The Battle of the Bulls and Bears

•  Bitcoin (BTC, Tech/Adoption Grade “A-”) has set up a good base of support and is eyeing up $36,000.

•  Ethereum (ETH, Tech/Adoption Grade “A”) has recorded some good momentum over the past two weeks of trading.

•  Polkadot (DOT, Tech/Adoption Grade “C”) broke through resistance today and has targets set on $20.

Bitcoin has established strong support at $30,000, having held above that mark very well over the last two weeks. Still, strong overhead resistance remains at the $36,000 level, leaving the King of Crypto unable to break out from this current range.

This isn’t necessarily a bad thing, though, as BTC had been in a phase of “up only” for months on end. Sometimes you have to reestablish support at lower levels in order to build a strong base to push prices even higher.

And that seems to be exactly what Bitcoin is doing, as bulls have been buying in volume at any price below $32,000. The next big level we’re watching is $36,000, after which a breakout above $42,000 becomes more possible.

There are also rumors that the majority of volume at these levels has come from institutions and corporations who have been buying from weak-handed retail traders. Of course, we won’t be able to confirm these rumors until the next round of financial reports come out, but it wouldn’t be shocking for institutions to buy at these lower price levels — they typically trade on much larger time frames than retail buyers.

Either way, all eyes are on $36,000 as the BTC recovery continues.

Here’s BTC in U.S. dollar terms via Coinbase Global, Inc. (Nasdaq: COIN):

Ethereum has also been range-bound since mid-June, although it does appear to have built up some momentum since June 26. ETH has posted 10 green candles over the last 12 days and is closing in on $2,400 right now.

Ethereum has actually held up better than Bitcoin in this recent price correction, believe it or not. That shouldn’t be too surprising if you have been following the ETH/BTC chart, which shows that ETH has been gaining on Bitcoin for months now.

It is possible that Ethereum could lead the next wave of this recovery, especially if it breaks above the top of its current range, $2,800, before BTC breaks $42,000.

As for the fundamentals, transaction fees have dropped significantly, to an average of about 40 gwei today, or roughly $2. Gas fees hit highs of more than 300 gwei earlier this year, so this is a welcome change, making it cheaper to transact on Ethereum right now than it has been for much of this year. And fees should decrease significantly after the EIP-1559 upgrade on Aug. 4.

Here’s ETH in U.S. dollar terms via Coinbase:

Polkadot has had a real rough go since mid-May, dropping from a high of $50 to a low of about $14 on June 22. DOT had been struggling to break above $16 for the last two weeks before finally breaking above it with authority today.

There is little resistance on the DOT chart between the current level and $20, so DOT could retake $20 shortly. From a purely technical, analysis-focused approach, Polkadot looks very good at the moment.

Here’s DOT in U.S. dollar terms via Bittrex:


Notable News, Notes and Tweets

•  For those interested in the evolution and current state of non-fungible tokens (NFTs), here is a great write-up on Forbes.

•  The importance of the Ethereum London fork that includes EIP-1559 coming this August can’t be overstated.

•  Institutions are very bullish on Ethereum right now, which may confirm the thought that ETH might lead this next rally.

What’s Next

When the crypto market trades sideways, as it has been lately, it’s easy to get bored and lose track of the bigger picture. We’re all guilty of getting caught up in the short-term price action from time to time.

But don’t let this range-bound trading distract you from the bigger bullish fundamentals developing in the market today.

Bitcoin is currently being adopted by South American countries as legal tender, and that is a trend that will continue as time goes on. The Bitcoin network helps bank the unbanked, and in smaller countries, especially ones that depend on remittances, that’s a huge deal.

Politicians are slowly learning about the importance of Bitcoin and are gaining a better understanding of cryptocurrencies, which will lead to smarter regulation down the road.

Ethereum is one of many networks with huge, important updates in the pipeline, which will make the network even better than it currently is. Institutions are taking notice and are likely buying this dip.

I highly recommend you don't sell them your coins at these cheap prices.

Cryptocurrencies could usher in the greatest transfer of wealth from institutions, corporations and the 1% to the masses, so it is important to be an early adopter of this new technology and currency system.

And remember to keep a macro perspective at all times.

Best,

Alex

About the Crypto Analyst

Alex has been actively researching and investing in cryptocurrencies since 2017. He contributes research and reports to several Weiss crypto publications, with a primary focus on helping to create crypto trading strategies.

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