• Bitcoin (BTC, Tech/Adoption Grade “A-”) struggles to break above the 21-day moving average.
• Ethereum (ETH, Tech/Adoption Grade “A”) is channel trading and has struggled to regain the $2,200 level.
• Litecoin (LTC, Tech/Adoption Grade “B-”) is following Bitcoin and will likely go in whichever direction the King of Crypto takes it.
Bitcoin has bounced back from the lows set last week and has shown strength at the low end of the channel it’s been trading in.
True, it struggled to overtake its 21-day moving average yesterday and is down about 5% today. But we’re not worried about that. Remember, this sideways trading is expected during the transition from the third, bullish phase in the crypto four-year cycle to the fourth, parabolic phase.
So, it does appear that Bitcoin and the rest of the market will continue its sideways range-bound trading for a little while. As long as BTC continues to hold its downside support, our outlook remains bullish.
The range that we are looking at in BTC is between $30,000 and $42,000, with the 21-day moving average sitting right in the middle at $36,000.
That level is important. Not only is it in the middle of our range, but as the 21-day moving average, it represents significant upside resistance for the King of Crypto.
A break above that level will push Bitcoin into the upper half of that range and will establish the $36,000 level as support.
It might take some time for BTC to get there, so patience is key until then. And once it does happen, we have reason to believe Bitcoin’s continued recovery may speed up from there.
Here’s BTC in U.S. dollar terms via Coinbase Global, Inc. (Nasdaq: COIN):
Ethereum is also channel trading right now, with a range between $1,800 and $2,850. ETH is in the lower half of that range, facing resistance at the $2,200 level, which it was unable to close above yesterday.
Like altcoins in general, ETH has lost some ground compared to Bitcoin over the last few weeks, and it does appear that it will likely follow behind Bitcoin during this recovery.
Luckily, the $1,800 level has shown to be strong support. With good development updates on the way later this summer (see EIP-1559), there is still much to be bullish about on the second largest crypto asset.
Here’s ETH in U.S. dollar terms via Coinbase:
Litecoin has fallen 67% from the high of $415 it set in May. It’s trading at a huge discount at around $136 today.
Litecoin is often seen as the silver to Bitcoin’s gold, and it absolutely follows behind BTC — meaning that whatever direction Bitcoin takes moving forward, Litecoin will follow suit. Bitcoin needs to lead the recovery here for Litecoin to start making up ground.
Here’s LTC in U.S. dollar terms via Coinbase:
Notable News, Notes and Tweets
• More on the Bitcoin mining ban in China and the related effects on hashrate.
• Bitcoin supporters in Congress are out in full force today.
• Although, most people in government still have a backward understanding of cryptocurrencies.
What’s Next
After months of nothing but “up only” price action in crypto, the market was due for a pullback. In fact, we had been warning about the potential for a price correction since the beginning of 2021.
These pullbacks always seem shocking to some investors, but they’re par for the course in cryptocurrency investing.
Bitcoin and its counterparts might see continued channel trading for multiple months, but it does seem increasingly likely that we saw the bottom of this price correction last week. BTC appears to have established a floor at $30,000 and ETH at $1,800.
This can be seen as a good buying opportunity for some investors; however, more conservative investors will likely wait until the upper bounds of these price ranges are broken through.
Either way, we are as bullish as ever on this industry when looking at the bigger picture. Exciting things are waiting down the pipeline in crypto.
Best,
Alex
