Last week in the news
China`s further ban on crypto mining made a significant impact on the crypto market during the previous week. Bitcoin finished week testing long term support at $30K, while Ethereum has broken psychological level at $2K.
Previous week started with some negative news for the crypto market which made an impact on the price sharp drop on Monday. News was related to China`s further restrictions on crypto currencies use and its mining. The People's Bank of China urged Alipay and banks to restrict use of crypto currencies for trading. On the other hand, authorities have made a ban on bitcoin mining in regions of Sichuan, after making a previous ban in the Yunnan region. As news are reporting, some 90% of mining activities were by now shut down in China. The market reaction was immediate selloff of crypto currencies. On this news Bitcoin made a short dip down to $28K. Although the official reason for such a move provided by the government in China is to prevent high consumption of energy in its effort to become a more “greener” country, there are analysts who are expressing the opinion that this banning is aimed to protect digital yuan, which China is planning to officially introduce in the close future. On the other side, there are those who argue that with China's ban, the mining of crypto currencies will become cheaper and in this way, more profitable business for other regions in the world, like North America.
In line with the latest developments on the crypto market, analysts are questioning if the Bitcoin dip is over with this move, or is it still to come. Analysts from JPMorgan still have bearish views on Bitcoin, relying on the fact that there is still not much interest from investors to buy on a dip. Similar opinion has also Scott Minerd, who thinks that Bitcoin has not reached its bottom price in this downturn. Anyway, Elon Musk and Jack Dorsey, CEO of Square Inc. have agreed to have a discussion about Bitcoin in an event called The B Word which will take place on July 21st. Considering the influence of previous Musk`s tweets on the crypto market, higher volatility should be certainly expected on this day.
Columbia is another country to welcome investments in blockchain companies. It's capital city, Bogota, prepared a program by which it will invest some 750 thousand U.S. dollar equivalent in local currency into 100 companies to implement blockchain technology through their businesses. This is part of overall $2.8 million investment of Bogota`s Innovation, Technology and Creative Industries Fund with aim to support Bogota`s smart city initiative.
El Salvador is moving forward with its recently adopted Law on Bitcoin, making it a legal tender in the country. It has announced that each citizen who opens a Chivo e-wallet and verify it using facial recognition will automatically receive a $30 worth of Bitcoin on his or her wallet. It has been also announced that the Law on Bitcoin would become effective as of September 7th .
Reported figures on the U.S. personal consumption expenditures of 3.4% and core PCE of 3.9% supported FED`s assumptions on transitory inflation in the U.S..As investors turned to more risky assets, equities gained significantly during previous week. S&P gained 2.7% on a weekly basis, while other major US indices also finished the week in green.
Crypto market cap
Negative news related to China`s further ban of crypto mining and trading at the beginning of previous week, hit the crypto market negatively. Total crypto market capitalization was standing at $1.26 trillion as of the end of the week, which is a drop of $224 billion or more than 15% on a weekly basis. Daily volumes of trades were also modestly increased, reaching $260B on Monday, decreasing slowly during the week down to $170B. During last week`s downturn, all crypto currencies ended the week in red, with Bitcoin, Ethereum Classic and Binance Coin leading in drop of market capitalization. Total inflow from the beginning of this year currently stands at $464 billion, which is an increase of 58% in relative terms.
Previous week the crypto market finished in a red zone. All coins lost some value in market capitalization. Bitcoin was leading the drop with a loss of some $76B or 11%. BTC was followed by Ethereum who lost $50B in market cap or 19%, and Binance Coin whose market cap was down by $10B or 20%. Other altcoins who lost 30% of value were NEO, Theta and Monero, while the majority of other coins were moving some 20% or less on the downside.
The table below provides most recent information regarding market cap and circulating supply for most popular crypto currencies.
Bitcoin: investors are still not on a buying side?
China`s further ban on crypto mining made a significant impact on the price of Bitcoin on Monday. BTC started a week at $35K resistance, but soon went down to $31K as news was published. Tuesday was also a critical day for BTC, as the coin went further down to the level of $28,8K. As the market calmed down, BTC reverted back to its previous levels up to the resistance line at $35K, but ended the week around $30K support line.
Some analysts are noting that investors are still not buying on a BTC`s dip. This implies in conclusion that investors are anticipating that BTC has still not reached its bottom line in this down-cycle. Since this market is heavily dependent on fundamentals, there might be investors waiting for major breakthrough information which would finally provide sustainability for the upside for BTC and other altcoins. Certainly, it is worth mentioning that Elon Musk - Jack Dorsey will have an open discussion on Bitcoin on July 21st . Further crypto market volatility on this day is to be expected.
On the other side, fundamental analysis is currently putting into the spotlight support line at $30K. This is also a level where 0.236 FIBO stands. On the other hand, RSI is currently modestly below 40, which might provide some space on the downside until a clear oversold market is reached. In case that market continue to be on a bearish side, than break of $30K line would lead BTC to next short term support line at $25K. On the opposite side, significant resistance line stands at $35K. If broken, then next line to watch is $40K, but it is worth noting that such move needs to be supported with strong fundamentals.
Ether: close to oversold market
For several weeks, Ethereum was holding strongly to $2.1K support line, but during previous week and negative news, ETH managed to break psychological level at $2K and finish week trading above $1.750. During its downturn ETH managed to touch the support line at $1.700, but soon reverted back.
Since the psychological level of $2K is broken on the downside, a certain sign of ETH recovery will be a break of this level on the upside. However, the current chart shows that ETH has tested its support line at $1.700 during the previous week. Good news is that there has not been market strength to break this level on downside, which implies that coin will revert to resistance level at $1.850, before it make its move up to $2K. Since RSI is very close to oversold zone, it might be expected some pressure on downside and $1.700 support line during next short term period. In case that this support line is broken on downside, then the next target of ETH might be $1.520.
Ripple: $0.5 still to be tested?
A road to downside for Ripple continued also during the previous week. XRP started a week at $0.7 support line, broke the next important level at $0.65 and finished a week modestly above short term support at $0.5. This line has been tested two times during the previous week, but without market strength to go below this level.
However, charts are suggesting that there is probability for $0.5 support line to be tested again before final reversal to the up side. RSI is moving modestly above 30, suggesting that the oversold market might be reached soon. In case that $0.5 support is broken, the next level which would be in the spotlight is $0.45 down to $0.40. In case that at level of $0.5 oversold market is reached, then XRP will revert to the upside and test resistance line at $0.65, up to $0.7.
What’s in store for altcoins
Bitcoin Cash (BCH) started the previous week with a clear break of $540 support line. On the next day the coin shortly went down to $380, but quickly reverted back to $480. It is currently trading around $440 level and testing its resistance level at $450. As per current charts, there is a probability for the support line at $380 to be tested again in case that current level at $450 is not broken on the upside. However, a break of the current resistance on the upside, will lead BCH to the next target at $540.
During the previous week Litecoin made its move from $160 support, all the way down to $100. This level has been reached in one short occasion, after the coin reverted back to levels above $120. Short term support line stands at $110 which has been tested twice during previous week, and coin is on the road to test it once again during next short period of time, chart suggests. In case that this level is broken on downside, coin would seek to test long term support line at $95. However, if current level holds up, then LTC would revert back to $140 resistance.
Binance coin (BNB) was one of three mostly traded currencies during the previous week, and followed general market trend on downside. During Monday and Tuesday BNB was traded from $340 down to $220. However, the coin reverted a bit and ended a week trading around $270, actually testing the support line at $250. In case that pressure on the downside prevails during next week, BNB might head to test support at $200, before its final reversal to the upside. In the opposite case, the level to watch is $300.
Dash (DSH) 's contribution to the bearish market during the previous week was a move from $155 down to $100. After reaching this level, the coin went back above the $120 support line. In case that DSH breaks current support, coin will probably move back to $100 once again as short term support. Next support from this level stands at $85, which is a long term support line for this coin. In case that market does not have strength to go further down, then the coin will revert to the upside, and resistance at $140.
EOS started a week at $4.5 and made its way all the way down to $3.0. It modestly reverted back to the resistance line at $4.0 but ended week trading around level of $3.5 where long term support line stands. Support at $3.5 is tested on the downside. In case that it is broken, the coin will head toward next support at $2.5 which is another long term important line for this coin. On the opposite side levels to watch are $3.5 as current resistance up to $4.0.
IOTA made its move during the previous week from levels of $0.97 down to $0.6. In quite a short reversal, the coin moved up to $0.85 level, but soon went back to the downside and to the support line at $0.75, where it is currently traded. Charts show that there is modest pressure on the down side. In case that current support line is broken, the next important level for this coin stands at $0.65 all the way down to $0.5 which is long term support line. On the opposite side, a move above $0.75 would lead the coin to resistance at $1.0.
In line with general market trend, NEO`s range of the week was between levels of $44.6 down to $26.3. Although NEO made a modest move back to $35 level, it still ended a week below it. Long term support line for NEO stands at $30, which is level probably to be tested once again in a next short term period of time. In case that it is broken, then the next long term support line to watch is $20. On the opposite side, the next resistance line is at $40.
Although Monero (XMR) started the week at $260, it soon made a sharp move to the downside and reached level of $180. Support line for this coin stands at $170 which might be tested in the coming days. In case that coin reverts back to the upside, then the level which will be tested is $200 up to $230.
Disclaimer: This article provides exclusive views of the author. It does not in any sense represent a suggestion for trading.
This Market Analysis has been published by a staff writer at XBTFX.
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