“For many, now is the chance to enter before the next leg up.”
Sam Blumenfeld wrote that on Friday, for the July 23 issue of Weiss Crypto Alert, when Bitcoin was trading in the $32,000 range.
Well, on Sunday evening, Bitcoin (BTC) started to surge, reaching as high as $39,100 early Monday morning. As of midday Monday, it’s settling in around $38,300.
So, is this the beginning of the big move to $100,000 and beyond?
It’s encouraging that Bitcoin looks to be breaking out of a consolidation pattern that saw it test key support at $30,000 a number of times. Indeed, that the King of Crypto failed to break down amid those tests set the foundation for this quick bounce.
From here, in the short term, $41,000 and then $46,000 — the top of the recent range and the level where Bitcoin broke down in May, respectively — are the next major tests.
Let’s hand it off to Sam for additional context:
Bitcoin’s range-bound trading adventure continues, minus the brief drop below $30,000 that lacked the selling pressure to send it tumbling lower. Despite a close below $30,000, the King of Crypto booked a solid relief bounce that’s keeping it on track to continue consolidating.
Despite the solid bounce off its support, Bitcoin is not out of the woods. It must still try to maintain this momentum to distance itself from the lower end of its trading range.
Bitcoin still trades significantly below its 200-day exponential moving average (EMA) and 21-week EMA, which are historically important long-term bull market support levels. Looking shorter-term, Bitcoin tested its 21-day moving average early in today’s trading before bouncing lower.
Here’s Bitcoin’s price in U.S. dollars via Coinbase Global, Inc. (Nasdaq: COIN):
Ethereum faced a similar challenge to Bitcoin as it retested support at $1,700, but it held above the level without breaking down. The second-largest cryptocurrency by market cap is already up 20% since Tuesday’s low and should continue consolidating after the relief bounce.
Ethereum is right at its 21-day moving average, which could pose as a temporary resistance like we saw with Bitcoin earlier today. Overtaking it would be a positive short-term signal and could lead to a move above the lower end of its recent trading range.
Here’s Ethereum’s price in U.S. dollars via Coinbase:
And here’s how Sam set the stage for Sunday night’s drama:
As expected, institutions are looking to further dive into the crypto space while prices are significantly off of their all-time highs. With inflation ramping up, more and more institutions are hedging against the current financial system by entering crypto.
The Federal Reserve has repeated that it will continue juicing the economy until it is satisfied with the recovery, but this could take an extended period of time considering how employment numbers and jobless figures keep missing estimates.
Meanwhile, the crypto market will most likely continue consolidating. Bitcoin faced an important challenge when it closed below $30,000 during the week, and buyers jumped in to protect it.
This is a very positive sign, and as long as the biggest players in crypto avoid setting lower lows, we should see a continuation of the bull market — and the anticipated parabolic phase — after the consolidation period.
For many, now is the chance to enter before the next leg up.
Click here to follow cryptocurrency markets along with Sam and the Weiss Crypto Alert team.
Best wishes,
David Dittman
