• Bitcoin (BTC, Tech/Adoption Grade “A-”) is up 3% today and looking to surge past $48,000.
• Ethereum (ETH, Tech/Adoption Grade “A-”) is also up 3% as it targets a breakout past its recent high near $3,400.
• Bitcoin’s crypto market dominance dropped 140 basis points to 44.1% as altcoins continue bouncing back towards their May highs.
Following the couple of months of sideways trading, it’s very positive that we’ve seen quick reversals from temporary pullbacks instead of reversion to previous ranges.
Now, Bitcoin is rallying again as it approaches $48,000. This price level previously acted as a temporary resistance, but with the King of Crypto breaking out, it looks like it is ready to mount a charge.
Just as bullish is that Bitcoin has easily held itself above its 200-day exponential moving average (EMA) and 21-week EMA and sits decisively above its 21-day moving average after almost touching it in the earlier correction. These levels should now act as support in the case of a bigger pullback.
Here’s Bitcoin’s price in U.S. dollars via Coinbase Global Inc. (Nasdaq: COIN):
Ethereum, like many other altcoins, has notably outperformed Bitcoin after it jump-started the rebound. It’s up 81% this month compared to Bitcoin’s 57% gain. The second largest cryptocurrency by market capitalization underwent its successful London upgrade earlier this month.
Despite showing stronger short-term price action than Bitcoin, Ethereum has not quite made it back to its midweek high. It’s still trading above its 21-day moving average, though, and it was a promising sign to see it definitively bounce higher after testing the support level yesterday.
Here’s Ethereum’s price in U.S. dollars via Coinbase:
Index Roundup
Despite facing midweek volatility, most cryptocurrencies marched higher after the small pullback.
The Weiss 50 Crypto Index (W50) gained 10.16% as the broad market continues to extend the breakout.
The Weiss 50 Crypto Ex-BTC Index (W50X) soared 23.71%, showing Bitcoin’s underperformance compared to altcoins.
Breaking down this week’s action by market capitalization, we see the continuation of small-cap outperformance as larger and mid-sized cryptocurrencies performed in line with each other. However, the movements by small-caps will only be sustainable if the large-caps keep progressing as well.
The Weiss Large-Cap Crypto Index (WLC) increased 19.29%, showcasing another solid week for the market leaders.
Mid-cap cryptocurrencies closely mirrored the large-caps again, as the Weiss Mid-Cap Crypto Index (WMC) rose 21.14%.
The small-caps were the biggest winners, as the Weiss Small-Cap Crypto Index (WSC) climbed 37.25%.
This week’s gains are a promising signal that the crypto market could break through and test all-time highs. Overall sentiment has massively improved, and the recent rally has lacked extreme leverage.
Notable News, Notes and Tweets
• UWM Holdings Corp. (NYSE: UWMC), the second largest mortgage lender in the U.S., will accept Bitcoin for mortgage payments later this year.
• Wells Fargo & Co. (NYSE: WFC) introduced a passive Bitcoin fund for high net worth clients.
• Cade Cunningham, the NBA’s first overall draft pick, signed an endorsement deal with BlockFi, where he will receive his entire signing bonus in Bitcoin.
What’s Next
The crypto market has extended gains for four straight weeks with no immediate end in sight. We’ve seen multiday corrections along the way, which is healthier than violent straight-line growth. Each time assets hold support with conviction, investors grow more confident in the price action.
Altcoins continue outperforming, but their future is dependent on Bitcoin and other large caps keeping up the momentum.
Of course, the crypto market is inherently volatile, and a correction can never be ruled out with certainty. But for now, this looks to be the calm before the next surge higher.
Meanwhile, crypto adoption continues gathering steam. Top NBA draft pick Cade Cunningham joined Jacksonville Jaguars’ quarterback Trevor Lawrence as a crypto ambassador. Now, both top overall draft picks in the NFL and NBA drafts have become involved in the crypto space.
With more prominent companies accepting crypto, wealthy clients demanding access to funds from the largest banks and major athletes looking to become ambassadors for crypto, the sky is the limit moving forward.
Best,
Sam
