crypto market analysis

Hi Crypto Network,

Bitcoin, born after the previous financial crisis has performed exceedingly well during the current pandemic led economic crisis. In the first half of this year, Bitcoin has outperformed gold, silver, platinum, and most equity markets. This gives more credibility to the nascent asset class, which will attract institutional players who are likely to start investing in Bitcoin.

Crypto Market Analysis

Going forward, the fundamentals of Bitcoin look even stronger because the central banks are moving away from their traditional responsibilities and have become investors in various asset classes. The central bank’s purchases have distorted the free market structure, according to Ray Dalio, the billionaire hedge fund manager and founder and chief investment officer of Bridgewater Associates. Dalio also warned that the dollar might lose its role as the reserve currency of the world.

Last week, the electric car manufacturing company Tesla became the largest company in terms of market capitalization when it surpassed Toyota. However, it is interesting to note that Tesla only manufactures a fraction of cars compared to Toyota still, the markets have boosted Tesla’s price because they expect Tesla to disrupt the fossil fuel run automobile industry.

On similar lines, cryptocurrencies are challenging the current fiat currency system that is controlled by the government and manipulated at will. The huge influx of monetary supply from all the central banks is likely to result in currency wars in the future. Then, investors will search for alternatives and Bitcoin is likely to be on top along with gold. The long-term picture looks strong; hence, we believe that any strong correction is a good buying opportunity for the investors.

How to Trade Bitcoin

Bitcoin has been range-bound between $8,100-$10,079 for the past few months. The attempts by the bears to sink the price below $9,000 levels did not materialise last week as the bulls aggressively purchased at lower levels.

When the bears failed to sustain the price below $9,000, it attracted aggressive bulls. Currently, the buyers are trying to push the price above the moving averages. If they succeed, the BTC to USD pair could rally to $10,079.

The pair will need a major trigger to breakout or breakdown of the range. Until then, this range-bound action is likely to continue.

As the price action inside a range can be volatile, the best trades are when purchases are done at the support, $8,100 in this case, and short positions are initiated at resistance, which is $10,079-$10,500 for this range.

Both moving averages are flat and the RSI is close to the midpoint, which suggests a balance between supply and demand.

The longer the time spent inside this range, the stronger will be the eventual breakout from it. It is difficult to predict the direction of the breakout, hence it is best to wait for the breakout or breakdown to happen before initiating the trade.

How to Trade Ethereum

Ether is stuck in a range between $217.52-$251.46. After staying below the 20-day EMA for the past few days, the biggest altcoin made a sharp move on July 6, which shows strong buying by the bulls.

This up move is likely to face stiff resistance at $251.46.  If the Ether to USD pair turns down from this level, it is likely to extend its stay inside the range for a few more days.

However, if the momentum picks up and the bulls manage to drive the price above $251.46, a new uptrend is likely. This breakout could offer a buying opportunity to the traders because the next target on the upside is $280-$290 resistance zone.

The 20-day EMA remains flat and the RSI is just above the 50 level. Both these indicators do not point to a pick up in momentum yet. Therefore, the possibility of the range-bound action continuing for a few more days is high.

How to Trade XRP

XRP stayed close to the $0.17426 support from June 27 to July 5 but the bears could not take advantage of this and sink the price below the $0.17426-$0.169 support zone. This suggests that selling dried up at lower levels.

The failure of the bears to breakdown below the support attracted buying from the aggressive bulls. They have pushed the price above the 20-day EMA. This relief rally is likely to hit a wall at the downtrend line of the descending triangle.

If the price again turns down from the downtrend line, the bears will make one more attempt to break below the $0.17426-$0.169 support zone. A break below this zone will complete the descending triangle pattern that that has a target objective of $0.11281.

Conversely, if the bulls push the price above the downtrend line of the triangle, it will invalidate the pattern and could result in a rally to $0.20524 and then to $0.23571.

The aggressive bulls can buy on a close (UTC time) above the downtrend line with a close stop-loss. If the XRP to USD pair struggles to rise above $0.20524, the stops can be trailed higher.

How to Trade Bitcoin Cash

We had suggested in our previous analysis to buy the rebound off $200 but Bitcoin Cash did not fall below $215. This shows that sometimes the price action does not behave according to our assumption. When that happens, it is best to leave the trade and wait for the next opportunity to develop.

The BCH to USD pair surged on July 6 and broke out of both moving averages, which suggests aggressive buying by the bulls. The bears are trying to stall this up move at $245, which had previously acted as a stiff resistance.

If the price turns down from the current levels, it might find support at the 20-day EMA and then at $220. A bounce off this support could offer a buying opportunity but if the support cracks, a retest of $200 will be on the cards.

Contrary to this assumption, if the bulls can scale the price above $245, the rally can extend to $260 and above it to $280.

How to Trade Bitcoin SV

Bitcoin SV reversed direction and soared 26.12 % on July 6. This suggests strong buying by the bulls. The up move broke above both moving averages and reached close to the stiff resistance of $200.

The bears are likely to mount a strong defence at the $200 level. If the pullback finds support at the 50-day SMA or the 20-day SMA, it will signal strength.

But if the BSV to USD pair breaks below $170 once again, it will indicate that the current rally was a bull trap.

As the pair has been a huge underperformer in the past few months, we suggest traders wait for the price to bounce off the moving averages before initiating any long positions.

Hopefully, you have enjoyed today’s article. Thanks for reading!

Have a fantastic day!

Live from the Platinum Crypto Trading Floor.

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