Bitcoin / US Dollar
Price Analysis
The smaller parallel channels break positively but it immediately returns back to the narrow boundaries between $9,300 and $9,600. The narrow parallel channels, formed over the last 10 days in Bitcoin's market, have created a new, short-term standard in the market, showcasing that volatility may appear reduced but it could return to the previous levels.
The volatility effect is quite common in the crypto markets and was one of the points that many institutional and accredited investors were sceptical of investing in any cryptocurrency. The volatility reduction shows that more and more investors will consider including crypto assets in their portfolios. The increasing demand for crypto assets will give a boost to the market and establish a more stable and increasing trend for Bitcoin and therefore for the entire crypto market.
The current compression in Bitcoin's price has affected the entire crypto market, showing that the main cryptocurrency should be studied to explain the majority of the moves in the crypto market. At the end of the article, you can always find a correlation matrix between Bitcoin and the cryptocurrencies analyzed in the post.
In the short-term diagram, we can observe that price compression is severe and could lead to a major change in the near future. The price compression is often the "calm before the storm" pattern, showing a rapid move outside the boundaries, with major effects in the next stage of the market. The longer the period of compression in the market, the most sudden and drastic will be the next move in the market
Indicators
MACD index continued its plummeting near the zero zone but in negative values, showing negative momentum in the market, which is incompatible with the current stability which is the major attribute in it. On the other hand, the RSI index moved below 50, a bearish move that may indicate a sudden downward turn in Bitcoin's market during the next days.
Ethereum / US Dollar
Price Analysis
A new hit-point was reached for Ethereum, as after the positive breaking of the triangle, the price raised up to $240, establishing a point in the previous bullish point. The $240 point is a significant level for Ethereum as it was reached 3 weeks ago as the local high in the market. The previous time that the $240 level was reached, timed back in early-March, followed from a crash in the crypto market.
The uncertainty remains high at this point for Ethereum, as there no indicators and capable measurements for predicting the next trend. We can only expect, in case of a bearish scenario, that the support levels will work, first at $225, secondly at $220, third at $200 and last at $185. All of the mentioned support levels were formed during previous prices' compressions, showing that many investors have entered the market at this level and want to keep their positions alive, by rising their bets.
Indicators
MACD index shows great convergence but still remained in the negative zone, showing that the momentum effect needs a little more boost for starting a new trend. On the other hand, the RSI index didn't manage to break the value = 60, showing that the price may fluctuate a bit for establishing a new trend in the market.
XRP / US Dollar
Price Analysis
XRP's price followed a parabolic curve during the last 3 months, starting from $0.15 and reaching almost $0.19 yesterday. The major parallel channels that were formed, showed a clear bullish trend from mid-March to early-May and another bearish trend from mid-May until today. The parabolic move starts really dynamic, creating profits for the investors while the downward move was rather slow on the trend adaptation.
In recent weeks, we can observe that parallel channels were formed twice, creating price compression in the market. The first time was on early-June, where the price was compressed around $0.2 and after a week of compression, the price dropped around 5%, below $0.19. This scenario could be followed this time also, where the price is compressed at around $0.19, where every direction might be possible in the next days.
XRP's is heavily effected from other cryptocurrencies as shown in the last matrix of the post. The differences between the channel's moves could be explained from the different investor's categories that try to enter the market and continue to invest in the coin in every drop.
Indicators
MACD index is nearly zero, showing a lack of momentum at this moment for the market. On the other hand, the RSI index is moving in the near oversold zone, a definite bullish signal. If the price continues to drop in the next days, it would be a bargain for XRP's investors and we are going to expect a major uplift in the price.
Litecoin / US Dollar
Price Analysis
Litecoin is considered one of the most boring markets as it shows less volatility during the last months, without any major ups and downs. We can highlight two major trends in the Litecoin market that shape the current situation. The first major trend from mid-March to late-April, was a mild bullish trend, taking Litecoin from $32 and reaching up until $49. The 60% surge was enough to establish a correction move afterwards and establish a new bearish trend that lasts until today.
The price today is around $43, a minor drop from local high at $48, showing that the market is showing relative stability and robustness to different events like the pandemic and its side effects. We should also highlight some characteristics in the current market situation that will help in future analysis. The price climbing in some cases (as highlighted with angles in the scheme) was similar and it lasts exactly the same amount of time for reaching the high point and then it dropped at a similar pace. The second point we should highlight is that there is a price compression in the last week, which may lead to a sudden movement. This could be quite unlikely, depending on the recent Litecoin's history so we expect a little move from now on for that.
Indicators
MACD index has been stabilized around zero, showing that Litecoin has no momentum strategies in the recent time while the RSI index shows that Litecoin is moving slowly and steadily towards the oversold area, creating bullish prospects for the coin. We expect a rather slow adaptation of a bearish trend until an oversold point is reached and the trend will reverse for Litecoin's favour.
Bitcoin Cash / US Dollar
Price Analysis
Bitcoin Cash's price is looking similar to the other cryptocurrencies' moves. We can highlight two established trends over the last months that shaped the current situation in Bitcoin Cash. The first trend was formed around mid-March until mid-April, reaching from $150 to $260. From that point and forward, the price is moving parallel to the x-axis, compressing a long-term trend around $230, near the current price. The compressing parallel channels tend to create internal patterns that can help us to trade Bitcoin Cash more easily. The first pattern are the 45o triangles, formed two or three times during the stable trend.
Those triangles show that there is a certain possibility for reaching the upper boundary of the parallel channel in a certain amount of time (around 11 days). This pattern can help us to set trades when the lower boundary is reached, giving us the opportunity to claim profits. The second pattern is the narrow parallel channel, created the last week between $240 and $230. The price compression shows that a price jump or drop will be expected in the next days, always between the boundaries.
We expect Bitcoin Cash's price to move accordingly to the other cryptocurrencies, without reducing its correlation with the other crypto assets. The fundamentals behind Bitcoin Cash are not very supportive towards its price move, showing little or no support with actions against other coins.
Indicators
MACD index is moving near zero, showing little evidence about price's momentum and ability to create a new trend in the market. In parallel, the RSI index jumped back from near value = 40 to value = 50 and move lower again, creating a mixed pattern for what can be done in the future about Bitcoin Cash's trading.
Correlations
| Correlation Coefficient | Bitcoin |
| Ethereum | 0.95 |
| XRP | 0.81 |
| Litecoin | 0.86 |
| Bitcoin Cash | 0.90 |
The correlations are significantly higher over the last month, showing that the market has a unified way of moving. The main player in the market, Bitcoin, sets the tone and every cryptocurrency follow at a significant rate. The correlation coefficient could be used for pairs trading, a traditional strategy for trading pair of stocks or other assets. A similar model could be used in crypto trading also, providing a useful tool for any trader.
