Bitcoin - The sucker's rally nears its end
We made a case for the ultimate bear market rally just a few weeks ago. We also said the rally's erratic movements would suck many people into believing the market has formed the bottom and reversed to the upside. Indeed, that is exactly what we currently see in the market. Mounting calls for sky-high prices, guarantees of the bottom, and fear of missing out highlight retail's bullish sentiment. Meanwhile, the institutional side of the market continues to show systemic cracks, with many companies going bust amid crypto winter.
The list of affected companies and concise description:
1. Voyager (bankrupt) - defaulted on $350 million in the U.S. dollar-pegged stablecoin, USDC, and 15,250 bitcoin.
2. Zipmex (bankrupt)
3. 3 Arrow Capital (bankrupt) - filed for bankruptcy and founders went missing.
4. Celsius Network (bankrupt) - went bankrupt after freezing over 151 000 Bitcoins locked away from its 1.7 million users.
5. CoinFlex - (limited withdrawals)
6. SkyBridge Capital - cryptocurrency fund (suspended withdrawals)
7. Coinbase (investigated by the SEC) - probed over the issuance of securities and insider trading.
8. Binance (investigated by the SEC) - probed over Tether stablecoin and insider trading.
In addition to that, tighter monetary policy continues to pressure the U.S. economy, to which cryptocurrencies are highly correlated. As a result, we think it is just a matter of time until the market starts to manifest weakness again and drag the price of Bitcoin and other cryptocurrencies lower. Because of that, we are very cautious and looking for weakening signs in BTCUSD.
On the endnote, our medium-term and long-term outlook stays bearish. Due to that, we would like to set a price target for BTCUSD at 17 500 USD.
Illustration 1.01
Illustration 1.01 shows the total cryptocurrency market cap. It is far below its all-time high value, approximately 63% from it.
The list of affected cryptocurrencies
Luna - stablecoin (-99%)
CEL - cryptocurrency (-84%)
Cardano - cryptocurrency (-82%)
BNB - cryptocurrency (-57%)
XRP - cryptocurrency (-79%)
BTC - cryptocurrency (-64%)
ETH - cryptocurrency (-65%)
SOL - cryptocurrency (-82%)
Dogecoin - meme coin (-90%)
Polkadot - cryptocurrency (-84%)
Matic/Polygon - cryptocurrency (-72%)
*The list shows values from 30th July 2022. Declines are measured from all-time-high values.
Technical analysis - daily time frame
RSI is neutral. MACD is flattening. Stochastic points to the downside. DM+ and DM- are bullish, but the trend is weak or neutral. Overall, the daily time frame is neutral.
Illustration 1.02
The setup above we introduced several weeks ago; it still remains valid. Volume continues to support our thesis that buyers are harder to find between 22 000 and 24 000 USD. Although, it is possible that the price can continue a bit higher (especially at low volume).
Technical analysis - weekly time frame
RSI and MACD are neutral. Stochastic is slightly bullish. DM+ and DM- are bearish. Overall, the weekly time frame is neutral.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
The list of affected companies and concise description:
1. Voyager (bankrupt) - defaulted on $350 million in the U.S. dollar-pegged stablecoin, USDC, and 15,250 bitcoin.
2. Zipmex (bankrupt)
3. 3 Arrow Capital (bankrupt) - filed for bankruptcy and founders went missing.
4. Celsius Network (bankrupt) - went bankrupt after freezing over 151 000 Bitcoins locked away from its 1.7 million users.
5. CoinFlex - (limited withdrawals)
6. SkyBridge Capital - cryptocurrency fund (suspended withdrawals)
7. Coinbase (investigated by the SEC) - probed over the issuance of securities and insider trading.
8. Binance (investigated by the SEC) - probed over Tether stablecoin and insider trading.
In addition to that, tighter monetary policy continues to pressure the U.S. economy, to which cryptocurrencies are highly correlated. As a result, we think it is just a matter of time until the market starts to manifest weakness again and drag the price of Bitcoin and other cryptocurrencies lower. Because of that, we are very cautious and looking for weakening signs in BTCUSD.
On the endnote, our medium-term and long-term outlook stays bearish. Due to that, we would like to set a price target for BTCUSD at 17 500 USD.
Illustration 1.01
Illustration 1.01 shows the total cryptocurrency market cap. It is far below its all-time high value, approximately 63% from it.
The list of affected cryptocurrencies
Luna - stablecoin (-99%)
CEL - cryptocurrency (-84%)
Cardano - cryptocurrency (-82%)
BNB - cryptocurrency (-57%)
XRP - cryptocurrency (-79%)
BTC - cryptocurrency (-64%)
ETH - cryptocurrency (-65%)
SOL - cryptocurrency (-82%)
Dogecoin - meme coin (-90%)
Polkadot - cryptocurrency (-84%)
Matic/Polygon - cryptocurrency (-72%)
*The list shows values from 30th July 2022. Declines are measured from all-time-high values.
Technical analysis - daily time frame
RSI is neutral. MACD is flattening. Stochastic points to the downside. DM+ and DM- are bullish, but the trend is weak or neutral. Overall, the daily time frame is neutral.
Illustration 1.02
The setup above we introduced several weeks ago; it still remains valid. Volume continues to support our thesis that buyers are harder to find between 22 000 and 24 000 USD. Although, it is possible that the price can continue a bit higher (especially at low volume).
Technical analysis - weekly time frame
RSI and MACD are neutral. Stochastic is slightly bullish. DM+ and DM- are bearish. Overall, the weekly time frame is neutral.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
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