the Bitcoin price rises again to the last intraday high of $12,400 (€10,900). We will the adopt a bullish scenario.
Ethereum loses 12% against the dollar compared to last Wednesday, and is trading at $295 (€261). Compared to Bitcoin, the situation has changed a little bit since June 26: Bitcoin has corrected more compared to Ethereum. As a result, Ethereum’s chart relative to Bitcoin bounced.
The major support of 0.025 btc/eth has once again played its role. However, at this stage, we cannot anticipate that an altcoins season will begin. The scenario of a further decline in Bitcoin with a smaller decline in altcoins is entirely possible. Thus, the price of Ether against Bitcoin will appreciate, but Ether will still lose value against fiat currencies. It is therefore too early to be bullish on Ethereum.
A scenario in favour of an altcoins season would be Bitcoin stabilising while altcoins like Ether rise. It is necessary to wait for the price of the Ether against Bitcoin to first go back to the pivot zone of 0.030 btc/eth and then break it up to validate this scenario. This will be the confirmation signal of the bullish scenario on Ethereum. Be careful, a break of the major support of 0.025 btc/eth would invalidate this scenario and would be a strong sale signal on Ethereum.
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Litecoin is also bearish this week and loses 11%, now trading at $120 (106€). Similar to Ethereum, he is losing less than Bitcoin this week and his price against Bitcoin bounced on June 26.
The bounce occured on the initial bullish breakout zone that we had identified, located around 0.010 btc/ltc. The price quickly retested the pivotal level of 0.011 btc/ltc, which was used as a support in May. As long as the price of Litecoin against Bitcoin is trapped between these two levels, there are no new positions to open.
We keep a bearish bias on Litecoin, considering that its halving which takes place in a month has already been reflected in the price. A break below the 0.010 btc/ltc support will be an even stronger sell signal. Our scenario will be invalidated if the price of the Litecoin against Bitcoin makes a daily close above the current resistance of 0.011 btc/ltc.
Tops & flops of the week (top 50 marketcap)
1- Chainlink (LINK): +70,75%
2- Basic Attention Token (BAT): -2.99%
3- VeChain (VET): -3,18%
1- Ontology (ONT) : -19,90%
2- Cardano (ADA) : -18,76%
3- EOS : -18.22%
Hot crypto news of the week
Facebook is officially a candidate for the “Bitlicense” from the New York State for its Calibra wallet. Benefiting from this graal in this state, renowned for having the strictest regulation in the world for digital assets, would be a big step forward for Facebook and its Libra project. Facebook has also opened files with the FCA (UK) and FINMA with means and network to carry out these administrative battles. However, the experts interviewed on the subject indicated that Facebook will not receive any favors and will even encounter some resistance from regulators.
The G20 is looking at digital assets, at the Osaka summit, the G20 made several announcements on digital assets transactions, calling for a clarification of the status and framework. These announcements have two levels of interpretation: on the one side, optimism, regulators are moving towards a recognition of digital assets and their “normalisation” will necessarily involve being subject to the same rules as any type of asset or transaction. On the other pragmatic side, pretexting a fight against money laundering is a way to strength surveillance and decline in privacy at stake. The stated objective for the moment is to set up “guidelines” from which states can draw inspiration to produce their own regulations.
Canada and the Netherlands are testing flights without passports. Travellers can present a mobile application encrypted by blockchain technology where all their passport data is stored. A pilot project to accelerate the management of passenger flow.
A thousand billion dollars! (1T$) is the record volume recorded over a year by the leading derivatives company BitMex on its market place, far exceeding its competitors.
However, this highly specialised market, reserved for professional traders, is opening up to competition from Kraken, which, following its acquisition of the “Crypto Facilities” platform, offers the Kraken Futures product, or the highly anticipated arrival of Binance, the world leader that announced the imminent arrival of this type of product on its platform, can this be the peak before the decline of BitMex?
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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