On Friday, crypto tokens traded in a zone. Bitcoin however remained above $20,000 The sentiment towards the digital asset class was impacted by inflation concerns and hawkish comments on monetary policy. The crypto market is currently bearish, and there is little chance of meaningful recovery. All eyes now turn to the long-awaited Ethereum software update “The Merge”, due to be complete by the end this month. Global crypto market cap traded at $989.25 Billion, an increase of around 1% in the last 24hrs. The total volume of trading fell to $67.5 billion, however.
Similar pressures were experienced by BTC at Wall Street’s September 1 open, as the US dollar reached a new two-decade high. BTC/USD dropped to $19,658, 2.7% below the daily high. It was unable to break the $20,000 mark and turn stable support. Similar macro signals complicated the bullish picture. This impeded a US recovery. Dollar Index (DXY), which reached 109.97 on the day, was higher than its previous peak. This is the highest level since September 2002. Risk assets fell overall as the S&P 500 Index and Nasdaq Composite Indexes dropped 1% and 22% respectively. After the monthly candle fell 13.9%, the asset had its worst August performance since 2015. Bulls’ efforts to stabilize the spot price were crushed when the August close fell 13.9%. This was the second month that the monthly candle has closed below $20,000 since 2020. A key indicator on the chain emphasized that current BTC ranges were for accumulation and not selling.
In the days before September’s proof-of-stake transition, Ethereum’s native token Ether (ETH) appears to have been strengthening against the US Dollar and Bitcoin (BTC). The classic technical indicators of the ETH/USD/ETH/BTC charts support a bullish outlook. Bitcoin is losing investor attention. This has resulted in a decrease in assets under management (AUM), for Bitcoin investment products. It fell by 7.16% to $17.4billion in August. The AUM of Ethereum products, however, increased by 2.36%, to $6.81 trillion over the same time period. This suggests that Ethereum product investors are pre-merger. Since last week’s selloff, Ether (ETH), and ETH stake-related tokens, have performed relatively well. Ether dropped to $1.422 on Aug. 28 and now trades slightly below $1.600. The largest ETH staking platform Lido (LDO) is up 12% and 32% respectively from last week’s plunge to $1.55.
BTC trades at the lower end its 76-day trading range on the monthly outlook. Analysts warn that future Fed actions and record open interest could lead to future events of deleveraging. Market sentiments are softening as investors see the market back in extreme greed and fear index. Although it is not clear what could cause such an event, any continuation of the current downtrend, with the Dow and S&P 500 both ending their fourth day of decline through August in losses, could continue weighing on Bitcoin’s price. Data shows that the Dow closed August with a loss of 4.1%, while the S&P 500 (and Nasdaq) ended the month with losses of 4.2% and 4.6% respectively. Loretta Mester, President of the Cleveland Fed, stated that she expects the benchmark rate to rise above 4.1% and that proposed cuts through 2023 are unlikely. The Fed’s target range is 2.25% to 2.5%. 4% is significantly higher than the Fed’s target rate of 4%. Bear markets offer long-term investors attractive opportunities even though prices are low in the ecosystem. Venture capital firm Seven Seven Six, headed by Alexis Ohanian (reddit co-founder), is seeking $177.6 millions to fund a crypto mutual fund. Ex-Genesis and Galaxy Digital executives are also looking to raise $500 million. Even though the short-term outlook seems uncertain, investors could be looking for long-term opportunities.
Chart for Bitcoin (BTC).
After hitting a recent high of $25,211, BITCOIN saw a correction. Prices fell by almost 22.5%, reaching a weekly low of $19 5,520. The asset has been consolidating since then and trades in a narrow range of $19,550 to $22,400 over the past six trading days. BTC was trading in an “Ascending Channel” pattern on a daily chart. Prices were trying to find support at $20,500 (Horizontal trendline & Lower-up trendline of channel). BTC broke out on the downside of this pattern and has traded sideways ever since. Bears are in control of the market if there is a downward trending Moving Average and RSI lower than 50. As a strong resistance, $20,500 is recommended.
Chart for Ethereum (ETH).
After hitting a recent high of $2,000.30, ETH prices saw a sharp correction. Prices fell nearly 29% to $1,422. The asset gained support at $1,450 (50% Fibonacci Retracement Level), and is now showing signs of recovery, but in small volumes. ETH faces stiff resistance around its 20-day Moving Average. The prices could rise to the $2k mark once these resistances (20 Day Moving Average & Horizontal Trendline at $1,750), are removed. Strong support for ETH is at $1,500 & $1,275. Over the last week, RSI has been hovering around 50, indicating a neutral stance on the asset.
Chart Polygon (MATIC).
Matic created a ‘Cup and Handle’ pattern with a neckline of $0.63 and rallied to $1.05. The asset was then faced with multiple resistances at $1 (Horizontal Trendline and 200 Day Moving Average), and saw a correction of nearly 28%, dropping to $0.7582. Matic was trading sideways for $0.765 to $0.835. Matic has shown a breakout above this range and can surge as high as $0.95-$1. Matic has strong support at $0.75
JulyAugustPrevious MonthCurrent MonthCloseClose% ChangeHighLowHighLowBTC$23,336$20,050-14.08%$24,572$18,967$25,136$19,601ETH$1,672$1,154-31.00%$1,775$1,019$2,023$1,428MATIC$0.93$0.83-10.40%$1.00$0.45$1.05$0.76Crypto1m – % Vol. Change (Global)Bitcoin (BTC)-3.60%Ethereum (ETH)3.69%Polygon (MATIC)-51.78%Resistance 2$24,500$2,000$1.05$0.60Resistance 1$20,500$1,750$0.835$0.45USDBTCETHMaticBATSupport 1$17,500$1,500$0.75$0.33Support 2$15,000$1,275$0.63$0.25
The difficulty of mining a bitcoin block increased by 9 percent on Wednesday, making it this year’s second-biggest increase, which is likely to result in narrower profit margins for the industry.Non-fungible tokens have a licensing problem, and Andreessen Horowitz’s (a16z) crypto arm thinks it has an answer.The combined market capitalization of the two largest stablecoins, Tether and USDC, has begun to fall again, a sign that quantitative tightening in the crypto financial system has resumed, Morgan Stanley said in a research report.South Korean port city Busan signed an agreement with crypto exchange FTX to develop blockchain-based businesses in the coming months
Disclaimer: This report should not be regarded as investment advice. It does not consider the financial situation or investment goals of investors. When deciding whether an investment is right for them, all investors should take into account these factors and consult with a professional advisor. This report was prepared by the Company using information that it has access to, as well as information from public sources that have not been independently verified. The Company makes no representations or warranties, either express or implied, regarding the accuracy, reliability, correctness or completeness of the information, opinions or conclusions contained herein. This report is preliminary. The Company does not assume any obligation to revise or update the reports in response to new events or circumstances after the date of the report was made. Trading & Investments in cryptos viz. Bitcoin Cash, Ethereum, and other cryptos are highly speculative investments that are subject to market risk. The Author’s analysis should be used only as information and should not considered investment advice.
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