The Daily Cryptomenon
31st August 2020
Your daily Cryptocurrency Market Analysis News brought to you by the CryptoAltum Cryptomenon Team.
This analysis was written at 9:00 am GMT +3, on 31.08.2020
Was it only a matter of time before the bearish pressure that was accumulating on the crypto market dissipated, or was it more of bullish resilience that caused the market to find its mojo and head on to break important resistances? We start off the week with just that question in mind as all the cryptos have managed to bounce off important supports and end up higher. With that said, let’s find out what today holds for the Cryptocurrencies on August 31st, 2020.
Cryptocurrency Recap
During the month of August, our Cryptocurrency trio - Bitcoin, Ethereum, and Ripple have moved in quite the erratic manner. One time they’re testing these pesky resistances, the other trying to break below those mighty supports that held any kind of movement lower for the past month. It’s been quite the ride, especially when considering that August is a dead month in most markets. Bitcoin is currently trading around the 100 SMA (Simple Moving Average) after managing to break above the $11,600 resistance. Ethereum rallies in quite the move, breaking above the $400 level but seems to have stalled around $430. Ripple follows suit in the upward movement breaking above $0.2800 and currently trades just barely above this level.
Bitcoin (check out the chart below you’ll find that Bitcoin is the purple line) continues to print a positive performance of 6.15% on a month-to-month basis* considering the immense pressure it’s been under. Ethereum (red line) breaks away from the crowd and explodes higher as we’ve become accustomed to. It records a performance of 29.09% on a month-to-month basis. Ripple (orange line) follows in the footsteps of its cousins and moves higher. recording a performance of 16.91% on a month-to-month basis.
*Please note that we mention month/on/month we mean the same day, one month ago. For example, 29th of July till the 29th of August.
What’s the strategy you’re going to use when it comes to these cryptos? Do you believe that the Bears have lost control of the markets? Or do you believe that this whole move was just a correction and it was only a matter of time before the Bulls rose to the occasion? Whatever you choose to believe, you can react to it all on CryptoAltum.
Bitcoin Has Been Dethroned
It wasn’t much of a surprise when Bitcoin managed to break above some of the barriers discussed in our last blog post. These levels included $11,400, $11,500, and $11,600. Bitcoin even managed to reach $11,700, however, the lack of momentum didn’t allow the Cryptocurrency king to break above the most important barrier at $11,800. At time of writing, the slightest correction on BTC can be spotted, but the Bulls remain in control of this market so far, as they’re working extra hard to keep the price above the first support at $11,600.
In other news, Bitcoin is no longer considered to be the world’s most expensive cryptocurrency, neither is it the digital asset that hit the highest all-time high thanks to the decentralized finance (DeFi) darling, Yearn.finance (YFI). The weekend was particularly yielding for this token as it rocketed to trade at a new all-time high of $38,983. At the time of writing, YFI has retreated to trade at $31,125 as it seeks support above $30,000. Is the king in danger of being dethroned by this crypto?
Bitcoin is technically in the hands of the Bulls despite suffering rejection slightly above $11,700. The Relative Strength Index (RSI) seems to be sending the same signal as it breaks above the 60-level and seems to be printing around that level. This could be highlighting that BTC might continue to move higher but at a cooled down pace. With the presence of some formidable support areas, buyers can comfortably focus on breaking above $12,000 in the course of this week. Apart from that, other levels of good buyer congestion include the 50 SMA, $11,400 and the primary support at $11,100.
Ethereum Meets $400 Again
Ethereum has extended the bullish leg above $400, this move was the needed push to disapprove all negative predictions in the mainstream media. Last week, Ethereum tumbled to $370 twice. The first recovery hit a wall marginally above $410. On other hand, trading before the weekend session was mainly lethargic as discussed with Ether holding above $380 and unable to overcome the hurdles at $390 and $400.
However, the impressive trading action over the weekend pulled ETH not only above $400 but also up to $420. The price brushed shoulders with $430 before falling slightly to seek balance at $425.
Sideways trading appears to be the dominant trend as reflected by the RSI. This indicator has abandoned the majestic weekend action to higher levels and currently holds above key levels. For instance, the RSI is moving horizontally at 70 (overbought), there’s a minor bullish divergence above it that puts emphasis on ETH’s bullish case to levels above $430. The overbought levels highlighted by the RSI (at least in the short term range) must also be ignored in favour of the great price of trading past $500.
Ripple Breaks Above $0.2700
Ripple embarked on an upward roll after plunging further under $0.30 to test support at $0.26. The third-largest Cryptocurrency by market capitalization has, on multiple occasions in August, been purged from highs above $0.30. A monthly high traded at $0.32 marked the end of the bullish action towards $0.40 and paved the way for losses under $0.30.
Following the support at $0.26, XRP commenced an intriguing recovery towards $0.30. The initial break above the descending trendline boosted the price farther up. Ripple has hit highs above $0.28 before stalling just before the 100 SMA in the 4-hour range. Glancing upwards, more hurdles are envisaged at $0.29 and of course, the psychological resistance at $0.30.
For now, the trend remains in the hands of the Bulls, supported by most of the technical levels. The RSI is just under the 70 overbought level, building on the consistent recovery from oversold levels recorded on Thursday. A break above $0.29 and $0.30 would most likely propel XRP above the critical $0.3250. On the flip side, initial support is expected at $0.28 in the event a reversal comes into the picture from the prevailing price levels. Other lower support areas include $0.27 and $0.26.
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