More Bearish Pressure in the Market

News • 2021/07/17 • by

Bitcoin / US Dollar

As the price is hitting lower and lower levels, we need to take a step back to examine previous situations in the chart, which will help us to understand better what is going on in the market and what is expected to happen in the next days or weeks. Bitcoin’s price is dropping, even more, holding around $31,500, while the major support level at $30,000 continues to be the main barrier for a bearish trend to continue.

The $30,000 point was the starting point at the start of the year 2021, and many analysts have told back then that Bitcoin will stop raising and continue to move around those price levels. As the market proved them wrong, the scenario of $30,000 stable point is coming back again. We have to remember that, once Bitcoin broke the $30,000 resistance level, had heavy fluctuations above it, creating the $36,000 average and touching the $30,000 many times before managing to escape it and move above the $40,000 price level.

A similar scenario could be replicated in today’s situation. Bitcoin could continue to move above the $30,000 level with more volatility on the trading floor, creating another massive bottom for fueling the next bullish cycle. At this point, we need to highlight that the majority of institutional investors have entered the market above the $30,000 point. This means that large wallets will be willing to support their investment and won’t let it slip into lower levels as they need to afford larger amounts for their recovery.

We expect the price to find more resistance in the $30,000 support level, bringing a spark of change in the market situation. The trading volumes have remained at lower levels while the moving averages are on the same spot, with negative positions against each other.

In the short-term diagram, we can observe that the market is descending steadily, pushing the market into a deeper bearish movement. As expected the compression trend between $36,000 and $30,000 will move into another level in the next period and we will wait to confirm what the direction will be.

Indicators

MACD index passed on the negative side, indicating that there is now negative momentum in the market, which will affect the next period for the price development. The RSI index dropped below value = 40, indicating that a bearish turn is possible at this time also.

Ethereum / US Dollar

Ethereum seems to be in a better position than Bitcoin, as its drop to $1,860 has not touched yet the local bottom, founded at $1,750. We should also recognize that the $1,750 wasn’t only the local bottom for Ethereum in the previous period but also was the compression point in the previous period, before the bullish explosion.

As we did in the Bitcoin analysis part, we need to take a step back and examine the previous period for Ethereum also. Ethereum had experienced a similar increase during 2020 and some analysts have claimed that the $1,000 point will be the top for the cryptocurrency. Again, they were proved wrong and Ethereum jumped above $4,000 in less than 4 months.

During the first months of 2021, Ethereum had experienced several volatile events, leading to an extended ranging period with constant price changes. This scenario could replicate in this situation also, bringing Ethereum to an extended period between $1,200 and $2,000, trying to escape from this zone.

The trading volumes have been sustained on the same levels as in the previous month while the moving averages had crossed each other at bearish positioning and stayed in that for now.

Indicators

MACD index is diving even more in the negative area, indicating that the market will add more negativity in the next days. The RSI index moved to values below value = 40, showing that there is probably more downtrend in the short-term future.

Ripple / US Dollar

Ripple is moving slower in the bearish adaptation for the trend, reaching $0.57 and heading for the next bearish target, which lays between $0.55 and $0.50. The zone between $0.50 and $0.55 can be described as the first resistance point for the bullish explosion.

After passing the $0.55 point, Ripple’s price was skyrocketed to $1.00, bringing more investors into the market and attracting more capital. If the support levels continued to sustain a strong position, we believe that the market will try and recover at higher levels than before. This will become possible if the entire market moves in a bullish turn and start to grow positions again on new ground.
The trading volumes have shrunk at the lowest possible level during the last year while the moving averages are positioned at negative formation, indicating that the bearish feeling will continue to exist.

Indicators

MACD index has not passed yet in the negative area, confirming that the market is moving slowly and tries to sustain any high level that it could. The RSI index has moved to value = 35, indicating that the market will continue to correct for more.

Litecoin / US Dollar

Litecoin touched the major support level at this phase, at $120, indicating that any move from this point and below it, will mark a further downtrend into lower price levels. Those price levels If the price dropped below the $120 point, the market will vanish any progress done during 2021.

We expect that the price will move according to the market dynamics but we should expect a further downtrend in the next weeks until more influential coins like Bitcoin and Ethereum will start to rebound and establish at higher price levels.

Litecoin and Bitcoin Cash remain as crypto-assets with lower influence in the market and their moves are correlated with each other. The trading volumes have remained at the lower possible level regarding the previous period. The moving averages crossed each other, forming a reverse “Golden Cross”, indicating that the market will probably dive deeper into the bearish trend.

Indicators

MACD index passed in the negative zone, showing that the market will add negative momentum in the price formation from now on. The RSI index has almost touched value = 30, indicating that the market has almost reached a local bottom and will be considered undervalued in the short-term period.

Bitcoin Cash / US Dollar

The same situation can be described in the Bitcoin Cash market as the market is trying to return at previous levels before 2021. The price moved around $430, a compression point that was evident around March 2021 and appeared as a top point at the start of the year.

There are no expectations for Bitcoin Cash to turn up, at this moment as the coin has no clear support or resistance levels around those price levels, indicating that there might be heavy fluctuations in the zone between the next trends.

The trading volumes have been diminished into the lower possible levels for the previous year while the moving averages cross each other, forming a reverse “Golden Cross” that describes an upcoming bearish trend.

Indicators

MACD index moved in the negative zone, proving that the price will add more negativity in the price formation process. The RSI index moved to value = 30, indicating that a potential bottom is near for the coin.

Correlations

Bitcoin / Ethereum = 0.82 (+ 0.09), Bitcoin / Ripple = 0.94 (+ 0.06), Bitcoin / Litecoin = 0.96 (+ 0.06), Bitcoin / Bitcoin Cash = 0.94 (+ 0.07)
As the market becomes more integrated and all the cryptos have followed Bitcoin in the descending move, the correlation field seems to be on the same side. Every major altcoin (Ethereum, Ripple, Litecoin, and Bitcoin Cash) have made a strong connection with Bitcoin, allowing it to affect heavily on the price development process. It is a common scenario to see, especially in a bearish period, that altcoins overreact to Bitcoin’s moves while the opposite scenario (during a bullish period) looks rarer. The correlation field will start to unbundle, once Bitcoin will find a local bottom and start to rise first, affecting the rest of the market to follow it.