Weekly Bitpanda Pro market recap #68

Highlights of the week:  

• Crypto market still ranging with negative sentiment

• Bitcoin losing dominance as its price falls

• Fear & Greed Index remains in extreme fear

• Ethereum struggles to recover

• Major altcoins ranging in patterns before breakouts

Crypto market still ranging with negative sentiment

As global turmoil and recession fears still loom large, the week started with a sell-off and gains from early July were swiftly erased. Bitcoin briefly declined below €19,150 after a promising performance at the start of last week but remains within its €19,150 - €22,000 consolidation range. The crypto market is flooded with bearish sentiment and negative information that drive the market. The U.S. Consumer Price Index soared to a record-high 9.1% in June, exceeding expectations of an 8.8% rise year-on-year. The U.S. dollar recently hit its highest level since October 2002, as the dollar strength index reached a 20-year high and the USD/EUR pair reached parity for the first time since 2002. Investors are still processing this information, suggesting an economic downturn. The Russia–Ukraine war continues to bring fear, uncertainty and doubt. The past seven days saw the total cryptocurrency market cap fall towards the €900 billion mark, down some €80 billion from the week before.

Bitcoin losing dominance as its price falls  

The Bitcoin price saw a brief pull-back following the high inflation report, but the market rebounded soon after, suggesting that buyers are buying the dip. Bitcoin dropped to the dynamic support line of €19,150, then bounced back to €20,000. Buyers are trying to defend the €19,150 level, but the long wick on the July 13 candlestick shows that the bears are selling near the 20-day exponential moving average (EMA). Both moving averages are sloping down and momentum indicators like RSI and MACD are in the negative zone, indicating that bears are in command.

Bitcoin’s dominance continues to decline. Though it reached 48% on June 11, it has since plummeted 43.5%. While this fall typically indicates a market with a high-risk appetite, with the current low sentiment market, this results in falling prices.

Fear & Greed Index remains in extreme fear

The sentiment in the crypto market continues to be significantly affected by a steady flow of negative news and the Fear and Greed Index indicates market sentiment remains in extremely fearful territory. The index has seen a slight improvement in recent days, moving from 14 last week to a peak of 22 and now settling at 18 this week. However, this still indicates an extreme fear zone, which has been present since the start of May - the longest period of extreme fear ever recorded.

Ethereum struggles to recover

Ethereum fell back to the support line after a failed attempt to break above the €1,250 resistance level. The price is now holding above the major support line, but with momentum indicators still in bearish territory. Momentum indicators are in oversold territory, making a possible turn to the upside on a higher time frame. On a lower time frame, ETH is maintaining higher high, higher low formation, indicating bulls are slowly pushing the price to the upside.

Like BTC, ETH continues to underperform as indicated by a decline in ETH dominance from almost 20% in May to 15.2% at the time of writing. Ethereum's relative underperformance may be caused by selling pressure from lending platforms which are struggling in these market conditions.

Major altcoins ranging in patterns before breakouts

ADA is moving choppy in the intraday chart between support of €0,42 and resistance at €0,48. Bearish sentiment is still prevalent due to the overall macro picture. Cardano passed a major milestone on July 12, when smart contracts based on Plutus totalled 2,900. The Plutus update brought several advancements to the Cardano network, including a DeFi app development platform.

DOT has been moving inside of the falling wedge for the past two months. Overhead resistance is still too strong for breakout due to bearish sentiment, while momentum indicators are showing a mixed picture. Bitcoin will lead the overall market and DOT will follow in any direction. Despite a sluggish macro-environment, Polkadot’s on-chain activity was growing. During Q2 2022, Polkadot had roughly 435,000 users, 878 million DOT tokens transferred, and a consistent staking rate of 54% to 56% of total DOT tokens staked.

SOL is bouncing above the €32,4 support zone and on the lower trendline of the smaller triangle pattern. The price is reaching close to the end of the triangle, indicating the possibility of a breakout within the next few days.

AVAX turned down from the overhead resistance at €20, indicating that bears continue to defend the level aggressively. Momentum indicators RSI and MACD are slightly bearish and point to a possible consolidation in the short term. The first sign of strength will be a break and close above €20 level.

Have you been following Bitcoin’s price development or the smaller caps’ formations and want to act on the market moves on the go? Make sure you trade using our Bitpanda Pro iOS and Android apps. For a convenient trading experience from your computer, you can also rely on the traditional Bitpanda Pro crypto exchange.

Disclaimer This content is for informational purposes only and is not to be taken as financial advice. We highly recommend taking the time to do the necessary research before making any investment. Be aware that past performance is no indication of future results.