The effects of macroeconomic events are not confined to traditional markets; they also impact the emerging realm of crypto assets. These macroeconomic factors have become notable sources of risk that influence the often unstable valuations within the crypto sphere. Within this framework, the concept of a ‘soft landing’ is intricately tied to the Federal Reserve’s capacity to achieve a 2% inflation target without a significant uptick in unemployment rates. Despite Bitcoin’s relatively subdued performance in July, analysts suggest that prominent tokens could undergo a surge, mirroring the trajectory of other high-risk assets, If economic data continues to support the notion of a soft landing. As the Asian markets opened on Friday, Bitcoin was trading slightly below $29,200, showing no significant change over the past 24 hours and maintaining its position within a $500-dollar range that it has held for approximately two weeks. Notably, Bitcoin has struggled to surpass the $31,000 mark since mid-July.
Bitcoin’s short-term price outlook indicates the potential for further downside, according to analysis. The crypto experienced a dip below $29,000 on August 3, prompted by concerns surrounding Binance, one of the world’s largest exchanges. Although BTC price made a modest recovery before Wall Street’s opening, rumours of potential legal action against Binance by the United States led to a disappointing period for Bitcoin bulls, despite a brief climb above $30,000. While the trading range remains stable, the predictive tool Material Indicators suggests the likelihood of another bearish support test. Notably, Bitcoin’s volatility is still low, as evidenced by the Bitcoin Historical Volatility Index (BVOL), which indicates weekly volatility approaching levels seen at the beginning of 2023. Despite its recent stability and resistance to external factors, the leading crypto has been trading within a tightly confined range over the last six weeks. This unusual immunity to significant macroeconomic and industry events, which would typically prompt notable investor reactions, signals a potential shift towards more volatile market conditions based on historical patterns.
The period of tightly constrained trading within the Ether market took a downward turn on August 1st. However, the bears’ attempt to drive the price lower was met with resistance, as indicated by the significantly lower wick on the day’s candlestick. Notably, the bears managed to prevent the price from surpassing the 20-day Exponential Moving Average set at $1,873. Their efforts to maintain control are evident in their push to keep the price below the 50-day Simple Moving Average currently at $1,864. An interesting development involves the United States Securities and Exchange Commission (SEC), which has recently been flooded with applications for exchange-traded funds (ETFs) based on Ether futures. Remarkably, a total of 11 Ether-related ETF filings were submitted to the SEC in under a week. The latest application by ProShares, submitted on August 3rd, proposes an ETF that equally represents both Bitcoin and Ether.
On the macro front, A significant event unfolded in the financial landscape on August 1. Fitch, a respected credit ratings agency, downgraded the credit rating of the United States government from its pristine AAA rating to AA+. This rating cut indicated a reduced level of confidence in the U.S. government’s competence in managing its fiscal obligations effectively. This downgrade prompted investors to adopt a more cautious approach, resulting in a shift of funds away from assets like stocks, silver, oil, and long-term bonds. Instead, they displayed a preference for cash and short-term instruments, which are regarded as safer choices during periods of uncertainty. Beyond the yield dynamics of Treasuries, a declining U.S. Dollar Index (DXY) — a measure of the U.S. dollar’s value compared to other currencies — could potentially pose challenges. Should this lead to a decline in trust in conventional assets, investors might seek alternative forms of value preservation, potentially bolstering the appeal of Bitcoin.
Technical Outlook
BITCOIN
BITCOIN, after making the recent high of $31,804 witnessed some profit booking and the prices corrected to $28,585. The asset took the support at the crucial level ($28,500 to $28,250) and bounced back up to $30k. However, the bulls failed to manage their grip on the asset as it could not sustain above the psychological level of $30k and the prices dropped to $28,927. Currently, BTC is consolidating and making small candles with low volumes just below its 50-Day Moving Average. Bitcoin has very strong support at $28,500. If the price holds and sustains above the support then we can expect the bulls to resume the up move whereas $32,500 will act as a strong resistance and to witness a rally it needs to break and close above this resistance level.
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 $1,815.2 as the bulls failed to push the prices above the previous high of $2,146. Currently, ETH is consolidating just below its 50-Day Moving Average and is trying to take support at $1,800. 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 $1,625.
BNB
BNB made a ‘Tweezer Top’ candle at the previous 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. 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 is trading in a broad range from $225 to $250. Breakouts on either side of the range with good volumes will further decide the trend for the asset.
Weekly Snapshot
| USD ($) | 27 Jul 23 | 03 Aug 23 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $29,211 | $29,179 | -0.11% | $30,331 | $28,934 | $29,988 | $28,657 |
| ETH | $1,860 | $1,835 | -1.34% | $1,905 | $1,837 | $1,886 | $1,818 |
| BNB | $241.06 | #DIV/0! | $245.16 | $236.29 | $248.51 | $236.89 | |
| crypto | 1w – % Vol. Change (Global) |
| BitCoin (BTC) | -3.18% |
| Ethereum (ETH) | 1.03% |
| Binance Coin (BNB) | -34.91% |
| 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
- Hong Kong’s Local digital asset firm HashKey has successfully obtained all necessary licensing to expand its business from serving professional investors to taking on retail users, the firm announced on Aug. 3.
- Coinbase’s chief legal officer Paul Grewal has revealed the exchange is planning to file an order seeking the dismissal of a securities-related lawsuit against it and is confident the exchange will win its fight.
- Amid growing uncertainty among decentralised finance (DeFi) protocols around exposure to Curve, Aave founder Marc Zeller has proposed the Aave treasury buy $2 million worth of Curve DAO Token (CRV) from Curve founder Michael Egorov with USDT.
- The Litecoin halving event has been completed, with block rewards now halved to 6.25 Litecoin per block. On Aug. 2, the Litecoin blockchain went through its automated halving procedure at block 2,520,000.
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