Bitcoin bends, the crypto market unscrews: beware of the return of bearish momentum?

Since last Sunday, the crypto market has taken on a very different dynamic from what we have seen in recent weeks. Indeed, after the arrival of the American indices on technical resistances and the bullish resumption of DXY, the market unscrewed downwards by returning to old price levels. The question is whether we will continue this decline or if it is just a stall before going for new price highs. In this crypto point of the weekend, let’s see together what could happen.

This market analysis is offered to you in collaboration with the Trading du Coin and its solutionon algorithmic trading finally accessible to individuals.

Cryptocurrency Market Clears Recent Efforts

Total Cryptocurrency Market Cap Price (1D)

After breaking out of the red zone where the market was struggling, a top was found on the May 27 low at $1.147 billion. However, the crypto market failed to hold above the technical confluence which is the MA100, the EMA 13/25 as well as the former resistance. Falling sharply, the market returned to the resistance seen in June and July. Simple retest? Or, a small rebound before going to see lower?

It is clear that if the market wishes to resume its bullish momentum, it is preferable to witness a resumption of the confluence of technical levels that we have just mentioned. This would show strong buyers. HAS on the contraryif it is rejected on these levels, this will lead us to a simple observation: the momentum is bearish, it will be necessary to favor short positions.

Altcoins are hit hard

Market capitalization price of cryptocurrencies excluding Bitcoin and Ethereum
Price of cryptocurrency market capitalization excluding Bitcoin and Ethereum (1D)

As we know, altcoins are very sensitive to the movements of Bitcoin and Ethereum, the latter more interestingly given its recent outperformance. Last week, I warned about the importance of the POC in confluence with the red zone. Having managed to get rid of it, the market could continue to rise. However, being dangerously close to it, it lost this level which was in confluence with the MA100. Having failed to recover the EMA13 and 25 which are good tools for the short term trend, this confirmed the bearish bias to have on the market.

Altcoins are back to around 395 billion, an interesting technical area that needs to be picked up. This would make it possible to attempt a bullish push towards the 25 EMA (grey line) then the 200 EMA if possible. However, a rejection of the price to the current levels will likely mean continued bearish momentum for altcoins. In this context, it will probably be necessary to expect a return of the price on the Value Area Low.

Bitcoin tries to regain strength against cryptocurrencies

Bitcoin Dominance Course (1D)
Bitcoin dominance price on a daily scale (1D)

Currently, bitcoin’s dominance is unbelievable. On the contrary, it demonstrates the asset’s lack of vigor for several weeks. Currently pausing in its fall, it sideways between local support and resistance in confluence with the 13 EMA. By re-entering this red zone, the fight for a bullish leg would probably not be over. Indeed, there will be the EMA 25 to resume. This is in confluence with the horizontal level that we have identified for several weeks.

If it manages to resume this set of technical levels on the upside, we can probably envisage a return to the blue pivot zone with a return to the 200 EMA (black dotted line). However, if bitcoin continues to be weak registering new lows and highs lower than the previous one, it will strengthen my hypothesis of a return of bitcoin dominance to the green zone. At 40%, this area is not negligible and will probably act as support.

Ethereum is starting to lose slack against bitcoin?

Price of Ethereum against Bitcoin (H4)

Since last week, the situation has evolved since Ethereum failed to maintain the red zone which was formerly a resistance. Thus, the challenge is clear: get back to this level as quickly as possible. However, it broke the bullish momentum it was in. The EMA 13 and 25 are now resistance and the MA100 has been lost. From now on, let’s see if Ethereum will react on the EMA200 against bitcoin, which could be a sign of a rebound in the short term. If Ethereum breaks its recent low lower by also losing the 200 EMA, it will likely signal a return of the price to its support at 0.07 bitcoin.

Decentralized finance in a moment of weakness?

DeFi Index Perpetual Futures price on a daily scale
DeFi Index Perpetual Futures daily price (1D)

Today, let’s analyze an index of DeFi which is available on FTX. Bringing together a set of assets from this sector, it provides a certain approach to its dynamics, although it is not exhaustive. Recently, DeFi faced resistance and was rejected for the umpteenth time (red zone). Losing the confluence of the 13 and 25 EMA as well as the MA100, the price broke its uptrend. Is the downside reversal confirmed?

This would require a bearish retest of these same moving averages as well as a loss of the area in which the DeFi index is currently located. In this case, the price will probably return to 2458 dollars and then 1966 dollars. These are two levels where buyers will have to react if necessary to prevent a bigger drop in price.

Here we are at the end of this weekend crypto point. Now you understand the dynamics that have taken place this week and the changes that have taken place. We can see that altcoins were under resistance, Ethereum is starting to unscrew and bitcoin is regaining some strength. Of course, it will take more to leave Ethereum on the sidelines, especially since the narrative of the arrival of The Merge will probably bring volatility to the market.

Is it possible to be a winner every time? Whether the bitcoin price is in great shape, or going through turbulence, Coin Trading offers you to increase your chances of success. Indeed, Coin Trading allows individuals to access a trading tool algorithmic and 100% automated. Real trend mechanism, follow our affiliate link to test this tool designed to adapt to market reversals and position yourself on the most dynamic crypto assets of the moment.

Leave a Comment