Cardano Becomes Third Biggest Crypto by Market Cap – Analysis, 23 Aug
This past week the crypto market recorded high demand for the tokens of the platforms for smart contracts such as Ethereum, Cardano, Polkadot, Solana, Avalanche, etc. The best performers were Solana and Cardano. Cardano has even become the third biggest cryptocurrency by market cap, recently surpassing Binance Coin. Cardano's price success can be attributed to the expected integration of the long-awaited protocol upgrade called Alonzo. This upgrade is due to take place in September and bring DeFi, NFTs, and more to Cardano's ecosystem:
However, some well-known cryptocurrency investors remain skeptical about Cardano's future. Galaxy Digital CEO Mike Novogratz doubts the potential success of Cardano:
Another big thing that has started to attract attention in the crypto space is the hype in the NFT gaming sector. The prices and number of users of the NFT games have begun skyrocketing. According to CryptoDiffer, the top NFT games by active users are Alien Worlds, CryptoBlades, Splinterlands, etc. :
One of the fundamental features of these blockchain-based games is that they fit into the category 'Play-To-Earn', which means that players earn cryptocurrency by playing the game. Many experts already expect the 'Play-To-Earn' blockchain-based gaming model to disrupt the traditional gaming industry.
After another positive week for the cryptocurrencies, the Monday market starts with a decent price increase. According to Coin360.com, one Bitcoin costs €42,845.27 (+2.17%), one Ethereum – €2,841.26 (+2.20%), one DOGE – €0.2699 (+0.45%), and one UNI – €24.98 (+0.75%):
Source: Coin360.com (Daily crypto market performance)
Now, let us analyze the price charts of the leading cryptocurrencies against the euro in the noteworthy time frames.
In the weekly time frame (1W), BTC/EUR has recorded a fifth consecutive bullish candlestick with a local low above the previous one and a local high above the previous one:
The continuation of the sequence of bullish weekly candlesticks confirms the return of the bullish sentiment and increases the chances of uptrend renewal.
Nevertheless, in the daily chart (1D), it is worth keeping an eye on the price behavior of Bitcoin while at the potential resistance line:
If there is a breakout, we expect BTC/EUR to reach the level of the previous local high or approximately €54,000 - scenario 1 (S1). However, if BTC/EUR cannot overcome the potential resistance, the price chart may resume the decline within the potential Descending channel - scenario 2 (S2).
In the weekly chart (1W) of ETH/EUR, the sequence of the bullish candlesticks with ascending local highs and ascending local lows has been interrupted. This past week a Hanging Man candlestick formed:
The Hanging Man indicates that the market is entering a period of indecision, and the price of Ethereum may start to consolidate. What is more, according to the technical analysis theory, a Hanging Man candlestick occurs during an uptrend and warns that prices may start falling. That's why we should also not exclude a price pullback soon.
In the daily chart (1D), we will try to figure out where the closest support is in case of a pullback. For this, we will apply the Fibonacci retracement levels:
As can be seen from the chart, right now, ETH/EUR is consolidating at the 61.7 Fibonacci retracement level. That is why we consider the 50.0 Fibonacci retracement level (or €2,532) as the closest support for the price in case of a pullback. And the 76.4 Fibonacci retracement level (or €3,163) is the nearest price target in case of a price increase.
In the weekly chart (1W), DOGE/EUR has formed a solid bullish candlestick with a local low above the previous one and a local high above the previous one as well:
This bullish candlestick hints at the return of the bullish sentiment. Moreover, in the daily chart (1D), the 30-day Moving Average (MA 30) is about to cross and surpass the 90-day Moving Average (MA 90). That is a bullish Moving Average Crossover:
In our view, if the bullish Moving Average Crossover happens, this will be an additional solid bullish signal confirming the change of sentiment and will mark the end of the correction.
As we already outlined in our previous analysis, in the 4-hour chart (4H), UNI/EUR has formed a Double Bottom (common trend reversal pattern):
That is why we continue to stick to our trading strategy: if a pullback takes place and the price drops to the neckline of the Double Bottom, we will wait for a rebound from the neckline to open a long position.
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