This week the market was more or less dominated by bears. The recent price action of Bitcoin (BTC) shows that it struggled to maintain the $30,000 support level after a brief rally.
The inability of Bitcoin to sustain a significant rally above $30,000 indicates a lack of strong bullish momentum in the market. It suggests that there might be resistance from sellers at higher price levels, preventing the price from making substantial gains. Indeed, the year-to-date performance of Bitcoin (BTC) and Ethereum (ETH) spot prices has shown a notable divergence in favour of BTC especially due to multiple spot Bitcoin ETF applications have been published in the Federal Register, raising optimism in the crypto community that the path to approval was gradually being laid. The global market capitalization is at $1.21 Trillion while the global volume has fallen by around 3.6% over the day now at $31.4 Billion. The dominance of BTC is at 48.3% falling below 50% in a while suggesting the beginning of the altcoin season.
On July 20, Bitcoin struggled to maintain its position above $30,000 after the Wall Street market opened. An analyst predicted that the crypto could return to its previous range of lows. The price of Bitcoin faced rejection at the 21-day simple moving average (SMA), which was at $30,400, and the market retraced its intraday gains completely. During the same day, macroeconomic events, such as strong tech earnings and a slowdown in U.S. jobless claims, were observed. These events had a notable impact on the U.S. dollar, with the U.S. Dollar Index (DXY) gaining ground and reaching close to 101, which is significant as it’s the first time in several days that the index has approached this level. The lower-than-expected initial jobless claims figure was particularly favourable for the U.S. dollar, as it indicated a slower trajectory for increasing layoffs, leading to a positive effect on the currency. However, despite these macroeconomic events, Bitcoin faced resistance at the 21-day SMA, and the market sentiment remained cautious as the crypto struggled to maintain gains above $30,000. The BTC options expiry on Friday, July 21, could potentially have an impact on Bitcoin’s price and market sentiment. If there is a large concentration of options contracts with a strike price of around $30,000, it could create a strong resistance level as traders may try to defend or profit from their positions. This could lead to increased selling pressure around that price level, making it difficult for Bitcoin to break above and sustain gains.
The recent price action of Ether (ETH) indicates that the bulls are showing interest in buying the dips to the 50-day simple moving average (SMA) of around $1,853. This support level has proven to be significant in preventing further downward movement. This buying pressure indicates that there is demand for ETH at this level, which could lead to a sideways trading pattern between the 50-day SMA and the psychological resistance level of $2,000. The gradually sloping up 20-day exponential moving average (EMA) at $1,898 is another positive sign for the bulls, as it indicates a potential upward trend. Additionally, the Relative Strength Index (RSI) being in the positive territory suggests that there is buying interest in the market. Overall, the current price action indicates a potential consolidation phase between the 50-day SMA and $2,000. However, as market conditions can change rapidly, it’s essential to keep a close eye on price movements and other market factors to make informed trading decisions.
On the macro front, Given the recent weak macroeconomic indicators, it is likely that bearish sentiment will continue to impact Bitcoin’s price. The lower-than-expected growth in China’s second-quarter gross domestic product and the below-consensus U.S. retail sales figures may contribute to cautious market sentiment. Moreover, regulatory uncertainties in the United States are affecting the crypto industry. On July 19, Nasdaq suspended the launch of its crypto custodian solution due to a lack of regulatory clarity. Additionally, on July 14, Coinbase announced the suspension of its staking services in certain U.S. states following an SEC lawsuit accusing the exchange of operating as an unregistered security broker. These factors combined may create a challenging environment for Bitcoin and other crypto assets, as investors and traders navigate through uncertainties and regulatory developments.
Technical Outlook
Bitcoin:
BITCOIN after taking multiple supports at $25,000 (Horizontal Trendline, 200 Day Moving Average & 50% Fibonacci Retracement level) witnessed a sharp rally and the prices surged almost by 28% making the high of $31,804. Post this move, the asset saw some profit booking as the bulls failed to push the prices above the key resistance level of $32,500 and are currently trading in a narrow range from $29,500 to $30,500 with low volumes. Breakouts on either side of the range with good volumes may further decide the trend for the asset. $32,500 and $28,500 are the key resistance and support levels respectively.
ETH:
ETH made a ‘Bullish Harami’ pattern at the recent low of $1,628.4 (on 15th June 2023) and has surged almost by 24% up to $2,031.4. Post this move the asset saw profit booking and the prices dropped to $1,876 as the bulls failed to push the prices above the previous high of $2,146. Currently, ETH is consolidating around $1,900 and is taking good support at its 50-Day Moving Average. If it holds and sustains above the support then we can expect the bulls to resume the up move whereas a break below the support will lead to further downfall and the asset can test the next support level which is at $1,750.
BNB:
BNB made a ‘Tweezer Top’ candle at the recent top of $350 and it has been trading downwards since then. The asset was trying to take support at the psychological level of $300. However, the bulls failed to defend the level and it finally broke the support. After breaking the support of $300, BNB witnessed a sharp fall and made a low of $220 within eight days. The asset took the support exactly at the Previous bottom of December 2022 and didn’t break the key level of $220 and bounced back from $220.4 up to $257. Post this move, BNB was trading in a broad range from $225 to $250. The Bulls finally gave a breakout above the range and made the weekly high of $261. If it sustains above $250 to $255 then we can expect it to further rally up to $280 levels.
Weekly Snapshot:
| USD ($) | 13 Jul 23 | 20 Jul 23 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $31,476 | $29,792 | -5.35% | $31,815 | $29,777 | $31,582 | $29,556 |
| ETH | $2,007 | $1,891 | -5.76% | $2,012 | $1,832 | $2,026 | $1,880 |
| BNB | $256.49 | $242.73 | -5.36% | $257.27 | $231.65 | $261.10 | $238.70 |
| crypto | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | -10.40% |
| Ethereum (ETH) | -21.21% |
| Binance Coin (BNB) | 2.49% |
| Resistance 2 | $37,250 | $2,450 | $0.95 | $285 |
|---|---|---|---|---|
| Resistance 1 | $32,500 | $2,150 | $0.75 | $255 |
| USD | BTC | ETH | Matic | BNB |
| Support 1 | $28,500 | $1,750 | $0.50 | $220 |
| Support 2 | $25,000 | $1,600 | $0.41 | $200 |
Market Updates
- The state of Kuwait is the latest jurisdiction to ban virtually all operations involving crypto assets like Bitcoin. On July 18, Kuwait’s main financial regulator, the Capital Markets Authority (CMA), issued a circular on the supervision and issuance of virtual assets in the country.
- Digital currency investment product, Grayscale Bitcoin Trust (GBTC), was one of the best performers at Cathie Wood’s ARK Invest in the second quarter of 2023.
- The United Kingdom government has rejected a proposal made by the House of Commons Treasury Committee to regulate crypto retail trading in the same way it oversees gambling, highlighting that it “firmly disagrees” with the committee’s stance.
- FTX has sued former CEO Sam Bankman-Fried and several other former key executives from the now-bankrupt crypto exchange to recover more than $1 billion in misappropriated funds.
