• Bitcoin (BTC, Tech/Adoption Grade “A-”) is down about 3% today, and it trades very close to $39,000.
• Ethereum (ETH, Tech/Adoption Grade “A”) is down 2%, while it hovers around the $2,350 level.
• Bitcoin’s crypto market dominance increased two full percentage points to 48.25%.
Bitcoin is down today, but it has enjoyed a consistent rally for over a week. BTC closed positive for nine straight days, shown by the series of consecutive green candles in today’s chart.
A dip is a welcome sign, considering nothing goes up in a straight line.
A sharp reversal off of last Tuesday’s bottom came after Bitcoin’s first close under the $30,000 support. With a lack of selling pressure, it was able to ride the momentum and shift in market sentiment all the way to the upper end of its three-month range.
Bitcoin managed to overtake its 200-day exponential moving average (EMA) of $38,500, which is a great sign. It also shot past its 21-day moving average, facing little resistance before notching six consecutive positive days afterwards. Bitcoin could still struggle as it contends with resistance at $40,000.
Here’s Bitcoin’s price in U.S. dollars via Coinbase Global Inc. (Nasdaq: COIN):
Like Bitcoin, Ethereum has also managed to record nine consecutive green candles, even if it closes today’s trading in the red. It bounced lower after briefly surpassing $2,400, but a brief pullback is always expected after consistent daily gains.
Ethereum’s highly anticipated EIP-1559 upgrade will take place on Aug. 4, and if it isn’t delayed, this will change its fee structure by burning miner fees in hopes of making it less inflationary.
The second largest cryptocurrency by market capitalization climbed past its 21-day moving average without any trouble. Now, it could face additional resistance at the $2,400 price level as well as $2,600.
Here’s Ethereum’s price in U.S. dollars via Coinbase:
Index Roundup
It was an eventful trading week for the crypto market, with Bitcoin making positive progress across all seven days. Bitcoin was able to notably outpace most of the industry’s biggest players, which is a bullish sign for the next potential rally.
However, investors will be exercising caution after a period of persistent gains. It is entirely possible that Bitcoin and the broader market retrace off of these recent highs and continue trading in range bound.
The Weiss 50 Crypto Index (W50) rallied 18.81%, highlighted by the strong performance of Bitcoin and Ethereum.
The Weiss 50 Crypto Ex-BTC Index (W50X) increased by 15.88%, showing how Bitcoin outperformed the broader market.
Breaking down this week’s performance by market capitalization, we see strong performance from cryptocurrencies of all sizes. The large-caps led the way, marginally outperforming their smaller and mid-sized cohorts.
The Weiss Large-Cap Crypto Index (WLC) climbed 23.33%, as the most established cryptocurrencies led this week’s charge.
The mid-caps were this week’s underperformers, but the difference was barely noticeable. The Weiss Mid-Cap Crypto Index (WMC) rose 20.86%.
Small-cap altcoin performance was strong, as the Weiss Small-Cap Crypto Index (WSC) gained 9.67%.
This week’s price action was exactly what bullish investors were hoping for. Bitcoin and the large caps led the way, while smaller and mid-sized cryptocurrencies trailed closely behind. Again, there will be no altseason until the most established players light the fuse for the next rally.
Notable News, Notes and Tweets
• Pomp highlights how Bitcoin helped MicroStrategy Inc. (Nasdaq: MSTR) improve brand awareness and netted shareholders billions.
• Galaxy Digital Holdings Ltd. (TSX: GLXY) CEO Mike Novogratz credits institutional buying for Bitcoin’s rebound.
• Lawmakers are sneaking crypto tax and reporting provisions into the infrastructure bill.
What’s Next
It is encouraging to see such a decisive rebound off of last Tuesday’s lows as broader investor sentiment continues to improve. After notching nine consecutive green days, today’s pullback is fully expected.
It will be important to see how the market reacts when Bitcoin and the other large-cap cryptocurrencies test resistances at the top of their established trading ranges. It is still entirely possible that Bitcoin retraces and continues to trade in range, but a decisive move forward could signal the next big move higher.
Meanwhile, institutions continue loading up on crypto assets, which is no surprise considering how Bitcoin and most altcoins are still significantly below their April and May highs.
Current fiscal and monetary policy decisions by governments heighten the need for institutions to hedge against disaster and protect themselves.
Fundamentals are as strong as ever, and it could be just a matter of time before the crypto market sets new all-time highs. Keep an eye on this ezine for our daily market analysis.
Best,
Sam
