Bitcoin continues its struggle to push and hold above $24K, as it has been rejected from this significant level for the third time. The price rebounded from the $20K support level last month and has been making higher highs and lows on the daily chart. This resulted in the creation of a bullish structure. Can the cryptocurrency finally break through its goal of the $24K resistance level?
The Daily Chart
As of this writing, Bitcoin has yet to break above the $24K resistance level. The 100-day moving average has reached the $24K range and is creating further resistance. In case of a short-term bearish pullback, the 50-day moving average – which currently sits around the $22K level – would be the first support. If the price breaks below the MA, bearish momentum would likely return. Thus, a downtrend continuation below the $20K support area is probable.
On the other hand, if the price finally breaks above the $24K level and the 100-day moving average, a quick rally towards the $30K support zone would be expected.
The 4-Hour Chart
The price has reached the higher boundary of the large bearish flag but has been rejected once again. The higher lows formed over recent weeks have resulted in a bullish trendline and could provide support in the short term. However, the RSI oscillator has printed a bearish divergence signal which points to a potential breakdown of the mentioned bullish trendline.
In this case, a drop towards the lower boundary of the flag and even a bearish breakout and continuation below the $18K low would be the most likely scenario. This is a continuation pattern that gets validated after a breakout and could lead to another bearish impulsive move.
It must be noted, however, that if the price breaks above the flag in the coming days, the bearish continuation scenario would not be ruled out completely, but it does seem less likely to occur.
The following chart illustrates Bitcoin’s Long Term Holder Realized Price alongside its price. It measures the average price weighted by the supply of what the long-term holders spent on their coins. It is diagnosed as the on-chain support or resistance level.
Historically, a bear market’s bottom is usually formed as the market suffers extreme fear. All market participants enter a capitulation stage, and the weaker hands tend to realize immense losses. However, the whales and long-term holders are usually the last cohorts to capitulate. This stage would be a proxy for the final phase of the bearish cycle.
Bitcoin’s price has surpassed the LTH realized price for the third time in its existence. This implies that the long-term holders are now in an aggregate loss. Although, it has bounced back above the crucial level and is beginning to recover. The next bull market will be initiated if the level successfully supports the price.
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The declining CPI numbers brought some positivity back to the crypto markets, as bitcoin spiked to almost $25,000.
The altcoins followed suit, and many, such as ETH, marked multi-month highs of their own. The crypto market cap is up by $70 billion in a day.
Bitcoin Neared $25K
After the relatively calm weekend, which bitcoin spent primarily around the $23,000 mark, the asset went on the offensive on Monday and jumped to the north of $24,000.
However, the bears came back to town almost immediately and didn’t allow any further increases. Just the opposite, BTC started retracing and dropped down to $22,700.
As anticipation was building up about the upcoming US CPI numbers for July, expected to be lower than the previous month, bitcoin reclaimed some ground and returned to $23,000.
The US indeed announced a lower inflation percentage of 8.5%, which was even less than the predicted one of 8.7%. Being a riskier asset, bitcoin reacted with an immediate price surge to $24,000.
More volatility came a bit later, and BTC jumped to just under $25,000, which became its highest price tag in almost two months. As of now, though, the cryptocurrency trades over $1,000 lower, but its market cap is still well above $450 billion.
ETH Leads the Alts’ Rally
As it typically happens in cases of enhanced volatility, the alternative coins follow suit and even mark even more impressive price fluctuations.
Ethereum, for example, stood around $1,700 but soared by over $200. As a result, it tapped a multi-month high of its own at $1,920 (on Bitstamp). Despite retracing slightly since then, the second-largest crypto is still over 10% up on the day.
Solana is another double-digit gainer, and SOL has touched $45. Impressive price increases also come from Cardano, Polkadot, Avalanche, and MATIC.
BNB, Ripple, Dogecoin, and Shiba Inu are also in the green, although with more modest gains.
Most lower- and mid-cap alternative coins have charted notable increases as well. This means that the cumulative market cap of all crypto assets has added over $70 billion in a day and stands above $1.150 trillion.
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The past couple of days have been very exciting for the entire cryptocurrency industry and Bitcoin is no exception. BTC soared towards $24K today on news of slowing down inflation in the US. The question is if this will be enough for the critical resistance level to finally fall.
The Daily Chart
The 100-day moving average is one of the most crucial levels for Bitcoin; it can be interpreted as a resistance or support line. This is dependent on whether the price is above or below the MA. During the recent significant shakeout, the price dropped once again, falling below this effective moving average. It has now retraced to the broken level at roughly $24K.
If Bitcoin succeeds in surpassing this broken level, a climb to the $30K resistance region will be the most probable scenario on the table. In contrast, another leg down will likely occur if the price fails to break the substantial resistance.
The 4-Hour Chart
Following a bearish expansion decline, the price has formed a well-known classic price action pattern called a wedge. The cryptocurrency strived to break the upper threshold twice yet failed to surpass the wedge’s upper level. The result of that failure is that the price is plunging nominally.
Despite this, a transparent double-top price action pattern – a recognized reversal pattern – can be recognized in Bitcoin’s 4-hour timeframe chart. Considering this, there is potential for Bitcoin to undergo another shakeout to retest the $19K point. If the $19K vital support level fails to hold the price, the next destination will be the $16K mark.
The market seems to be seeking trends, but the big players are remaining stationary. Examining their behavior typically helps identify current trends. This is demonstrated on the following Binary CDD metric(365-day exponential moving average) chart.
Binary Coin Days Destroyed is a binary value that points to ‘1’ if the Supply Adjusted Coin Days Destroyed is larger than the average Supply Adjusted Coin Days Destroyed and points to ‘0’ if not. It exhibits whether long-term holders’ movements are higher or lower than average.
Historically, the metric surged during the bullish rallies and marked a long-term pivot at the end of the bull market. Conversely, it nosedives during bear markets and registers a bottom at the end of the bearish rallies. Currently, the metric has experienced a massive shakeout, indicating that the long-term holders are relatively unmoving. However, considering the prior bear markets, there is still room for the price to decline and reach lower levels.
Therefore, given the market’s present turbulence and uncertainty, as well as the current state of the global economy’s recession, another leg down will be possible before the next bullish rally.
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Following a few days of price increases, bitcoin reversed its trajectory and fell to and below a familiar sight of $23,000.
Most altcoins are also in the red today, including ETH slumping beneath $1,700 after painting a multi-month high north of $1,800.
BTC Back Down to $23K
After the positive end of last month, bitcoin calmed and entered last weekend at around $23,000. The asset failed to produce any significant price movements in either direction in the next two days and remained around that mark.
More volatility, though, came at the start of the current week when bitcoin spiked to and beyond $24,000 to tap a multi-day high. However, that was short-lived and the bears returned to town.
They pushed the cryptocurrency south to just under $23,000 once more. As of now, however, bitcoin has regained some traction and stands at that familiar level but its market cap has declined below $450 billion.
Despite recovering more than 30% since the mid-June drop to $17,500, Mike Novogratz is still uncertain whether BTC will be able to overcome $30,000 in the near-term future.
Amid the bitcoin and crypto bear market, Coinbase reported another quarter deep in the red with losses exceeding $1 billion.
Alts in Red Too
The alternative coins also marked local peaks in the past few days, including ETH, which jumped above $1,800 on hype in regards to the upcoming Merge. That was the asset’s highest price tag in approximately two months.
However, it failed to continue climbing and has dumped below $1,700 following a 5% daily decline.
Solana and Dogecoin are down by up to 6% in a day, while Ripple, Cardano, Shiba Inu, Polkadot, and MATIC have seen more modest declines.
The lower- and mid-cap alts are in no better shape, with APE, FLOW, FIL, and many others decreasing by up to 9-10% in a day.
As such, the crypto market cap has seen over $50 billion gone in the past two days and has returned below $1.1 trillion.
Curve Finance became the latest DeFi protocol to be exploited, and the attacker managed to swipe nearly $600K in crypto.
A recent report claimed that the Merge has attracted institutional investors into ETH products as the positive inflows extended to a seventh consecutive week.
Speaking of the Merge, JPMorgan analysts claimed that it’s one of the two massive industry events that helped crypto stabilize in prices.
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According to the multinational investment bank – JPMorgan Chase & Co. – the main reason for the recent recovery of the cryptocurrency market is the expectation that Ethereum will complete its shift from Proof-of-Work to Proof-of-Stake this year.
Bitcoin is currently up by over 35% compared to its lowest level in June, while Ether has soared by 95%. The total market capitalization back then was around $880 billion, while at the moment of this writing, it’s north of $1.16 trillion.
The Merge Is the ‘Real Driver’
Analysts at JPMorgan believe that the breath of fresh air in the crypto industry has been fueled by two reasons. First, the sector managed to restrict the contagion of failing projects like Terra. In May, the algorithmic stablecoin of the protocol – UST – depegged and slipped way below the target of $1.
The panic caused many investors to sell their UST reserves while Terra’s team started minting more LUNA (the other native token of the project) to cease the freefall. This, however, increased the supply, and the latter’s valuation crashed, too.
The second factor which created some kind of stability in the industry is Ethereum’s Merge, which should occur later in 2022. The analysts think the latest developments around the process have brought back investors’ confidence. The possible transition toward PoS has also created a “floor bottom” for the digital asset prices, while the experts believe the worst of the bear market is over.
“However, we think the real driver has been the Ethereum Merge and positive data following the launch of the Sapolia testnet in early July and Ropsten testnet in June, indicating the merge is viable in 2022.”
At the end of July, Vitalik Buterin – Co-Founder of Ethereum – assured that the Merge testing is 90% complete. Once the shift comes to an end, the blockchain protocol “will be able to process 100,000 transactions per second” compared to the current 15-20, he outlined.
The Merge Could be a Double-Edged Sword
While numerous experts point out the positive outcomes of Ethereum’s shift towards PoS, Mark Cuban warned it could have its downsides. For one, the process could turn out to be a “buy the rumor, sell the news” event, meaning that ETH’s price would go up prior to the Merge prompted by the investors’ enthusiasm, but eventually, it would halt the uptrend and even collapse.
It is worth noting that the move has been delayed numerous times in the past, and it is yet to be seen whether it will actually occur by the end of this year. Assuming it does, it will be the first cryptocurrency protocol to change its consensus algorithm. As such, it can’t be compared to similar past events, meaning that time will show what the aftermath will be.
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The CEO of Galaxy Digital – Mike Novogratz – thinks it is unlikely for bitcoin to push beyond the $30,000 price tag soon. He expects its valuation to hover between $20K and $30K for a while, which could be a good opportunity for investors to increase their exposure.
Bitcoin has been trading below $30,000 for nearly two months now. At one point in June, it even dropped to $17,500, infusing panic and uncertainty in the crypto space. In the past few weeks, though, the asset managed to stabilize itself above the $20K level and currently sits above $23K.
Far Away From the Mania in 2021
Mike Novogratz – top executive of Galaxy Digital and an outspoken supporter of the digital asset industry – is not so optimistic regarding bitcoin’s price in the short term. In a recent interview, he said investors should be grateful if the asset does not drop below $20,000.
“Will Bitcoin get through $30,000 on this move up? We will see – I’m doubtful. I think we’re going to probably be in this range now. I quite frankly would be happy if we’re in a $20,000, $22,000, or $30,000 range for a while.”
The billionaire explained his thesis with the lack of institutional flows into the industry. He thinks the current situation couldn’t be compared to the “mania” in 2021 and 2017 when numerous corporations and prominent companies entered crypto’s ecosystem.
Subsequently, Novogratz gave his two cents on Ethereum and its possible development after switching to Proof-of-Stake. The Merge should give the protocol a significant push and boost Ether’s price above $2,200, he noted.
BTC Needs Time to Recover
Two months ago, Novogratz displayed a rather similar stance, saying the primary cryptocurrency is “here to stay” despite its notorious price swings and unsatisfying current condition. The market, though, needs time to turn bullish and restore confidence among investors.
He further classified BTC, the cryptocurrency sector, and Web3 as “great technologies” and opined that more than 130 million individuals still see the leading digital asset as an appropriate investment tool:
“What happened with lots of great technologies, including Bitcoin, crypto, and Web3, is that prices got ahead of themselves… I don’t think crypto is going away.”
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The Thai-based cryptocurrency exchange – Zipmex – will reportedly enable its customers to partially withdraw some of their Bitcoin and Ether holdings, starting from August 11.
The company was one of the worst-hit entities from the bear market in the past several weeks.
- At the end of July, the platform paused clients’ withdrawals citing volatile market conditions. It also disclosed that it remains unknown when those operations will be restored as the circumstances were beyond the firm’s control.
- A few days later, Zipmex was rumored to have been discussing the problem with numerous organizations, as some have even provided a rescue plan.
- Shortly after, the Thai exchange submitted multiple applications under Section 64 of Singapore’s Insolvency, Restructuring and Dissolution Act 2018. Their goal was to prevent creditors from making any claims for the next six months.
- Despite all the issues, Zipmex has reportedly decided to allow its clients to withdraw some of their BTC and ETH possessions. This will be available between August 11 and August 16, while only Z Wallet owners can hop onboard (around 60% of the company’s customer base).
- Last week, Zipmex eased the withdrawals of several altcoins, too, including Solana (SOL), Ripple’s XRP, and Cardano’s ADA.
- Another Asian-based crypto firm affected by the bear market is Three Arrows Capital. In June, the company failed to meet margin calls due to the collapse of the market. A few weeks later, a court in the British Virgin Islands ordered it into liquidation. According to estimations, the firm owes around $3.5 billion to 27 entities.
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Matt Corallo – a long-time Bitcoin developer and one of Blockstream’s Co-Founders – thinks BTC maximalists are not helping their favorite cryptocurrency by calling all other digital asset protocols “scams.” Instead, those should respect some altcoins because many have significant use-cases.
Over the years, the largest cryptocurrency by market capitalization has amassed numerous individuals as outspoken supporters who believe that BTC is the only digital asset worth discussing and investing in. Such examples are Max Keiser and Michael Saylor.
‘Bitcoin Maxis Are a Dying Breed’
In a series of tweets, Corallo opined that bitcoin maximalists should stay loyal to their dearest digital asset and keep praising its unique nature. However, they should also refrain from attacking all other projects and labeling them as scams. He added that in the last couple of years, money has been flowing to all kinds of protocols as some of them are clearly not pump-and-dump schemes.
1/ Bitcoin maxis are a dying breed. While there was a time where ~everything except Bitcoin was basically a scam, that hasn’t been true for a long time, and the smart money has moved on to figuring out which projects are going somewhere, and which are straight pump-and-dumps.
— Matt Corallo (@TheBlueMatt) August 8, 2022
The adverse stance from bitcoin maxis towards the alternative coins could create a “narrative war.” The one group would claim that Proof-of-Work and BTC are the only meaningful things in the industry, while the other would maintain that PoW is so harmful to the environment that it “boils the ocean.” This hate between the two sides is completely unnecessary and will halt the progress of the crypto sector, Corallo stated.
Despite being the ultimate leader in the crypto universe, bitcoin has lost some of its supremacy in the past few years. In 2017, the capitalization of the primary cryptocurrency encompassed nearly 70% of the total market. Nowadays, though, it represents 41%. The second-largest digital asset protocol – Ethereum – has been gradually catching up and currently makes up about 19% of crypto’s entire market cap.
It is also on its way to shifting from a Proof-of-Work mechanism to Proof-of-Stake. The transition is expected to boost Ethereum’s development by making it less harmful to nature, more scalable, and more secure. It is yet to be seen how BTC maxis will react to such a positive change fueled by the shift from PoW to PoS.
Prominent Bitcoin Maxis
When speaking of people who display their support toward BTC all the time and reject every altcoin, it is worth starting with Max Keiser. The American broadcaster and filmmaker often praises the largest digital asset as the best financial tool that exists. He also supported El Salvador authorities’ decision to make it a legal tender inside its borders.
MicroStrategy’s Executive Chairman – Michael Saylor – is part of that club, too. He believes bitcoin is the best monetary instrument that people could hold. In his view, it is much better than fiat currency and could serve as a successful hedge against inflation during times of economic collapse (like nowadays).
For his part, the author of “The Bitcoin Standard” – Dr. Saifedean Ammous – claims bitcoin is the better version of gold as people do not have to worry about whether the coin has base metal inside it. The asset is also fully transparent, and everybody can see every single transaction. Touching upon inflation, Ammous said:
“Bitcoin is essentially the most powerful defensive technology against inflation. It’s an enormous quantum leap forward in the technology of money as protection of value against inflation. I think it’s a natural fit to anybody who is productive and wants to save their value into the future.”
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Bitcoin’s price finally seems to be breaking the $24K resistance level after a period of rejections. The cryptocurrency has rebounded from the $17K-$20K range. It surpassed the 50-day moving average but has so far been unable to breach the $24K level to the upside.
The Daily Chart
It seems like the significant resistance level of $24K may be breached. The 100-day moving average sitting at the $26K mark would then be the next obstacle. If the price can continue above it, the $30K supply zone would be the short-term target.
On the flip side, if the price fails to break the moving average and drops below the $24K mark, another bearish continuation could begin. This could result in a potential crash below the $20K support.
The 4-Hour Chart
On the 4-hour timeframe, the price managed to break the small bullish flag and rallied towards the $24K mark. However, the larger bearish flag is yet to be broken, as the bulls begin their fourth attempt at the higher boundary of the pattern. A valid breakout above the flag would likely lead to a rally towards the $30K supply zone.
At the same time, the RSI indicator is currently signaling an overbought state. This could result in either a short-term pullback or an overall bearish reversal. If the latter is true, a bearish breakout from the flag and continuation below $20K, and even $15K, would be probable. The lower timeframe price action should be monitored carefully this week to determine which scenario is more likely, and act accordingly.
Bitcoin Net Unrealized Profit/Loss
Bitcoin’s strong downtrend over the last few months has put immense pressure on all market participants. Many investors have sold their coins at massive losses and exited the market, fearing more downturn.
And yet, according to Net Unrealized Profit/Losses metric, the market might be nearing the bottom. This metric measures the ratio of unrealized profits/losses. It is a useful indicator to evaluate market sentiment. The market has felt bleak in recent months, as the NUPL metric was demonstrating values below 0 – a region that has identified previous bottoms.
During the recent increase in price, the NUPL has moved back above 0. This has previously signaled the end of bear markets and the beginning of a new uptrend. It’s important to note that other metrics and the overall macroeconomic picture must also be monitored in the short term to determine whether a new bull market or another bull trap is the case.
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Bitcoin continues to range around $23,000 after another day without any decisive moves in either direction.
The weekend is quite calm for the altcoins as well. Most are slightly in the red on a daily scale, with Avalanche being among the few exceptions.
Bitcoin Consolidation Continues
Last weekend was significantly more volatile for the crypto market. Bitcoin, for instance, jumped above $24,600, which was a six-week high. This price surge was fueled by the US Fed’s latest interest rate hike and President Biden’s refusal to admit that the country had entered into a recession.
However, the bulls’ strength weakened in the following days. BTC dipped below $23,000 on a few occasions, the lowest of which was on August 4 at $22,500.
However, it bounced off and even tried its hand at $24,000 shortly after but failed there. As a result, it retraced back down to $23,000 and spent most of the next few days at that point. This lack of substantial price movements comes amid the lack of high trading volumes.
As such, BTC’s market cap has remained beneath $450 billion, and its dominance is still at 40.4%.
Altcoins Calm, Too
Somewhat unexpectedly, the alternative coins are also quite calm on a daily scale. Ethereum was among the best-performers yesterday with a surge to a multi-week high above $1,700. Now, though, the second-largest crypto is back below that level, following a 2% decline.
Most other larger-cap alts are also with minor daily decreases. Binance Coin, Ripple, Cardano, Solana, Polkadot, and Dogecoin are all in the red now.
Avalanche is the only altcoin in the green. It’s up by almost 3% and sits at $26.
Interestingly, Celsius has gained 6% in a day and over 30% weekly. As a result, CEL trades north of $1.3.
The cumulative market cap of all crypto assets remains calm at just under $1.1 trillion.