Bitcoin / US Dollar
Price Analysis
The small parallel channel broke negatively, creating new perspectives on Bitcoin's market as the price has two main scenarios for moving in the next days. The first scenario is the return back to the smaller parallel channel between $9,300 and $9,600. This scenario is considered quite possible as the price has moved accordingly in similar scenarios in the previous cases. The second scenario is the continuation of the downtrend until there is a stop in the support levels below.
The major support levels are at $8,600, the lower boundary of the larger parallel channel, which is a long time support level. Another extreme scenario would be for Bitcoin's price to surge above any resistance levels, fueled by an external event outside from a technical analysis perspective. During the previous months, Bitcoin tried to break the $10,000 resistance level but it failed multiple times.
This kind of failure created a bearish mood in the market, which might be very difficult to reverse. We expect, if any major event didn't happen and affect the price, we expect a return on the smaller parallel channel for Bitcoin's price that will restore the volatility to the previous stages.
In the short-term diagram, we can observe that price moves were predicted since yesterday due to the large range of prices during the day. An increasing range in the daily prices might indicate a severe move in the field, prescribed from the previous days. This happened this time when the price moved below the technical signals, which they were confirmed today.
Indicators
MACD index is moving steadily towards zero, without any signal for a trend reversal. The momentum effect has been lost during the last months in Bitcoin's market while the RSI index is moving slowly in the oversold area, which might indicate a discount period for Bitcoin.
Ethereum / US Dollar
Price Analysis
Ethereum's price took the downtrend, reaching the previous support level, which was created from the bullish triangle, a couple of days before. The price reached the previous levels, around $245 but it could not sustain the momentum either the volume to support a further surge. The peak before $250 was a critical point for Ethereum as it has been reached three times during 2020, without being able to move above it.
This resistance level is crucial for Ethereum's future as a positive trend created in the crypto space will be tested at this level. If Ethereum didn't manage to overcome the breakdown, we hope that the support levels below will hold any kind of downtrend. As we have mentioned in previous articles, the major support levels are at $220, $200, and $185.
The bullish investors have established their positions in the previous support levels, showing a willingness to support them even more. The correlation effect in the market will show in the future if the bullish investors are willing to stand by their choices or abolish them. We expect a further price reduction to the previous support levels, according to the rest of the market's status.
Indicators
MACD index tries to enter another phase of lowering momentum, showing that the previous surges weren't accompanied by the proper volume to establish themselves. Accordingly, the RSI index is moving slowly below value = 50, a bearish signal which might create another downtrend in the upcoming days. We should highlight that financial market indicators like the above can detect a trend formed in the market and should be accompanied by other technical signals also.
XRP / US Dollar
Price Analysis
Another cryptocurrency broke the technical signal after Bitcoin's yesterday drop. XRP broke the second parallel channel, as expected from previous analysis, and also broke the larger parallel channel, formed from early-May until today. The most possible scenario for XRP's future is the return to the previous parallel channel's action between $0.18 and $0.20. The small changes between prices at different levels might create different opportunities for day trading while we believe that XRP's coins shouldn't behold for a long time.
As we can observe from the technical analysis point of view, a bearish trend was formed from early-May, reversing the previous bullish one. The bullish period was formed during the lockdown, showing that many cryptos were affected positively from the severe economic impact in the market. XRP has promoted itself as the cryptocurrency for the large, systemic players (a.k.a. the banking system), a fact that shows us how it could be used or manipulated regarding its price. We expect an immediate correction in the market, as the trend might follow the same pattern over time.
Indicators
MACD index has moved below zero since mid-June, showing a continuous bearish trend, formed in the last days, which was confirmed yesterday. Any significant move in the markets is often giving signals before. This happens a lot in the traditional markets while we can say that it happens also in the crypto market. On the other hand, the RSI index is moving on the oversold signal, a move that might spark a boom in XRP's price.
Litecoin / US Dollar
Price Analysis
Another major cryptocurrency that broke the technical signal. Litecoin broke the smaller parallel channel which indicates a bearish trend as the parallel channel was compressing towards $43. When the smaller parallel channels broke, we have to see the larger parallel channels between $49 and $41. The next support level is formed at $41, which will possibly be tested in the next days if the bearish trend continues.
If the ups and downs continue, we expect Litecoin's price to correct positively and bring back to the parallel channels. Litecoin has been characterized as the "boring" cryptocurrency as its core developers have abandoned the project. This means that there are no fundamental events that will happen in the future. This perspective can make our predictions bolder as no serious event is going to affect the price in the foreseeable future. In the upcoming days, we will add more features that will spice up the Litecoin "boring" situation and enable us to make more precise predictions about its future.
Indicators
Both indicators show that the stability will continue for the upcoming weeks. MACD index is moving near zero for almost two months, which predicts a slowly dropping move in the previous period. We also see that the RSI index is moving in the middle boundaries between 60 and 40 for the two previous months. This signal for stability will continue to exist unless the market enters a new phase, either bullish or bearish.
Bitcoin Cash / US Dollar
Price Analysis
As told in the previous crypto analysis, several lower boundaries were tested during the previous days. In Bitcoin Cash's case, the smaller parallel channel broke negatively. In the next days, we will see if the price will correct positively back to the parallel channel or it will collapse in the support levels below.
The market in Bitcoin Cash is not very deep as the support levels below $220 are almost not existent. This could cause a problem if the market collapses, there would be no stops that will prevent a severe downtrend. We expect a parallel move in the upcoming days as there is significant stability in the market that might transfer in the next days until there is another significant change in the market.
Bitcoin Cash has faced many fundamental problems in the past that affected the price in abstract level, without a certain correlation. The fundamental problems affect the price on many levels and it is a factor we can't predict in a certain way. This fact shows that a severe throwback could hold the entire market locked for minor reasons.
Indicators
The same picture can be seen in the indicators diagrams. MACD index moves near zero from early-April, showing no momentum for the market. On the other hand, the RSI index moves between 40 and 60 from mid-March until today, prescribing long-term stability that will affect Bitcoin Cash' ecosystem development regarding the price and possible ventures around the cryptocurrency.
Correlations
The correlations between Bitcoin and the other examining cryptocurrencies have remained positive and strong, while many of them increase during those days. It is worth noting that XRP, Litecoin, and Bitcoin Cash increase their price correlation with Bitcoin, making the market even more integrated between its assets. As we have told a couple of times in previous articles, Bitcoin is the leader of the market and every trader in any crypto market should take that as a primary fact for day trading and long term holding.
The increased correlation coefficients don't create diversification opportunities for a serious investor, who might see the crypto market as entire hedging for their portfolio of investments.
