Market Update 13.07.2018
Updated: Jul 13, 2018
Although we experienced higher prices a couple of weeks after bouncing of the mid term horizontal support level, we have since seen price fall as it came head to head with the 50MA.
Price was unable to penetrate the 50 day moving average. And since, BTC has seen a sell off, which is a negative sign. This shows that there is still a lack of belief in the market place. There is a good chance now that price will again test the $5800 USD level which is the nearest support. We would not be surprised at this point if the support level does not hold. Generally, the more times a support or resistance level is tested, it becomes weaker. So in this scenario we could see lower prices which are to expected given the current status of the market. This is in line with our shorter term expectations.
Bitcoin has sadly been the worst performing coin out of the top 5 coins by market cap in Q2. The best-performing coin out of the top 5 coins (by market cap) has been Ethereum, followed by Ethereum Classic, Bitcoin Cash and Ripple.
The green horizontal line on the above chart indicates the support line/zone. This is approximately near the $5800 - $6000 USD level. You can see from the chart that this has been tested on several occasions and held pretty well. However, the average trading volume over the past several weeks has been very low indicating that BTC is not being traded as much earlier in the year. Usually, consolidation periods are positive but with the perpetual FUD in the marketplace we have seen BTC react negatively.
The chart above (fig 2) is a close up of the daily chart which shows a possible short term head & shoulders reversal pattern. We are not convinced this will be a reversal due to reasons mentioned.
There has been some selling off in the last few days which is reflected in the overall cryptocurrency market capitlisation (see fig 4). As always, when BTC declines in price so do all other ALTs. There have been no major developments in the past few weeks to indicate higher prices. That said, CBOE which is the largest futures exchange, is reported to have filed for a Bitcoin ETF with the United States Securities and Exchange Commission (SEC). This is very positive. You can read more about this story here.
Realistically, we do not expect to see bullish signs at least until the end of Q3 or Q4 dependent on the SEC and the FCA outlining regulatory measures in the cryptocurrency space. Any major price movements before regulations are announced are likely to be short lived.
You can clearly see from fig 3 above that the 7 day heat map is pretty red. This is also true of the monthly and yearly map. As some have described there is blood on the streets. Others look at this as an opportunity to load up on cheap cryptocurrencies that they have missed out. While this is most likely true, some investors are beginning to get frustrated with how long the regulatory bodies have taken to thrash out some guidelines and are even considering selling up and cutting there losses due to a loss in faith.
The market cap of all crypto currency projects are well below the all time highs back in December. In many cases, they are well below 70 - 80% of the ATH price. It is no wonder why some investors feel the bubble has burst. Fig 4 above shows the top 10 cryptocurrencies by market cap all in the red today. The current crypto market cap is below $250 Billion USD. It is highly likely that this will plunge further if we hear no updates concerning regulation any time soon.
The Palm Beach group are doing an online event called The Great Cryptocurrency Conspiracy of 2018. We highly recommend you register and take part in this free event to find out the truth about what is happening behind the scenes in the this space. It will give you some perspective.
This is not financial advice and investing in cryptocurrencies carries very high risk. Be prepared to lose all of your money. Please do your own research and consult a financial advisor.