• Bitcoin (BTC, Tech/Adoption Grade “A-”) is on a run again and is now up to $38,000.
• Ethereum (ETH, Tech/Adoption Grade “A”) is up big as well, gaining more than 27% on the week.
• Polygon (MATIC) has turned around and is up 27% after posting nine straight red candles.
Last Wednesday, we saw Bitcointake a big bounce off the very bottom of our range at $30,000. It appeared the tides had finally turned back in favor of the Bitcoin bulls.
That assumption has proven correct as Bitcoin has now posted six straight green candles on its way to $38,000. For those of you keeping track, that means that Bitcoin has cleared the very important hurdle of $36,000 and is now in the upper half of our range.
The next important resistance is at $40,000. If BTC is able to close above that level, then a break out of this range is very likely.
Sentiment on Twitter, Inc. (Nasdaq: TWTR) has changed rapidly with the bears retreating to their dens. Shorts were squeezed heavily over the weekend as many traders were very pessimistic on Bitcoin even though it had not broken below the range we were tracking.
Many crypto traders tend to get overleveraged and bet too heavily on the market moving in one direction for too long. This usually ends with liquidations at the top of a market cycle for LONG traders and in short squeezes for bearish traders, which is exactly what we’re seeing today.
Short squeezes tend to act like rocket fuel for Bitcoin bulls, and BTC is up big time today.
Here’s BTC in U.S. dollar terms via Coinbase Global, Inc. (Nasdaq: COIN):
Ethereum has also bounced off its bottom-end support at $1,800 and was recently trading just north of $2,300. Its next resistance level is $2,400, after which ETH shouldn’t hit much resistance until it gets to the top end of the current range at $2,800.
The London hard fork that contains EIP-1559, the ever-important change to how fees are handled on Ethereum, will be deployed on Aug. 4. It’s a huge development rolling out on Ethereum very soon and should significantly improve the fundamentals of Ethereum, which already look as good as ever.
Improving fundamentals paired with rising sentiment and bullish price action means that the future is looking bullish for the second-biggest cryptocurrency in the world.
Here’s ETH in U.S. dollar terms via Coinbase:
Polygon had a very rough start to the month, sliding from $1.16 on July 1 all the way down to 63 cents on July 20.
Things have picked back up for MATIC over the last few days, though. It recently traded near $1.08. MATIC will face some resistance at this level until it breaks above $1.20; after that, it might make a run back to previous highs.
MATIC was gaining major momentum right before the market corrected in May, and it’s feasible for MATIC to be one of the big early winners when the market really starts to pick up again. This is an important altcoin to monitor.
Here’s MATIC in U.S. dollar terms via Coinbase:
Notable News, Notes and Tweets
• CoinDesk has a great write-up of some of the activity of Brian Brooks when he was the acting Comptroller of the Currency. Spoiler alert: It was bullish for cryptocurrency.
• Here’s more on the ridiculous number of shorts that were squeezed with the Sunday night surge.
What’s Next
Oh, how fast things can turn around in the crypto market.
Despite being a market infamous for its volatility, it is easy for crypto investors to get caught up in the mindset that things will go “up only” or “down forever.”
In reality, there are price corrections and there are recoveries, with both usually happening quickly, catching many people by surprise.
It is always important to zoom out and look at the bigger picture, literally and figuratively.
Literally, one must remember to look at both the weekly and monthly candles regularly instead of getting caught up in the doom and gloom of the daily candles. Both charts showed a different picture of BTC retesting and holding long-term support levels, like the 50-week moving average.
Figuratively, the macro picture of Bitcoin adoption is as bullish as it ever has been ... by a long shot.
Countries have begun to accept BTC as legal tender, a trend that is surely not stopping anytime soon. U.S. politicians are slowly learning more about cryptocurrencies and are opening up to the industry. Regulation will come and, while some may not like that, it is better to have politicians that know and care about cryptocurrencies writing that regulation than ignorant politicians who don’t understand blockchain technology.
Right now, both the literal and figurative big pictures are pointing to a bullish outcome.
Stay positive and stay tuned.
Best,
Alex
