Kategorie: Crypto Analysis

• Ethereum forms two bullish flag patterns
• Both patterns’ measured moves indicate a new yearly high
• A move to $2600 would confirm the biggest bullish flag

The cryptocurrency market remains resilient despite the ongoing scandals that affect the industry. Investors still believe in the leading cryptocurrency’s potential; as such, Bitcoin, Ethereum,  and other coins trade close to their 2023 high.

Bitcoin made a new high for the year recently, but Ethereum did not. Hence, if Bitcoin is leading, then Ethereum should follow.

Interestingly, the technical analysis shows two bullish flag patterns. They both point to new highs for the year; any downside movement should be taken with a grain of salt.

Ethereum chart by TradingView

$2,000 offers stiff resistance

The market failed at the $2,000 level recently. Even though it made a new high for the year, the bears sold the round level, and the price quickly fell to $1,600.

But in doing so, it did not break the higher lows series. Also, two bullish flag patterns are visible, with measured moves above $2,000.

The biggest pattern, seen in black above, points to a move to $2,600. The smallest one, to a move to $2,200.

In both cases, it means that Ethereum will make a new high for the year, and the bias remains bullish as long as the price action holds above $1,600.

The post ETH/USD price forecast – a bullish flag hints at further strength appeared first on CoinJournal.

• A descending triangle pattern keeps the bearish bias alive
• Dogecoin fails to follow Bitcoin’s steps
• US data keeps surprising positively, making further rate hikes from the Fed very likely

Cryptocurrency investors were thrilled to see Bitcoin jumping back above $30k recently. It is Bitcoin that leads the cryptocurrency market, and hope has emerged that other cryptocurrencies will follow.

But it wasn’t the case for Dogecoin. In fact, the technical picture looks bearish, and the fundamental one keeps hinting at strong US data. Hence, if anything, the strong dollar will keep pushing against its fiat rivals, and the cryptocurrency market will take its clues from there.

Earlier today, the US GDP was revised higher. This was the Final GDP, and usually, there are no revisions to the data.

Only this time, the Final GDP came out much stronger than expected, at 2% vs. 1.4% expected. As such, the dollar rose across the board, and the Fed will likely hike the funds rate two more times this year, as suggested by Jerome Powell during this week’s speeches.

Dogecoin chart by TradingView

A descending triangle keeps the bearish bias alive

Dogecoin’s bearish trend continues as the series of lower lows and lower highs remains intact. All the previous spikes failed to break above the last lower high, so bears are still in control.

Only a move above $0.1 should shift the bias from bearish to bullish.

Until then, one can see a descending triangle pattern and it looks like it is only a matter of time until the horizontal support gives up.

Summing up, the bearish bias persists, and only a close above $0.1 will put bulls back in control. Until then, expect traders to sell any bounce.

The post Dogecoin technical analysis update – bears are still in control appeared first on CoinJournal.

• Solana price went vertical after the launch of deBridge.

• This feature will make it possible for Solana to communicate with EVM.

Solana price staged a strong comeback on Thursday as investors cheered a new bridge in the ecosystem. SOL jumped to a high of $18.21, which was much higher than this month’s low of $13.56. It was among the best-performing cryptocurrencies on Thursday.

Solana and Ethereum bridge

Solana is a leading blockchain platform that was once the biggest players in industries like decentralized finance and non-fungible tokens. At its peak, its DeFi ecosystem had billions of total value locked (TVL). All this came tumbling down following the collapse of FTX and Alameda Research. The two companies were among the biggest contributors to its ecosystem.

The main reason why Solana price jumped is the launch of deBridge feature that allows Solana to communicate with Ethereum. This is the first time that the two ecosystems can communicate with each other. 

They can also communicate with other Ethereum Virtual Machines (EVM) like Arbitrum and Optimism. Without this bridge, the alternative communication process is using wrapped and other derivative tokens. In a note, the founder of deBridge said that:

“Users and projects that needed to transfer liquidity to Solana have always faced limitations due to the lack of liquidity in Wormhole pools and high slippage during the exchange of the wrapped assets, which often made developers have to deal with non-liquid Wormhole assets.”

Solana price also jumped as signs emerged that the new management will relaunch FTX. As we have written before, the management is speaking with counterparties as it works to relaunch the exchange. It is not clear what this relaunch will mean for Solana and other companies that FTX had invested in like Near Protocol and Serum.

Solana price prediction

The daily chart shows that the SOL price has been under pressure in the past few months. This trend saw it drop to the January low of $13.35 this month. It has made a modest recovery and is now attempting to move above the 50-day moving average. It has also jumped above the resistance at $16.05.

The red flag I have with Solana is that this jump has not been accompanied by higher relative volume. Therefore, I suspect that it will be short-lived, which will see it drop to the support at $16. The only caveat for the bearish view is if Bitcoin stages a comeback above its year-to-date high of $31,400.

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• Bitcoin price found support at an inverse head and shoulders pattern’s neckline
• The measured move points to more upside for Bitcoin
• There is no significant resistance until the $48k level

Bitcoin’s price holds above the key $30k level, and the price action is bullish while above $25k. This is the level that offered support on the recent downward trend as the neckline of an inverse head and shoulders pattern rejected the price.

From a fundamental perspective, Bitcoin remains bullish while the US dollar’s bearish trend continues. While strengthening lately, the dollar’s move higher is not convincing, as reflected by the EUR/USD exchange rate still hovering around 1.10.

Yesterday, the Fed’s Chair, Jerome Powell, participated in a panel at the ECB Forum in Sintra. He was clear in saying that the Fed did not pause but skipped a rate hike in June.

While his comments were hawkish, so were the comments of other panelists, such as the Bank of England’s Governor or the European Central Bank’s President. Therefore, the dollar weakness may dominate markets during the summer months should investors perceive other central banks as more hawkish than the Fed.

Bitcoin chart by TradingView

Did Bitcoin bottom in late 2022?

One question is on every crypto investor this year – did Bitcoin bottom in late 2022?

Sure enough, the price action following the December 2022 low gives bulls hope. Bitcoin’s price action also suggests that a major bottom might be in place.

An inverse head and shoulders pattern points to more upside. The fact that the market retested the neckline and was rejected by it shows that bulls are still in control. In other words, the price action reinforces the bullish case.

Finally, now that Bitcoin’s price is at the year’s high, there is no significant resistance until $48k. This is the 2022 high, and it looks like the market is building energy to break higher.

The post Bitcoin price update – bullish inverse head and shoulders pattern points to more upside appeared first on CoinJournal.

Key Takeways

• Spot volume remains low and liquidity thin in Bitcoin markets
• Only 2.7% of the supply has moved in the last week; 7% has moved in the last month
• This compares to 7% of the total supply of Bitcoins which are likely lost 
• Uncertainty is high due to tightening regulation and the macro climate
• With institutions filing ETFs and launching exchanges, the liquidity picture may change drastically in the future

Market participants will know that if anything is true about the Bitcoin market over the last year, it’s that it has been incredibly illiquid. 

Market depth was thin anyway by the time November 2022 rolled around. Then came the FTX implosion and an Alameda-sized hole in order books. Bankman-Fried’s trading firm was also one of the largest market makers around, and market depth has never recovered since its demise. 

The effect has worsened in the last few months as a result of the regulatory clampdown in the US. We saw a host of market makers wind back operations in the US, including Jump Crypto and Jane Street in May (ironically, Bankman-Fried worked for the latter before founding Alameda). 

We put together a data dive on this back in March, but in looking at the balance of stablecoins on exchanges below, we can see 60% have left exchanges in just over six months, amounting to $26 billion. 

We can also see below that much of the volume earlier in the year was derived from Binance via zero-fee promotions. Once this promotion ceased, the futures-to-spot volume ratio jumped, highlighting that even that thin level of spot volume was propped up somewhat artificially by zero fees (chart via Kaiko).

Indeed, one of the (many) charges facing Binance is that the exchange engaged in “targeted wash trading” to increase volumes. Therefore, the shallow volume could be even shallower in reality. 

By now, we all know this. I want to take a moment to assess the supply side of the equation, however. From day 1, Bitcoin has possessed two qualities which make it ever-so-intriguing: a final capped supply of 21 million coins and a pre-determined schedule at which those coins are released (with the supply cap slated to be hit in the year 2140). 

As of today, 92.4% of the Bitcoin supply has already been released. By pulling some on-chain data, I have plotted below the percentage of coins which have moved in the last month against the total supply. This gives some indication into how many coins are moving due to trading activity. 

The chart shows 1.4 million coins have moved in the last month, equivalent to 7% of the circulating supply. In truth, one month is likely too broad a time horizon. Narrowing it to a (still conservative) one week in the next chart shows around half a million coins moving, around 2.7% on the total supply.  

These charts highlight further how few Bitcoins are actually moving around these days. In fact, if I can use one more chart to illustrate the scarcity at play here, let’s look at this next one which layers in an estimate of lost coins. These lost coins are estimated by Glassnode and are coins which have been inactive since before the launch of the first Bitcoin exchange in July 2010 (as coins from pre-July 2010 are spent, this estimate converges to the real number of lost coins; it’s not a perfect measure, but a good estimate). 

The chart shows that 7.5% of the total supply can be currently estimated as lost (Satoshi Nakamoto’s stash is included here). That means that it is roughly the same number as the amount of coins that have moved in the last month, and triple the number of coins that have moved in the last week. 

Therefore, only a small portion of the supply is moving for Bitcoin. On one hand, this sounds bullish – one oft-repeated mantra within the space is that a dwindling supply will inevitably lead to an uptick in price. But this is only the case if the thin supply is matched by an uptick in demand. 

When we look at order books and market depth over the last nine months, the shallow liquidity is a concern. However, there have been several important developments in the last two weeks that provide hope that this may change. Blackrock, the world’s largest asset manager, filed for a spot Bitcoin ETF, only to be swiftly followed by fellow giant Fidelity. There is also the launch of the exchange EDX, backed by trad-fi giants Fidelity, Schwab and Citadel.

Even the tightening regulatory noose around Binance could help provide a clearer picture for the future of the space and give investors confidence that something is finally being done to clean up the opaque nature of so much of the industry. 

In conclusion, it feels quite likely that we will be looking back upon these uber-thin liquidity conditions in awe in a couple of years’ time. Uncertainty is extreme right now, both with regard to regulation but also the macro picture. There will come a day when that won’t be the case, and things may be very different as a result. But as of right now, it’s thin out there.

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