Weekly Bitpanda Pro market recap #72

Highlights of the week: 

• Consumer Price Index announcement leads to crypto market spike

• Bitcoin dominance plummets to 40.5%

• Crypto market sentiment hits highest levels since April

• Goerli merge successful, Ethereum outperforms Bitcoin

• Altcoins surge in line with improved market sentiment

Consumer Price Index announcement leads to crypto market spike

A major spike in the crypto market came after Wednesday’s US Consumer Price Index release revealed U.S. inflation numbers were lower than expected. Bitcoin and major altcoins surged after the report showed U.S. inflation was 8.5% year-on-year in July. This is particularly slower than the 9.1% pace recorded in June, which was the highest monthly increase in four decades. While the announcement may not be the most significant factor for Bitcoin traders, the short-term price action seems to have reacted quite positively to the news.

After printing a green candle in July, Bitcoin’s performance has further improved this month as the world’s biggest cryptocurrency continues to climb in the second week of August. Bitcoin has established an ascending range and is currently teasing the resistance level at €24,000.

The technical trend line for Bitcoin continues, with another higher low printed candle last week just above the €22,000 level – marking the bullish technical trend line. The resistance at the €24,000 area still holds and was tested for the third time. A tight range between €22,000 and €24,000 level can be described as an accumulation zone and the direction out of this range will be telling for the short-term outlook for Bitcoin. As long as the price action stays within this range, no breakout can be taken for granted as it would immediately be subject to a local failure and possible reversal.

Bitcoin dominance plummets to 40.5%  

With crypto prices slowly grinding upwards, volatility has been low recently. Bitcoin continues to underperform relative to altcoins with BTC dominance plummeting from a mid-June peak of 47% to 40.5% currently. As the market sentiment has improved, traders have been taking more risk and are increasing exposure to altcoins rather than Bitcoin.

Crypto market sentiment hits highest levels since April

The Fear and Greed Index shows crypto market sentiment is at its highest level since April, reaching 42 points this week. While this is still in ‘fear’ territory, it’s up 12 points from last week. Market sentiment has been steadily improving since hitting its bottom in mid-June after touching sub-10 numbers on the scale.

Goerli merge successful, Ethereum outperforms Bitcoin

The price of Ethereum noticeably increased last week and reached its highest price since May. ETH has been one of the best performers among the major assets and added a massive 20% to trade above €1,800 for the first time since May. 

The price increase is partly a result of the Goerli integration as Ethereum has passed the final test for proof-of-stake (PoS) merge. The event is the last testing phase for the eventual mainnet merge planned in September and Ethereum’s transition from proof-of-work (PoW) consensus to PoS. ETH has more than doubled in value since bottoming out at around €840 in June 2022 and continues to outperform Bitcoin. In the last 30 days, Ethereum has improved some 40%, while Bitcoin is up by 10% in the same period. Alongside its elevated returns, Ethereum has increased market dominance to 20%, which is the highest level since the start of the year.

Altcoins surge in line with improved market sentiment

AVAX, the 12th biggest coin by market cap, experienced a strong increase over the past 7 days, gaining some 25% to trade above €28, which is its highest price since late May.

This bullish move can be connected with a bullish break out of the falling wedge and the announcement of a partnership with Gamestar+ to bring interactive streaming games to Avalanche.

ADA’s price is on the edge of an accumulation channel in which it has been trading for over a month. On the price chart, the accumulation area is characterised by sideways price movement. RSI started to rise, indicating bulls are slowly gaining control.

AAVE performed an impressive 50% run in the last 30 days and now trades just over the psychological resistance of €100, which is the highest since late May. A breakout and confirmation above the €104 resistance level means that the next important level will be around the €125 price zone.

APE coin surged some 130% since hitting a bottom on June 15. The price is now hovering under the resistance level of €7.4 where bears are holding their positions. The trend is still pointing upwards, but higher-highs, higher-lows patterns need to stay in place.

DOT was one of the major movers in the top 10 tokens by market cap, gaining almost 20% at €9, which is the highest level since the start of June. Polkadot’s gains come partly from the partnership announcement with institutional investment company BitGo, which will offer Polkadot in their hot wallets.

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.