Crypto Weekly: Bankruptcies dominate the crypto market

Jul 18, 2022
14:07
2 min reading

Choise.com team

After enduring a tough first half of the year characterised by a significant sell-off, thecryptocurrency marketis recording minor gains led byBitcoin. The gains are highlighted by an increase in capital inflow toward the market.

As of June 17, the total global cryptocurrency market capitalisation was $906 billion, while on July 17, the figure stood at $977 billion, a growth of 7.83%, according to CoinMarketCap data.

Cryptocurrency market capitalisation. Last 30 days. CoinMarketCap.com

The gains have emerged despite leading cryptocurrency businesses restructuring their operations like opting for bankruptcy protection due the general market crash.

Crypto lending platform Celsius is among high-profile entities thathave filed for bankruptcy after suspending customer withdrawals. Crypto hedge fundThree Arrows Capitaland lenderVoyager Digital have also filed for bankruptcy.

Although the market is making short-term progress, the current state is a shadow of the gains from last year, which saw Bitcoin hit an all-time high of almost $68,000, with the overall crypto market capitalisation standing at over $3 trillion.

Bitcoin maintains gains above $20,000

In the last 30 days, Bitcoin has also struggled to sustain gains above the crucial $20,000, at some point slipping below the level. Over the period, the flagship cryptocurrency has made minor gains of about 1.5%.

Bitcoin price performance. Last 30 days. CoinMarketCap.com

However, investors are watching out for a possible extended rally as Bitcoin aids to stabilise above $20,000. Notably, the $30,000 level remains a key psychological point. Based on the current market conditions, itcan potentially hit the $30,000 mark in September.

The cryptocurrency market gains can be viewed as a bullish sentiment considering the ongoing high inflationary environment. U.S. inflation in June hit a record 9.1%, and the crypto market reacted instantly,losing about $15 billionin minutes.

Indicators for a market bottom

The focus is on whether the market has bottomed and if it’s ready for another rally. Although analysts appear divided on the market’s next course, crypto consultant at multi-asset brokerage exchange eToro, Glen Goodman,believes the recent negative headlines, especially in mainstream media, indicate a bottom.

Following the massive correction, some mainstream media platforms and analysts have suggested that Bitcoin and thecrypto market are dead, projecting further correction.

The negative headlines have also been fueled by significant losses incurred by investors, with several crypto-related businesses suspending key operations.

Furthermore, the sector has been hit with controversies like the Terra (LUNA) ecosystem crash that resulted in significant losses. Consequently, the incident appeared to have dampened trust in the market, especially with allegations citing the involvement of the network’s founder, Do Kwon, in the losses.

Overall, the marketcontinues to await the impact of any crypto regulations, with most jurisdictions citing the need to protect consumers while proposing several regulatory frameworks.

Bitcoin Analysis

Bitcoin price formed a base above the $19,200 level and started adecent increase. The price traded above the $20,500 resistance zone to move into a positive zone.

The price even gained pace above the $21,000 level and settled above the100 hourly simple moving average. A high was formed near $21,664 before there was a downside correction. The price traded below the $21,000 level, but the bulls were active near the $20,750 zone and the 100 hourly simple moving average.

A low was formed near $20,748 and the price is now rising. It broke the 23.6% Fib retracement level of the downward move from the $21,664 swing high to $20,748 low.

There was also a break above a short-term bearish trend line with resistance near $21,000 on the hourly chart of the BTC/USD pair. On the upside, bitcoin price could resistance near the $21,200 level. It is near the 50% Fib retracement level of the downward move from the $21,664 swing high to $20,748 low.

Source: BTCUSD on TradingView.com

The next key resistance is near the $21,500 zone. A close above the $21,500 resistance zone could set the pace for a decent increase. In the stated case, the price may perhaps rise towards the $22,000 level. The next major resistance sits near the $22,800 level.

Technical indicators:

Hourly MACD – The MACD is now gaining pace in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.

Major Support Levels – $21,000, followed by $20,750.

Major Resistance Levels – $21,200, $21,500 and $22,000.

Ethereum Analysis

Ethereum moved into apositive zoneafter there was a close above the $1,200 and $1,250 levels. ETH cleared the $1,320 resistance zone to move further into a positive zone.

The price gained pace and even climbed above the $1,400 level. It traded as high as $1,420 and settled well above the100 hourly simple moving average. Ether price is now consolidating gains near the $1,400 level. It is also trading well above the 23.6% Fib retracement level of the recent rally from the $1,196 swing low to $1,420 high.

Besides, there is a major bullish trend line forming with support near $1,325 on the hourly chart of ETH/USD. An immediate resistance on the upside is near the $1,420 level.

Source: ETHUSD on TradingView.com

The first major resistance is near the $1,450 zone. A clear move above the $1,450 level could send the price higher. The next key barrier is near the $1,500 level, above which the price gain more bullish strength. In the stated case, the price could rise towards the $1,580 resistance zone.

Technical Indicators

Hourly MACD–The MACD for ETH/USD is now gaining momentum in the bullish zone.

Hourly RSI–The RSI for ETH/USD is now above the 60 level.

Major Support Level – $1,350

Major Resistance Level – $1,450

Seeprevious week analysis

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