Just a short-term bounce or a new bull market?

TL;DR:

  • Our market view (mid-August):
    • Short-term: Neutral
    • Long-term: Negative
  • Crypto and traditional markets have bounced significantly in the previous month. Bitcoin appreciated by 17.7% in July.
  • Crypto Total Market Cap (TOTAL) gained 22.4% in the previous month. Altcoins outperformed Bitcoin.
  • Within the large-cap cryptocurrencies, the best performing asset in July was Ethereum (ETH), with a gain of 57.7%.

Market overview

After negative months of May and June, July brought a bit of optimism to the crypto market. The worst enemy to the markets – inflation seems to have topped out in July. Long term trend remains negative, but crypto markets bounced right at the 200-week exponential moving average (EMA), where it has found a bottom in the past two bear markets. If markets find a bottom around current levels, it will probably start with an accumulation period where we can expect a sideways market for a few months.

TOTAL_2022-08-19_17-02-04_07230

In July, Bitcoin’s price managed to bounce from oversold levels. Lower levels were tested twice, afterwards the price rose to 50-day EMA (red). Currently, Bitcoin faces the first resistance zones. As we mentioned in the last weeks, 100-day EMA (white) proved as a critical resistance. In the bear market in 2022, Bitcoin exceeded it just for a few days in March. In all other cases, it was a signal of price exhaustion. At the moment, we can see a negative divergence in the MACD histogram. Moreover, we see weak volume in all the exchanges, which is not empowering signal for Bitcoin’s short-term price.

BTCUSDT_2022-08-19_17-03-33_fb0f4

In the short term, the crypto market price trend is neutral with sideways price action in August. Our short-term market view is neutral.

Crypto market view (2022-07)

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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.