Are We Heading to Another Bull Trap?

News • 2021/08/04 • by

Bitcoin / US Dollar

The market made another step back today as the price dropped to $38,500, creating a slow path to establish a bearish direction for now. The crucial level at $40,000 has remained the ultimate goal for now as any potential bullish action will start from this point and on. If this move reverses towards a bull trap, we expect the price to stop at $36,000, which is the average of the previous compression trend.

If the average point at $36,000 manages to hold firmly, without any breaks, we hope that the market could reverse into a clear bull run in the next period. The opposite scenario on the bearish side could lead the market to another compression trend between $32,000 and $40,000. On the other hand, again, a small decline in the current period could eliminate any non-believers who want to claim any profits made during the last few days.

If those investors have claimed their profits and want to take a step back in their investing positions, there is plenty of field for other investors that want to deploy more capital and increase their positions in the market. The market needs to overcome any bull traps at this moment and look forward to building a position for aiming the $47,000, the next bullish goal on the technical chart.

The trading volumes have returned to normal rates for now, and the moving averages continued to establish a bullish formation.

In the short-term diagram, we can observe that the bullish uptrend was smooth enough to break the $36,000 average and the $40,000 resistance level. Another similar uptrend should be established to break the next resistance levels and lead the market to higher than before.

Indicators

MACD index has continued to stay in the positive area but with decreasing momentum, indicating that the market momentum cannot help very much in the price formation process. The RSI index moved below value = 60, showing that the market could move to more stable positions in the next period.

Ethereum / US Dollar

Ethereum seems to hold strong the current price levels, as the price remained above the $2,500 support level, which was the main bullish checkpoint for entering a phase of growth. The coin has started to create an independent way from the rest of the market as it tries to hold higher positions and stabilizes them with new momentum.

The positive impact of Ethereum on the rest of the market is also a key component to its success as more and more altcoins are dependent on Ethereum infrastructure to achieve higher growth and user acquisition. The expectations are higher for Ethereum than other altcoins as its core underlying technology derives multiple value paths for building a parallel ecosystem that boosts the final recipient.

If the price manages to hold above the $2,500 line, Ethereum would probably attract more investors who want to preserve their portfolio’s value. Of course, Ethereum won’t drop Bitcoin from the No.1 spot in the crypto market, but its impact will increase as it will show more stability and scalability on its path.

The trading volumes have remained at normal levels, without any exaggerating move to take place, and the moving averages have remained in a bullish position, sustaining the positive outlook for the coin.

Indicators

MACD index is slowly decreasing but remained in the “green” area, showing that the market still has positive momentum to feed the price. In contrast, the RSI index returned to value = 65, showing that there is still bullish potential for the current situation.

Ripple / US Dollar

Ripple has shown remarkable stability for this period, marking another day in the space between $0.60 and $1.00. As we have highlighted in previous articles, this area has remained unexplored in terms of price action. This is a perfect moment for Ripple to build more market depth and establish a stronger position at higher price levels than before.

Ripple’s price had been on the lower end of the altcoins for a long period as the price was fluctuating between $0.25 and $0.30. Establishing another market position at levels, triple at value from the previous size could be a worthy message for potential investors as they see a definite growth and potential in the coin.

The fundamental value of Ripple has remained on the same page as its customers are mostly banks and financial institutions that don’t seem to be affected by price fluctuations. Getting the fundamentals out of the conversation, Ripple continues to have a favorable position in the crypto market. We expect to get affected positively by other dominant cryptos to achieve new high levels.

The trading volumes have decreased a little over the last few days, while the moving averages have established a bullish position for now.

Indicators

MACD index remained positive, while the RSI index moved between values 55 and 60, indicating that the market could go upwards but with slower moves than before.

Litecoin / US Dollar

The stability could be recognized at lower cryptocurrencies such as Litecoin, whose price remained around $140. The stability in the current phase shows that Litecoin is trying to hold a neutral position in the rumors regarding bull traps in the Bitcoin market and establish an independent position in the market.

This is hard to achieve as most inflows in the crypto market derive from Bitcoin, but Litecoin has tried this before. The compression between $125 and $200 remains the core situation that the coin will face from then on, marking the spots for a possible uptrend or downtrend.

The support level around $125 could be the next spot for establishing a bearish approach in the market, while the $175 point will mark a potential move towards the bullish path. The trading volumes have made a small spike during the last days, while the moving averages have been on bullish formation for now.

Indicators

MACD index is decreasing but remains in the positive area, marking a slower momentum adaptation in the price. The RSI index moved to value = 55, indicating that the price could remain on the spot for the next period.

Bitcoin Cash / US Dollar

Small fluctuations are evident in the Bitcoin Cash market as the price moved down to $540, a bit lower than the crucial point at $550, which was a point that the price had changed directions many times in the recent past. The expectations are unclear for Bitcoin Cash as it seems unable to establish a clear path towards the next bullish goal at $700.

At the same time, the corrections in the market have not had enough impact to let the price fall at previous levels, showing that the lower levels have enough market depth to absorb any severe bearish move. We expect a slow adaptation from market dynamics in the price formation, without any surprises at that.

Indicators

MACD index is moving slowly in the green area, picking a potential cross in the next period while the RSI index moved below value = 60, indicating that the market will probably move more on the stability side than on the bullish one.

Correlations

Bitcoin / Ethereum = 0.92 (-0.03), Bitcoin / Ripple = 0.94 ( 0 ), Bitcoin / Litecoin = 0.98 (+ 0.03), Bitcoin / Bitcoin Cash = 0.96 (+ 0.01)

The correlations have entered another stable phase, indicating that the market is waiting again for another move in the Bitcoin market to start growing or decreasing its values.

While Ripple and Bitcoin Cash have remained on the same correlation values, which represent more stability in the price action, Litecoin has increased its dependence on Bitcoin, following its moves loyally.

On the other hand, Ethereum’s resistance to Bitcoin’s volatility has started to impact the correlation field, as its correlation is decreasing and will probably find a lower effective relationship in the next period.