• Bitcoin (BTC, Tech/Adoption Grade “A-”) is up roughly 1%, currently trading at about $33,200.
• Ethereum (ETH, Tech/Adoption Grade “A”) is also roughly a percentage point higher, sitting around $2,130.
• Bitcoin’s dominance over the crypto market dropped 60 basis points to 45.6%, but it didn’t make a significant move as trading was little changed overall.
The King of Crypto continues to hover between $30,000 and $40,000. It quickly recovered after last month’s breakdown of the critical $30,000 support level, but it’s not out of the woods.
Bitcoin still lags below both of its historical long-term bull market support levels. The 200-day exponential moving average sits at $39,500, and the 21-week exponential moving average is at $40,500. If Bitcoin can manage to overtake these current resistances, it will be a very bullish sign for future price action.
Meanwhile, Bitcoin trades slightly below its 21-day moving average, and it could face short-term resistance before potentially overtaking it.
Here’s Bitcoin’s price in U.S. dollars via Coinbase Global, Inc. (Nasdaq: COIN):
Ethereum traded in the $2,000-$2,400 range throughout the week, and investors are monitoring its movements before the notable EIP-1559 upgrade that is expected to take place in early August.
The update is set to change Ethereum’s fee structure in hopes of making it deflationary. However, it has been controversial because miners would bring in less revenue due to burning a portion of fees.
Unlike Bitcoin, Ethereum overtook its 21-day moving average on July 3 and hasn’t closed a trading day below it since then. If Ethereum can continue to maintain itself above the level, it is a positive sign for its short-term outlook.
Here’s Ethereum’s price in U.S. dollars via Coinbase:
Index Roundup
This week’s price action brought trading that ultimately ended very close to the levels where it began. There were no major runaways despite significant mid-week volatility.
The recent volatile swings in the crypto market are a likely byproduct of uncertainty. Investors are still waiting for bullish or bearish directional confirmation, and until then, we continue to experience range-bound swings.
The Weiss 50 Crypto Index (W50) shed 0.41%, which is virtually unchanged considering the volatility of the space.
The Weiss 50 Crypto Ex-BTC Index (W50X) decreased 0.51%, showing that Bitcoin performed largely in line with the broader market.
Breaking down performance this week by market capitalization, we see the broad market trend in each sector: very little overall change across the board, with choppy and volatile stretches.
The Weiss Large-Cap Crypto Index (WLC) lost 0.10%, which is totally negligible when considering crypto’s standard movements.
The mid-caps fared the worst, but there was little damage. The Weiss Mid-Cap Crypto Index (WMC) declined 3.06%.
The small-caps were this week’s sole winners, but the gains were marginal, with the Weiss Small-Cap Crypto Index (WSC) rising 5.05%.
For now, the lack of movement seen across the board supports the thesis of continued range-bound trading.
The small-cap outperformance that we saw is still likely a result of overselling during the recent correction. Altseason is on hold, and it should take a decisive move from Bitcoin and the large-cap cryptos before we see wild movements from less established projects.
Notable News, Notes and Tweets
• Pomp highlights Square Inc. (NYSE: SQ)’s intent to launch a Bitcoin hardware wallet for self-storage.
• Venezuela ranks third in Bitcoin adoption, as it looks to ease its current economic fiasco.
• Senator Elizabeth Warren gives the Securities and Exchange Commission (SEC) until July 28 to certify its role in regulating the crypto market.
What’s Next
While the crypto market continues consolidating, we’ll likely see the biggest names keep trading in their established ranges. Altcoins will likely rely on a new uptrend if they hope to set new highs.
Investors are still looking for a definitive movement to confirm the market’s future direction. But don’t be too impatient: The longer crypto trades sideways, the bigger the next move will likely be. If the move is upward, we can expect to see explosive trading past all-time highs.
Regulations are coming, but these are inevitable if an industry hopes to gain widespread acceptance. While lawmakers and regulators could create short-term headwinds, crypto isn’t going anywhere.
Meanwhile, global adoption is ramping up, and the current macroeconomic climate with high inflation provides a favorable environment for crypto. As long as the crypto market can continue consolidating without setting lower lows, its outlook will only keep improving.
Best,
Sam
