Bearish Traps Continue to Concern Investors

News • 2021/07/13 • by

Bitcoin / US Dollar

Bitcoin’s price didn’t manage to reach the compression point around $36,000, and the correction was inevitable. The price dropped to $32,500 without breaking the current lower levels, around $32,000. The Bitcoin market is moving towards another compression trend, which focuses more on the lower side of the general compression trend.
In the big picture, we can observe that the price is moving between $40,000 and $32,000, following a bearish pattern. This move can be described better if we observe that the compression trend is moving around an average price of $36,000. This point serves as the “return to the average” level when the trend continues to exist. Since the last month, the price has moved a step below regarding its development.

This means that the price is constantly traded below the $36,000 point, forming another compression trend, between $36,000 and $32,000. As we have highlighted in previous articles, every compression trend is followed by a breakout. At this moment, the breakout is highly possible to occur. The bullish outlook will bring the price above the $36,000 compression line, breaking the first compression, while a jump above the $40,000 line would mean that the compression trend is over.

We expect that a short-term breakout would be possible if there is enough market consolidation to attract bullish investors around it. The trading volumes have remained at low levels while the moving averages have crossed each other a couple of times, creating misleading signals about the next moves for the price.

In the short-term diagram, we can observe that we are currently on a bearish path that could end up in the $32,000 support level and test it again. If the price holds before reaching this level, we might expect a quicker recovery from Bitcoin’s side.

Indicators

MACD index remained on the positive side but continues to drop. This means that the lack of momentum will transform the market into a full bearish situation with fewer options for recovery. The RSI index remained between values 40 and 45, indicating stability in the price and a negative outlook.

Ethereum / US Dollar

The negativity in the crypto market became evident in the Ethereum space also. The price broke the $2,000 level and landed around $1,950. The break of the psychological and support level of $2,000 was not a good signal for the market, but there is still hope.

The current support level that was established during the last trend lays around $1,850. As we can observe from the mid-term view of the price chart, the space between $1,750 and $2,500 was evolutionary for Ethereum and could become easily used for bullish and bearish trends.

The Ethereum market has not fallen into a compression trend like Bitcoin’s one, but it moves with larger fluctuations, trying to establish a certain path for the next trend. Establishing a point around $2,000 and not going below it will bring more bullish options in the game, along with a potential climb up to $2,500.

The trading volumes have continued to remain at low levels, and the moving averages are about to cross again, creating a bearish signal for the market.

Indicators

MACD index passed on the negative side, showing that the momentum in the market has passed on the other side, creating fewer options for recovery. The RSI index moved to value = 40, which shows relative stability for the price with a negative outlook.

Ripple / US Dollar

As the most dominant coins in the market make corrective moves, the less powerful and influential move in a stable trend, creating more compression in the market and making investors wait for the next big move.

The situation in the Ripple market can be described as above. Still, we should be optimistic because the price has not dropped at previous levels, sustaining a certain level of normality in the price formation. The price has remained around $0.60, which is in the middle of two important price levels.

The first point lays at $1.00, which was the entrance point for the major bullish wave in the market, while the second point lays around $0.25 and $0.30, which was the lower support level during 2020. Those points can mark that the market has found a certain balance between bulls and bears and wait for the next steps from larger coins.

The trading volumes have moved in the lowest possible point during the year while the moving averages crossed each other two times during the last week, forming conflicting signals for the investing community. This is something common to happen when the market remains stagnant for a lot of time.

Indicators

MACD index has moved near value = 0, indicating that the market will remain on the same spot for the next period. In contrast, the RSI index moved below value = 40, indicating that we might observe another correction in the market.

Litecoin / US Dollar

As stability remains the main trend in the altcoins space, Litecoin is making small corrective moves. The price landed at $125 without touching yet the $120 support level. Like Bitcoin, we can observe that the market has followed a compression trend with two steps.

The first step lays on the upper side, around the $175 point. The second part for the compression trend lays at lower levels, around the $130 point. Those two points could be the start of the recovery process when larger and more influential coins in the market find a new way to increase their profitability. A first step for the bullish recovery would be the pass on the upper side of the compression trend before breaking the $200 point and establish another bullish version.

The trading volumes are moving to the lower level. At the same time, the moving averages crossed again, forming this time a reverse “Golden Cross,” which indicates another bearish move in the short-term future.

Indicators

MACD index has remained on the positive side, bringing less momentum in the price formation while the RSI index moved below value = 40, establishing a more bearish outlook for the future,

Bitcoin Cash / US Dollar

Bitcoin Cash’s price is moving on the lower possible level for the current trend position. The price is moving around $460 - $470, when the lower point lays at $450. The current correction has vanished all the profits from the previous bullish trend. A return in the previous resistance level around $700 could become the start for another bullish round in the future.
Having lost around 70 % of the total value since the 2021 high level at $1,550, Bitcoin Cash will need something strong to move in previous bullish positions. Small steps like bringing back the $550 level would benefit the market and its development.

The trading volumes have plummeted, even more, showing that investors have lost interest in the market while the moving averages crossed each other again, forming a reverse “Golden Cross.” The stability in the market has made the moving averages stay on the same level, creating several fake signals.

Indicators

MACD index has moved to positive values, proving that the market might work with reduced momentum and the RSI index moved below value = 40, proving that the bears are taking up the market.

Correlations

Bitcoin / Ethereum = 0.73 (- 0.11), Bitcoin / Ripple = 0.88 (- 0.03), Bitcoin / Litecoin = 0.90 (- 0.03), Bitcoin / Bitcoin Cash = 0.87 (- 0.06)
Since last week, the correlation field has changed as Bitcoin and Ethereum have made small corrections in the price formation process, a fact that affects their relationship with other coins. The largest defection was evident from Ethereum, whose correlation has fallen to the medium correlation zone, showing that any potential uptrend moves from this point and on will not be equal to the Bitcoin’s market. On the other hand, the other three coins (Ripple, Litecoin, and Bitcoin Cash) have sustained their strong correlation with Bitcoin, due to their inactive standing, during the last weeks. It seems that the market is waiting for something to trigger it.