Crypto Technical Analysis Report | 5th-Aug-2022

The crypto market held onto gains on Thursday as Bitcoin signed above the $23,000 level. The crypto market was unfazed by Solana’s attacks, which drained the wealth of 8,000 wallets. Markets digested US House Speaker Nancy Pelosi’s visit to Taiwan on August 2nd, 2022, prompting many investors to steer clear of risky assets amid potential US-China tensions. With the exception of BNB and TRX, all other major crypto tokens are trading mostly in green. Other tokens also rose slightly. The cryptocurrency’s global market cap traded higher at $1.06 trillion, falling marginally in the last 24 hours. However,  total trading volume fell more than six percent to about $62.59 billion.

Read about: Solana Under Attack.

Bullish BTC prices fail to lift the market through the week, but buyer interest gives hope. Bitcoin (BTC) returned to base on Aug 4th as higher levels gave way to a battle around the 200-week moving average (MA). The Wall Street market open provided only a brief change in sentiment, with the pair surging above $23,000 before resuming previous behaviour.  The atmosphere didn’t change with the news that investment giant BlackRock had partnered with Coinbase to offer crypto trading to clients. Instead, the familiar status quo implied by the 200-week MA just above $22,800 entered another chapter where bulls and bears are still fighting for control. On-chain analytics resource Material Indicators found that a class of whales active on the largest global exchange, Binance, were more willing to play it safe that day. With the upcoming options expiry today, BTC bulls need to push the price above $24,000 on Aug 5th to lock in a $90 million profit. On the other hand, the bears’ best-case scenario sees a push below $22,000 to lock their gains at $75 million.

Ether (ETH) price is up 60% since May 3rd, outperforming the leading cryptocurrency Bitcoin (BTC) by 32% in that time. However, there are indications that the current $1,600 support is lacking strength as network usage and smart contract deposit metrics weakened. Additionally, ETH derivatives are showing increasing selling pressure from margin traders. The positive price action was mainly driven by the increasing certainty of the merger, which represents Ethereum’s transition to a Proof-of-Stake (PoS) consensus network.  Ethereum’s Total Value Locked (TVL) has benefited greatly from the collapse of the Terra ecosystem in mid-May. Investors moved their decentralised finance (DeFi) deposits to the Ethereum network thanks to its strong security and battle-tested applications. Currently, the Ethereum network has a 59% TVL market share, up from 51% on May 3rd, according to data from Defi Llama. Risk metrics for options show that professional traders are less afraid of a potential crash, but at the same time, players in the margin markets have been liquidating bullish positions as ETH price tries to establish $1,600 support. Investors appear to continue to monitor the impact of notional TVL deposits and smart contract demand on grid gas prices before placing any more bullish bets.

On the macro side of things, Investors have reduced their risk as the Federal Reserve hikes interest rates and reverses its record $8.9 trillion balance sheet. As a result, the Bloomberg Commodity Index (BCOM), which measures price changes for crude oil, natural gas, gold, corn and lean hogs, is down 9% over the same period. Traders continue to seek shelter in the US Treasury bonds and cash positions, San Francisco Fed President Mary Daly said on August 2nd that the central bank’s fight against inflation is “far from over”. However, the tighter monetary impact on inflation, employment levels and the global economy remains to be seen.

Technical Outlook:

BITCOIN:

Bitcoin Chart | 5th August 2022
Bitcoin (BTC) Chart

BITCOIN after consolidating in a range from $18,000 to $23,000 gave a breakout on the up side on 19th July and made the high of $24,287. The asset witnessed some profit booking and started to trade in a ‘Falling Channel’ pattern. Last week, BTC made a ‘Dragonfly Doji’ candle at the key support (lower trendline of the channel) and rallied up to $24,666. Post this move, the asset made a series of small red candles indicating indecision. BTC is trying to take the support at its 20 Day Moving Average. If it holds and sustains above the support then we can expect the bulls to resume its up-move. However, to witness a rally the asset needs to break and close above $24,500.

ETH:

Ethereum Chart | 5th August 2022
Ethereum (ETH) Chart

ETH after making the low of $881 started trading in a range from $1,000 to $1,275 for three weeks. The asset finally gave a breakout on the upside and surged up to $1,784 by forming a ‘Higher High Higher Low’ pattern. Post this move, the asset is facing stiff resistance at the key level of $1,700-$1,750 (Horizontal Trendline) and is consolidating between $1,600 – $1,725. Hence, to further rally, ETH needs to break and give a weekly close above $1,750.

BNB:

BNB Chart | 5th August 2022
BNB Chart

BNB after making the low of $183.4 showed good signs of recovery and started trading in an ‘Ascending Channel’. The asset was facing a stiff resistance at $275. The asset has given a breakout above the resistance and above the channel but with low volumes and has rallied up to $316. BNB can face resistance around $330 (Horizontal trendline and 200 Day Moving Average) whereas $300 and $275 will act as strong support for the asset.

Weekly Snapshot:

USD ($)28 Jul 2204 Aug 22Previous WeekCurrent Week
CloseClose% ChangeHighLowHighLow
BTC$23,844$22,630-5.09%$24,295$20,777$24,573$22,486
ETH$1,725$1,608-6.80%$1,775$1,363$1,760$1,568
BNB$277.29$310.7112.05%$280.13$240.11$317.54$274.82
Cryptocurrency1w – % Vol. Change (Global)
BitCoin (BTC)-10.20%
Ethereum (ETH)-13.77%
Binance coin (BNB)53.98%
Resistance 2$32,500$2,000$365$0.60
Resistance 1$28,500$1,750$330$0.45
USDBTCETHBNBBAT
Support 1$23,000$1,525$300$0.33
Support 2$20,000$1,300$275$0.25

Market Updates:

  • Cryptocurrency exchange Binance has hired co-founder Yi He to oversee its venture capital arm, Binance Labs, two months after raising $500 million for a new fund focused on Web3 and blockchain investments. 
  • Blockchains and the applications running on them have intrinsic value, Bank of America found in a research paper.  
  • Galoy, the company behind the open-source banking platform that powers El Salvador’s Bitcoin Beach wallet, has started offering its Stablesats product. 
  • A Reddit user collected quotes from internet NFT haters and famous sceptics like Warren Buffet, Peter Schiff and Dan Olson.

Disclaimer: This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation, or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness, or reliability of the information, opinions, or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum, etc are very speculative and are subject to market risks. The analysis by the Author is for informational purposes only and should not be treated as investment advice.

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