Has the Summer Recovery Started?

News • 2021/07/23 • by

Bitcoin / US Dollar

After breaking the psychological support level at $30,000, Bitcoin’s price has started to recover, showing investors that the asset has been oversold. The price jumped above $32,000, and now, the race for breaking the compression zone is back again.

As we have stated several times during the last month, the compression zone between $40,000 and $32,000 is divided into the upper and the lower part. The lower part between $32,000 and $36,000 was described as the preamble of another bearish correction, leading to lower prices, even below the $30,000 line.

The recovery passes from the $36,000 average compression point, which will pass from the bearish to bullish perspective. Of course, Bitcoin has taken the path on the way up, and there is a slight possibility to see another bullish trend to get established between the $36,000 and $40,000 zone. For understanding if the current recovery could lead to another bullish round, we must follow the trading volumes and the news about new positioning from institutional investors.

The technical analysis could help us to discover ways to enter or exit the market. As marked from the support level at $30,000, now there is a good time to estimate the end of the bearish cycle and a potential start for another bullish one.

The trading volumes have made small progress, but there would need more volume to establish a bullish trend. According to the current momentum, the moving averages remain close to each other, sustaining a bearish perspective that might change in the next few days.

In the short-term diagram, we can observe that the market stopped at the $30,000 support level, establishing a stronger position for future use and reference. We expect a recovery trend to start when many institutional investors enter the market and create more market depth to absorb negative moves.

Indicators

MACD index moved again on the positive side, indicating that the market managed to turn the momentum again and add it in the recovery phase. The RSI index moved to value = 45, indicating that there would be a stable period before entering the bullish phase.

Ethereum / US Dollar

The same recovery image is visible in the Ethereum market. After hitting the major support level above $1,800, the price recovered and hit the first checkpoint for establishing a bullish trend, breaking the $2,000 line.
Even if Ethereum didn’t experience a compression trend, the zone between $1,750 and $2,500 remains crucial for the bullish price development phase. The next goal for the market is to reach $2,500 and escape any bearish thoughts for the next period.

Ethereum investors should be happier than others as Ethereum didn’t correct previous levels, for example, below $1,000, vanishing 2021 profits into thin air. Having established a deeper market depth will allow Ethereum to grow faster and more efficiently than Bitcoin and other cryptocurrencies. We expect Ethereum to grow at a different pace from other cryptocurrencies, capitalizing on its fundamentals and exploiting the economy from altcoins based on its resources.

The trading volumes have been sustained on the same levels while the moving averages have remained negative positioning, waiting for the mood to change.

Indicators

MACD index passed on the positive side, bringing the positive momentum back in the price formation process. The RSI index grew quickly and reached value = 50, indicating that the market is on the verge of a bullish and a bearish turn in the next few days.

Ripple / US Dollar

After reaching a crucial point in the support phase, Ripple managed to stabilize its position and rebuild its position towards the previous bullish levels. This time, climbing will be harder as the positions are known, and the depth allows less fancy moves than before.

The price reached $0.60 again, proving that the zone between $0.60 and $1.00 has been a buffer state between the bearish status below $0.50 and the bullish expectations above $1.00. The positive signal in this situation is that the market didn’t need to reach the sub-ultimate price levels around $0.25 - $0.30 for starting to climb again. This fact could lead the market to faster recovery and better results.

We expect that the price will remain on the same spot for some time more until the market follows a stronger move from Bitcoin or Ethereum. The trading volumes have not moved from the bottom, indicating that investors’ involvement in the market has been lower than ever before. The moving averages have remained close, showing that stability has been a bad advisor for this indicator after a while.

Indicators

MACD index moves back and forth on the positive and negative sides, indicating that the momentum does not affect the price formation process. The RSI index moved above value = 40, showing that the first step out of the bearish trend has started.

Litecoin / US Dollar

Litecoin had a break in the support level around $120, predicting a bearish downtrend for the next period. Bitcoin’s effect was much stronger in this case, and Litecoin’s price rebounded back to the $120 support level without much damage.

Litecoin was on the verge of avoiding another heavy correction, as the next support level lays around $70. This meant that the market would correct at 80 % from the top level in this trend. The expectations for the current trend will be for the price to recover until the average point around $175. This move would enable the market to climb even higher and catch the $200 point, meaning that the market would move in the bulls for the next period.

The trading volumes made a small spike during the recovery, but nothing special could bring the market in bullish status. The moving averages have been placed at bearish positioning, for now, a fact that will probably change in the next few days.

Indicators

MACD index passed again on the positive side, proving the little effect of momentum in the price formation. The RSI index rebounded at value = 40, showing that the recovery is on the way for Litecoin.

Bitcoin Cash / US Dollar

The downtrend for the Bitcoin Cash market reached $400, a previous bottom point for the market. The bear market started from $800 and reached $400, a 50 % correction in the bearish period only. A small recovery was evident in the chart as the price climbed to $440 during the last few days.

The 75 % correction from the top-level evident in the Bitcoin Cash market made many investors worry about its future and discourage them from entering the market again. We believe that small recovery moves will make the investors think about their stance again and enter the market again.

The trading volumes have remained on the lowest point while the moving averages have remained on the negative positions, and crossing each other, might bring news on the price formation.

Indicators

MACD index moved on the positive side again, showing that the momentum has not affected the price formation heavily. The RSI index moved above value = 40, showing that the recovery phase might start from now on.

Correlations

Bitcoin / Ethereum = 0.92 (+ 0.10), Bitcoin / Ripple = 0.96 (+ 0.02), Bitcoin / Litecoin = 0.95 (- 0.01), Bitcoin / Bitcoin Cash = 0.96 (+ 0.02)

As expected from the previous period, the recovery in its first phase was evident at every crypto asset. The high correlations were established in the previous period and showed that the market had been integrated, where every altcoin would follow Bitcoin in the same direction.

This became a reality in this period as every altcoin’s correlation was established above value = 0.90, indicating that every move from now on could be copied and realized in the price charts. The expectations for the next period will be shaped according to Bitcoin’s moves and leverage against other cryptocurrencies.