Last week, on the Journal du Coin, our weekend crypto point alerted you to a shrinking market. The rather weak altcoins wiped out buyer efforts quite quickly. This bearish bias was not wrong as the market clearly turned red. Wall Street was waiting for the speech of Powell, the chairman of the Federal Reserve of the United States, to give a new dynamic to the market. The market was surprised by the vigor with which the FED wants to fight inflation. Although it could hurt the economy, runaway inflation would only make things worse according to Powell. Thus, the tone is set for the coming months. In this new analysis, let’s see the situation of cryptocurrencies.
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The market returns to its previous range
After losing technical confluence last week, the market has now operated a retest bearish. This downward momentum can be seen during the month of April with a break in the confluence (horizontal level and grouping of EMA/MA). The market is currently re-entering its previous tidy falling below the upper limit at 963 billion dollars. It demonstrates its bearish momentum. The next step is on the range EQ (50% Fibonacci) at $898 billion.
Before that, it is possible to witness a new bearish retest of the short-term EMA confluence (13,25,32). Then, afterwards, the course could move on to EQ. However, if the market is really weak, it is possible to go there without looking for the different EMAs. If this level is not preserved, it is certain that the next step for the market will be the 833-843 billion dollars and the low point of June.
Altcoins continue to turn red…
On altcoins, the dynamic is similar. It is a little more volatile since there is no Bitcoin and Ethereum. You can see that the altcoins got rejected on the EMA confluence and lost a pivot level (blue area). They are moving back to 373 billion, a second technical level that operates as resistance and support. The question is whether this level will give way or not. What to consider is a rebound attempt to retake the blue pivot zone. If the market does not manage to overcome it and does not resume the confluence of EMA 13, 25 and 32 as well as the MA100, we can keep a bearish bias.
In this case, three levels will be monitored:
- The all time high of 2017 at $358 billion
- An unidentified double bottom on the chart that created local support at $340 billion
- The June low at $320 billion.
If the market maintains a bearish momentum, it is highly likely to see the price return to these levels.
A bitcoin that shows no sign of resuming its dominance
Since last week, the situation has changed little. Bitcoin dominance continues to fall and is gradually heading towards our end goal (maybe it won’t be achieved). This final objective (green zone) corresponds to the support since 2021. The latter is in confluence with the low point of May 2018. We can hope for a recovery of Bitcoin on this level after leaving the field open to altcoins for many weeks.
This structural reversal (transition from a downtrend to an uptrend) will probably occur with a resumption of the EMA confluence which is approaching the price as well as the 41.32%. For the moment, we are not there yet. It is quite possible to have a bitcoin dominance that resumes rising sharply leaving altcoins aside as we have seen in the past. So, let’s be on our guard and continue to watch the price during the month of September which is fast approaching.
Ethereum is weak and rubs off on altcoins?
After a powerful bullish run on the ETH/BTC pair, allowing Ethereum to take control of the market for a while, is it time for uncertainty? Is it a simple rebound of the asset or did we witness a false break of the resistance with a return of the bearish momentum? For the moment, we see the rejection that there was on the zone of 0.0768-0.0784 BTC. However, in 3D, the price remains (for the moment) on its EMA13. Just below is the EMA25 and EMA32 as well as the MA100. Will the course go back there?
An ongoing trend reversal on a smaller timescale
On a lower time frame, Ethereum is in big trouble as it is on the verge of losing its confluence of the three EMAs. It would be a first since mid-July. If it fails to break free on the upside, we will have to consider a bearish movement with a strong hold of Bitcoin. In this context, what would be the first level to monitor? In addition to a potential price reaction on the EMA200 (black dotted line), the price will probably return to the blue pivot zone in confluence with the MA100.
During the next few days, do not hesitate to navigate on the different time units to observe the changes in dynamics. Watch especially in 1D, H4 and H1 to avoid going the wrong way for several days.
Shitcoins will go back to the hole?
Finally, to end this crypto point of the weekend, let’s take a look at the FTX Shitcoin Index. It allows, with a small sample of cryptocurrencies, to be exposed to the trend of shitcoins. You can see that recently the price has gone back over $3000 (June’s highs). However, quite quickly, price lost its POC and broke the EMA confluence lower. The index is now in a downtrend and if it wants to go up again, it will have to do the opposite.
If it fails to retake the EMA confluence, the downtrend will continue. Thus, we can have different price targets in view:
- The HVN which is in confluence with the pivot zone of the index and the 50% of the last bearish retracement.
- The second HVN in confluence with the Value Area Low
- The technical level at 1966 dollars
- The low point at 1676 dollars
Here we are at the end of this weekly technical analysis. Remember that the market has turned red in recent days. This likely marks the local top for this bullish rally within the bear market. The situation is complex macroeconomically, which leads you to be cautious about your investments. Watch for key levels identified within this analysis and continue to monitor Ethereum vs. Bitcoin power and dominance.
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