Yet Another Week of Crypto Market Consolidation – Analysis, 5 July
The crypto market has recorded another week of consolidation. Recently, most of the major cryptocurrencies have been trading in a very narrow range, struggling to find direction. For example, Bitcoin has been fluctuating between $30,000 and $38,000 for almost 5 weeks now. It is clear that sooner or later, this consolidation will end. But the question is in which direction BTC will continue its journey once it exits this range in the second half of the year.
A recent CNBC poll shows that 44% of institutional investment managers believe that the crypto market will remain flat in the second half of 2021, and Bitcoin will close the year with a price below $30,000.
Nevertheless, 25% of the respondents believe that Bitcoin will close the year at approximately $40,000. A similar percentage of respondents think the price of BTC will be $50,000, and only 6% predict that the cryptocurrency will hit $60,000 at the end of the year.
In a recent ‘What Bitcoin Did’ podcast, Willy Woo, a well-known Bitcoin analyst, stated that because of the recent correction, BTC has not entered a bear market. The expert clarified that the correction had been a short-term speculative phase. Woo thinks that during this period, most of the coins went from the ‘weak hands’ to the hodlers. That is why, in his view, Bitcoin is starting to recover and is ready to renew the uptrend.
Other crypto enthusiasts are even more positive and bullish on Bitcoin. Alex Mashinsky, head of the Celsius Network, shared with Cointelegraph that the recent all-time high of approximately $64,000-$65,000 is not the BTC top for 2021. The crypto bull expects the cryptocurrency to reach $160,000 by the end of the year.
However, the most positive prediction on Bitcoin came from Hashcash inventor Adam Back. He envisages that “all fiat is going to zero’’. And, this means that Bitcoin has no top and is going to infinity:
After another week of consolidation, the Monday market starts with a small price correction. According to Coin360.com, one Bitcoin costs €28,929.72 (-3.02%), one Ethereum – €1,921.57 (-1.77%), one DOGE – €0.2012 (-3.73%), and one UNI – €17.12 (-0.07%):
Source: Coin360.com (Daily crypto market performance)
Now let us look at the price charts of the leading cryptocurrencies against the euro in the most noteworthy time frames.
In the weekly chart (1W), BTC/EUR formed a Spinning Top candlestick after the Hammer from the previous week:
This candlestick pattern represents indecision about the future direction of the price. That is why the most likely scenario is the consolidation to continue.
We think that BTC/EUR will remain range-bound between the 360-day Moving Average (MA 360) and 30-day Moving Average (MA 30).
Right now, MA 360 is at the level of €25,255, and MA 30 - at €29,522. We consider the first level as key support for Bitcoin and the second one - as temporary resistance.
In the weekly chart (1W), ETH/EUR has formed a Bullish Engulfing:
According to the Technical Analysis theory, the Bullish Engulfing is a popular trend reversal signal, occurring at the bottom of a correction. That is why the chances that ETH/EUR will try to return into the Ascending channel in the daily chart are increasing:
As can be seen from the chart, right now, ETH/EUR is testing the lower line of the channel. If the price surpasses this line, some aggressive traders will start opening long positions.
In the 4-hour chart (4H), DOGE/EUR is consolidating at the resistance line:
At the moment, there is neither a bullish signal indicating that Dogecoin will try to break through the resistance and resume the price increase nor a bearish signal indicating that the price of the cryptocurrency will continue to slide down, receiving pressure from the resistance line. That is why we will remain in a ‘wait-and-see’ position.
In the weekly chart (1W), UNI/EUR has formed a candlestick formation similar to Bullish Engulfing that increases the chances for a price rebound:
The 4-hour chart (4H) confirms the potential price rebound as well – DOGE/EUR is trying to break through the resistance line:
Some very aggressive traders are probably opening long positions. However, these positions are risky – the support at €11.45 is significantly below the current price level of €17.17. That is why these positions should be small.
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The analysis is purely informational and does not constitute investment, financial, trading, or any other sort of advice and you should not treat any of Bitvalex's content as such. Bitvalex does not recommend that any cryptocurrency should be bought, sold, or held by you. You are solely responsible to conduct your own due diligence and consult an advisor before making any investment decisions.