Bitcoin’s retest of the breakout

Last month we shared a chart of Bitcoin breaking out of its long-term downtrend that started in December 2017. After the breakout, there is often a retest of the breakout level, which is also the current case with Bitcoin.

Based on this scenario, Bitcoin could theoretically decline to ~$9.000, but we believe this is highly unlikely in the current market environment. We expect Bitcoin and other crypto asset prices to continue with the bull run after a shorter consolidation period in the $9.800 to $10.500 Bitcoin price range.

Screenshot 2020-09-10 at 12.02.23

Market overview

In the first half of August, the market continued with its bull run and gained 22.9% in the first 17 days of the month. This was followed by a sharp correction as the market shed 15.2% of its value in the next ten days. In the last days of the month, the market rebounded and ended the month with a positive return of 14%.

Chart 1 - Crypto market performance (2020-08)

22 of the top 25 assets by market cap recorded a positive performance in August. DeFi is clearly entering the main stage as the top three performers were yearn.finance (+711% – not a typo), UMA (+424%), and NEM (+170%).

Altcoins continue to strongly outperform Bitcoin, which gained 3.2% in August. Bitcoin represented 57.3% of the total cryptocurrency market capitalization at the end of the month, down from 62.4% a month ago.

Chart 2 - Top 25 assets by market cap performance (2020-08)

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DISCLAIMER: This article is for informational and discussion purposes only and does not constitute a marketing message, an investment survey, an investment recommendation, or investment advice. The article was prepared exclusively for a better understanding of market dynamics.

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