It’s Wednesday, 1st September, bringing you another edition of Cointribune’s crypto analysis! Find out everything that has already happened in the market and what to expect next in our new article! If you want to read the previous issue of the column, please follow the link. Here we go!
A new day brings new frustrations. Instead of surprising everyone and breaking through the annoying resistance, Bitcoin chose to capitulate and closed the previous day with an impressive red candle, and a retreat well below $47,000. At the time of writing, the first cryptocurrency is trading near the $46,600 level.
The time has probably come and there is no point in denying it now. Bitcoin is moving within the descending trading channel (purple) and the asset, unfortunately, is not able to break out yet.
The same scenario also fits into the triangle formation shown on the chart. That means that if the market situation does not change suddenly, Bitcoin will start moving towards the $35,000 zone, because it is the support of the ascending trading channel (bottom blue line). The next key level will be $30,000, as this area is the lower boundary of the triangle shaped by the formation of the lows (purple rectangles at the bottom).
If we evaluate the lows and highs, we can conclude that the former, unlike the latter, are all around the same price level. This indicates the presence of a strong psychological level acting as a support in the studied zone. This is how we get fixed lows and smoothly decreasing highs.
The presence of a strong support is a fact, which indicates the possibility of further growth. If it can resist the pressure from the bears, which might intensify if the real sell-off begins, the $30,000 mark is a springboard for another local trend reversal, which might get us back to retest the key resistance.
On the other hand, the continuously declining highs on top of the unchanged lows are provoking the formation of a contraction. If new players and additional volume do not suddenly reinforce the bullish ranks, it will result in a breakdown of the triangle and a significant drop in the BTC price.
Going back to the Bitcoin chart, we can notice that its movements within the 1D timeframe are typical of a bullish pennant. The entry into the triangle, with the apex pointing downwards, was made with a bottom-up movement. This pattern means there is a possibility that when BTC reaches the support level, the first cryptocurrency bull run will start again in the market. However, it may start earlier if the players with significant amounts of funds join the bulls.
If we go to the weekly chart (one candle – one week) and trace the situation from the start of the last bull run, the formation of a global bullish pennant becomes even more evident. I have marked its boundaries with a red triangle.
In case of a breakout from this pattern, Bitcoin will start a new round of growth. Judging by the size of the move from the beginning of the rise to the last all-time high, we are about to see a hike to the $90,000 – $100,000 levels.
In the end, the traders still have the last word. It is likely that many players have already estimated the prospect of further growth, so they don’t dare to make deals now, when there is still a chance of local correction, after which there will be a chance to buy BTC at the values a bit lower than today’s. However, as soon as there are prerequisites for the first cryptocurrency to start rising to new heights, many of the players, including those who have already withdrawn their BTCs from the market and are just monitoring the situation, will start buying BTC actively. Which means that in the long term we will definitely see growth.
The second most capitalised cryptocurrency once again asserted its independence from Bitcoin’s vagaries and ended the past day with significant gains. At one point, Ethereum even reached the values above $3,500.
However, having barely made it out of the white trading channel, the biggest altcoin suddenly came to a halt. At this stage, a consolidation above the $3,400 zone is underway.
We look at the picture globally, so that most of the mentioned price movements will not take place instantly, but over a certain period (days, weeks). On smaller timeframes, though, the magnitude of the consolidation breakout looks more impressive.
Looking at the patterns, we can see that starting from the tail originating at the lower boundary of the triangle, where the support of the white trading channel is located, ETH forms what is commonly referred to as a “rectangle”. Essentially, we are dealing with a “growth-consolidation-growth” system, and judging by the fact that the start of this local movement was at $1,800 and the consolidation began only at $3,200, Ethereum has about $1,400 more to gain. Thus, there is a good chance that the second most capitalised cryptocurrency will reach levels near $4,600.
Problems may arise only within the range of $4,000 – $4,200, which in this case acts as a psychological resistance level.
Even though globally Bitcoin looks bullish, the latest dump has pushed the index a bit more into the “fear” zone. However, this can be explained by the fact that many of the players in the market prefer short or medium-term leveraged trades, which forces them to control their own risk by closing positions that are unprofitable in the foreseeable future.
This may have been partially facilitated by PlanB, a popular analyst on Twitter, who adjusted his Stock-2-Flow model and announced that Bitcoin will spend this month near the $43,000 level. It’s up to you whether to believe it or not. Generally, his assertion does not contradict our analysis, yet in case the players watching the situation decide to enter the market now, PlanB will have to adjust his own forecasts again.
The top ten cryptocurrencies according to CoinMarketCap reacted ambiguously to Bitcoin dynamics. If yesterday’s favourite, Solana, suddenly decided to take a well-deserved break and take a breather, Polkadot took advantage of the opportunity and made a statement to the world with a decent daily return.
Dogecoin is also starting to show signs of life. It is likely that soon the Dogecoin Foundation will be active again and the top meme cryptocurrency will become a long-awaited success.
Cardano has reacted weakly to Bitcoin’s claims. I’ve been looking at the four-hour chart of this asset, and from the looks of it, the coin is poised for a nice pump. Its price fluctuations have already become so infrequent that it seems as if ADA has frozen in place altogether. The chances of a significant increase are high.
The new day’s gainer, among the top 100 cryptocurrencies according to CoinMarketCap, is Kusama. In the last 24 hours, this asset has brought its holders around 20% profit. At the time of writing, the coin is trading at $388.15.
In general, this asset looks promising. After the recent pump, KSM broke above one of the resistance levels and now it is trying to consolidate within a new trading channel. Unless BTC’s meddling forces this asset into a significant correction, one of the levels to be expected would be $500 for a coin.
Fantom becomes the loser of the day among the top 100 cryptocurrencies according to CoinMarketCap. After a staggering growth, the asset went for a logical correction; however, it has not yet exhausted its potential within the new trading channel. With a weekly yield close to 40%, this coin lost only 12% during the day. Not the worst possible performance, to put it bluntly.
Bitcoin will undoubtedly continue to rise. Even despite the lack of volume and lack of initiative from the buyers, the bigger picture looks really bullish. New price records are not far off. Ethereum continues to defend its independence from the vagaries of its older sibling, quite successfully. It is likely that very soon we will witness the second most capitalised cryptocurrency set a new all-time high. Overall, the situation in the market looks rather neutral. Many assets are just gathering their strength for the next round of gains. Some have already made their moves and are taking a well-deserved break.
Don’t forget about risk management and don’t neglect stop-loss orders. Especially now, when in the short term, anything can happen.
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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
|BITCOIN (BTCUSD) ₿||$30,087.07||0.85%|
|ETHEREUM (ETHUSD) Ξ||$2,043.29||1.11%|
|IMM. US (REIT)||$2,499.34||-0.58%|
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