Bitcoin Rally In Jeopardy
Your daily Cryptocurrency Market Analysis News brought to you by the CryptoAltum Cryptomenon Team.
This analysis was written at 9:00 am GMT +3, on 31.07.2020
Digital currencies are all over the place, which is great if you’re looking to trade Cryptocurrencies! For assets that should be highly correlated with each other, it would seem that some disagreements and divergence do happen. What exactly are we talking about? Well, the divergence between Bitcoin, which is in consolidation, and Ethereum and Ripple which have decided to rally even higher. With that said, let’s find out what today holds for the digital currencies on July 31st, 2020.
The overnight session saw our Cryptocurrency Trio (Bitcoin, Ethereum, and Ripple) move in divergence from one another, not necessarily in opposite directions, but more in the matter of consolidations and rallies. Bitcoin had been in consolidation for the past couple of days after the impressive rally that it managed to accomplish. However, Ethereum was having none of that and saw it rally that much higher. What happened next? Well, this emboldened Ripple, which moved alongside Ethereum. So, the question on trader’s minds must be whether Bitcoin’s rally is a bit of delay or whether Ether and Ripple will succumb to the pressure of their older brother and find themselves consolidating.
Bitcoin (check out the chart below you’ll find that Bitcoin is the purple line) has managed to hold on to the gains that it has created reaching a 21.02% performance on a month-on-month* basis. Ethereum (red line), continues to rally higher increasing its performance to 47.63% on a month-on-month basis. Ripple (orange line) joined Ether’s move and rallied higher gaining a 39.02% performance on a month-on-month basis, maintaining the second position ahead of Bitcoin.
- Please note that we mention month-on-month we mean the same day, one month ago. For example, 29th of June till 29th of July.
What’s the strategy you’re going to use when it comes to these cryptos? Do you think that BTC will rally higher joining ETH and XRP? Or will ETH and XRP succumb to the pressure and consolidate as well? Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin Rally In Jeopardy
Bitcoin price is holding above $11,000, however, it has a bearish inclination in the short term. The trading on Thursday saw buyers revive the bullish momentum upwards but hit a wall at $11,200, from there, a reversal took place forcing the digital asset to fall back towards $11,000. Furthermore, the price has already fallen below the key ascending trendline support. What does that mean? It means that there is an increase in bearish pressure in the Bitcoin market.
To further complicate things, selling pressure is mounting on this asset. This can be seen through the RSI which has reached the 60-level indicating that the momentum higher is in fact losing speed. This is evident as the price action has stagnated, posting stable highs at the $11,400, while increasing the pressure downwards, which is evident by BTC repeatedly breaking below the $10,900 support.
The latter level has been the important support for Bitcoin, and breaking and closing a candle below it would definitely signal for the Bears that it’s open season on the digital asset, forcing BTC to finally succumb to the pressures and move it lower. For now, it is clear that keeping Bitcoin above $11,000 is not without difficulty. Perhaps, should this Cryptocurrency rally past $12,000, that would call for more volume to catapult it above $14,000.
Ethereum Celebrates 5-years
Happy birthday Ethereum! 5 years and counting! How does Ether celebrate it? By posting an impressive rally all the way to $340 forming a yearly high. The attention received from the cryptocurrency community saw ETH test the previous year highs and break through them. The previous 2020 high was $334, to which Ethereum simply said ‘Nope!’ and went higher to form a new yearly high at $342.40.
In the meantime, Ethereum is trading at $333 after testing the initial support at $330, making it quite clear that gains back to the yearly high will not come as easy as they once did. This shows that bearish pressure might be indeed mounting for the digital currency as we notice the RSI and price action diverging.
Recently, Ethereum confirmed a support at $305 before rising to new yearly highs. If the support at $330 holds its position, we can expect Ether to rise above $340 and even bring down the hurdle at $350. This will draw the cryptocurrency very close to breaking 2019’s high, which was $361, while focusing on $400. On the other hand, losses under $330 would seek refuge first at $320. Although that level failed to hold earlier this week, meaning more support is anticipated at $310 and $300 respectively.
The divergence between the RSI and price action of ETH must be addressed too. The recent move higher did produce a new high, however the move in the price action failed to translate into the same move in the RSI, which barely failed to break above the 70 level. The CryptoAltum Analysis Team is expecting a big correction to come from this move, and ETH might be in for a big move lower. Could this be a good shorting opportunity?
Ripple Fails at $0.2500, Twice
Ripple has been performing incredibly well this week. For the first time since February, this cryptocurrency traded at $0.25. This was a significant improvement owing to the fact that XRP plummeted to $0.11 in March amid a global market crash. The resistance zone at $0.25 has been tested twice without success, and this is increasing Bulls’ fears that the Bears might be looking to drive the price lower again.
XRP is holding the ground at $0.2440 after hitting the barrier at $0.25, however the downside seems to be supported by the 50 Simple Moving Average (SMA) in the 1-hour range. But all is not entirely well for the Bulls. Why? There seems to be an increase in selling activities and it’s more than likely that Ripple is going to retest the support at $0.24.
The technical picture is mainly bearish as highlighted by the Relative Strength Index (RSI). There’s divergence between the price action, which has been posting higher highs and moving in a general upward trend. We then see that the RSI has moved in the opposite direction after failing to break the $0.2500 the first time around. This double top on the price action and the divergence on RSI is leading our analysts to think that the Bears are in control of this market and it’s only a matter of time before we see a steep correction happening.
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