This episode will look into the potential scenarios of bitcoin price movement after the halving. Will this dump start a reversal of the BTC price and we will see new lows or this was just a short squeeze and the price will hit the moon after the halving!
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Bitcoin is being dumped right before the bitcoin halving
Hello, guys. This is Wunderbit Trading and we are carrying on with our weekly Bitcoin and Ethereum price analysis. Let’s go straight into the content because the dump that happened during the weekend is all we’re caring about right now. So, as usual, in front of you, you can see four different charts and they are all related to Bitcoin. The one on the top left is the BTC futures, the one on the top right is the BTC dominance and the two at the bottom price for BTC/USD from different exchanges, Bitstamp and Binance.
So let’s start from the weekly overview, which you can currently see in front of you. And you can clearly see that on the spot market, we can see a dodgy candle appearing after the Sunday crash in terms of the cryptocurrencies. You can see that the volume spiked as well, obviously, because the crash happened during the weekend, we can see on the weekly that there is a small gap. However, if we go to daily candlesticks, you can see that this gap is much larger. It is almost 10 percent if we think about this.
And the price dropped and actually stopped at the 200 moving average, acting as a support. So let’s switch back all our predictions from the previous reviews and start our analysis.
Bitcoin Futures Price Analysis
As usual, we’re gonna start from the BTC futures on a daily time frame. So what we can see here is that the end of the week was quite optimistic for Bitcoin futures because we saw the breakout with a nice volume, a nice solid candlestick, and this happened on the 7th of May. And this was breaking the downward channel, the volume was picking up, so everything looked quite positive in terms of the BTC futures price.
However, during the weekend, on Sunday, in particular, there was a dump of Bitcoin and the price started trading on Monday next to the level of 200 moving average which is acting right now as support. So what to expect? As usual, we know that there is a 75 percent chance that this gap is going to be closed during this week. And if it is so, then there is potentially good profit to be made here, as I mentioned earlier, around 10 percent. And at the same time, if we go to the four-hour time frame, we can see that the price is currently below 50 MA, so there would be some resistance from 50 MA and also from this downward channel as well.
That is why we need to see another spike in the volume to actually close this gap. However, looking back to the daily, what we can see is that there is a potential scenario that during this week we’ll try to accumulate more in terms of bitcoins, the price will increase, but we might face the double top scenario here. So if the price is steadily going to rise, bounce slightly and then break through the resistance of 50 MA on the four hour time frame and also the resistance of a downward channel at the daily time frame, there is still now the new local high, which we’re facing as a resistance, and we might see this scenario of double top and the price will reverse and starts its retracement back in the downward channel. So this is scenario number one. And in this scenario, we’re closing the gap during this week but at the same time, we can see that the price is facing some strong resistance.
The other scenario is that we can currently retrace back to the level of 50 percent, at least, of Fibonacci retracement. So this will be somewhere around 7500, 7300 and then reattempt to find a new higher high, so there will be a retracement towards this area. And then we might see a small area of accumulation and only afterwards try to break it through. So this is the other potential scenario that we’re currently facing. It will depend on the bisection of today and tomorrow.
Currently, we don’t see any huge activity whatsoever. So the price is staying around the same area. Even if we go to the one-hour time frame, we’re still in a flat scenario where we would not be able to justify whether we go in further in terms of the retracement or we’re trying to fulfil the gap immediately.
So let’s look at the BTC dominance and once again, we’re going to start from the weekly time frame. The most important thing here is that it went in accordance with our predictions, so we went to form the double bottom over here. The BTC dominance smashed through the 200-day moving average as resistance with a nice solid candle. It carried on the 4th of May, so the second week in a row to go above the 50 MA as well.
So it seems like the BTC dominance will carry on increasing in the long term if our long term upward channel will be holding. What to expect here is that we would see some areas of resistance and obviously the previous high, so this is where we should expect to see some resistance for the dominance growth.
At the same time, we might see the retracement right now to check the 50 MA as support and start the upward movement in the BTC dominance from this area. So we should expect to see the BTC dominance decreasing to 66.3 and only then trying to carry on with the upward movement.
Bitstamp Bitcoin Price Analysis
So let me now look at the Bitstamp exchange and the long term scenario for the BTC. We’ll start from the weekly time frame. Currently, the price did not reach the strong resistance level, strong resistance trend which is coming from the peak of 2018 prices. And during the weekend, because of a dump, the dodgy candle was formed, so it showed indecisiveness of the market at this particular level.
The good point is that the candle closed right at the level of 50 MA as a support for the weekly time frame. So now it depends quite a lot on whether the price will carry on the retracement or the bulls will try to hold this ground and then try to actually go towards this level of resistance, which has come from the downward trend from the 2018 peaks. So let’s go to the daily time frame. What we can see here that during this dump on Sunday, the price touched the 200 MA acting as a support. Currently, there is not much going on in terms of the actual movement. It seems like everyone is currently waiting, whether another big move will be in either of the directions. But at the same time, there are a couple of important things that I wanted to share with you.
First of all, the volume during this downward movement, and it seems like we are coming to the same levels of this bottom and this accumulation. So if they are similar, we may assume that this is the face of redistribution which is starting right now. So it seems like the positions which were bought during this dump in March, they’re currently closing. At the same time what we should expect from this phase is that we might end up in a horizontal channel, which will be from these bigs to these bottoms, where the price will hold for some time. We might see some resistance when the price will come towards the area of 10000 but the most important level would be 10500, so somewhere in between those two levels, we should expect some strong resistance and, obviously, the big volumes coming in due to the redistribution of positions.
So the long term predictions currently are that we might see the horizontal movement of Bitcoin in between those prices for some time. This first movement, an upward movement, will go in accordance with the closing of the gaps on the BTC futures. So this is one thing in favour of the upward movement in the short term trend this week. The other scenario which is possible is obviously the retracement that we should keep in mind. So if we are talking about the retracement of the overall upward movement that we saw from March, then the rough estimation would be the proper retracement of 50 percent will end up in the region of 7000 dollars for the BTC. However, going for that, we need to break the 200 MA, the 50 MA, which both are acting as support right now. Based on the RSI, we can see that it is now recharging, so that is in support with the short term retracement.
Binance Bitcoin Price Analysis
However, let’s go to Binance and look at the short term time frame, so starting from four hours, what we can see here is obviously the very sharp decrease in the price of Bitcoin starting from the 8th of May, so during the weekends, we saw this dump which broke the 50 MA, and it’s now acting as a resistance. At the same time, if you go to the hourly time frame, not much is actually happening right now. We can see the slight divergence on the one-hour time frame so the price was decreasing while the RSI was increasing, however, we can still see that we’re currently stuck in that channel, and the breakout of this channel will determine whether, in the short term, the price will go up or go down. So currently we are just monitoring the situation.
There is probably the link with the bitcoin halving, which is going to happen quite soon, and that is why the market is currently very quiet and indecisive. So the market is waiting for someone from the big movers to make their first move.
Binance: Ethereum Price Analysis
Okay, let’s go to Ethereum right now. And as usual, in front of you, you can see the Ethereum uses the T price chart from Binance. And we’re looking at the weekly time frame. So I will switch all our predictions from the previous reviews off and we’ll see what actually was happening during the previous week.
So, once again, we saw a very nice and steady increase in the price of Ethereum going consecutively up for five weeks in a row. However, the previous week, due to the weekend dump closed below the 50 MA, the volume was as good as the previous week, so we can see that the Ethereum is trading quite nicely in terms of the volume. Let’s look at the daily scenario and at the same time we’ll switch back our predictions from the previous reviews. First things first, there was a bit of accumulation in this area as we determined last time. We saw that the price went here twice, so that was the first shadow and this was the second week that touched this accumulation zone based on the volume. And then we saw a nice increase and a nice spike, however, the price could not move any higher. So if you entered the position here, this would be a nice area to actually close it. And on a more local time frame, you could have actually seen this. So we broke the 50 MA with a nice volume and nice candle, so we were expecting in the price to go higher, however, we saw a very tight resistance, so you can see that the price is struggling quite a lot to go through. And on this second attempt, in particular, that would have been a good point to determine that the price is not going any higher and to exit the position.
So this would mean that you would get a profit of around 7 percent if you did that. Once again, what to expect here is, first of all, we broke down below the upward channel. That is quite important. So on the one hand, it looks like the trend is starting to reverse. We can see the lower high was formed so we can roughly put it like this at this particular moment. What to expect is we need to see the retracement of the drop. If we assume that we’re starting a downward channel and at the same time that the BTC dominance is actually increasing, so the less attention will be paid to altcoins, what to expect is the price can go back towards the upward channel, but if we will not be able to break the 50 MA, it will act as a resistance and we might see the beginning of the downward movement. So, this would be quite important for this week in the Ethereum price to either try to go back into the upward channel and try to break the resistance levels which formed or to start its descent and start its replacement.
The long term, if we think about the retracement, once again, we can draw the Fibonacci retracement tool and the golden pocket will be around the first accumulation zone which is between 135 and 140 US dollars. At the same time, let’s look in the history a bit, how it was actually working. So, for example, we can take the previous huge move to the bottom and you can see that the price started its reversal right at this area of the golden pocket between 61 and 65 percent of Fibonacci retracement. So, if this is something similar, which may occur, then the long-term analysis for the downward trend could be that we can see the price going back towards the area of accumulation, so between 135 and 140 ETH/USDT.
Once again, the overall conclusion that for this week, at least for Monday and Tuesday, we’ll just monitor the market will look where the price will go. We’ll see if this price can be confirmed by any large volume movements, so if we can see any large bulls or bears participating in the market to determine the direction of the further price movement. And only then we’ll make sure that we’ll follow one of the scenarios described in today’s review.
That was it for this week. Thank you very much for watching, guys. Please subscribe to our YouTube channel and smash like button if you like the content. Also, subscribe to our Telegram channel to receive the daily reviews of BTC and Ethereum prices. Best of luck with your trading.
EOS: Why there’s a question mark attached to its long-term trajectory
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
The lack of buyers for EOS has certainly hurt its price progression on the chart. Facing strong competition from the likes of Solana, Cardano, and Ethereum, the smart contract operator has gone relatively unnoticed since the wider crypto-crash on 19 May. This was evident from its recent trading volumes which were nowhere near levels seen during its run-up to May highs.
While a bullish pattern did attempt to change this situation, 7 September’s flash crash came at an unfortunate time. Since then, while EOS did regain some lost ground, it was yet to fully convince observers of a speedy recovery.
At the time of writing, EOS was trading at $5.27 with a market cap of $4.94 billion.
EOS Daily Chart
A falling wedge breakout in early September set EOS for higher price levels but 7 September’s flash crash played spoilsport. Since then, EOS began to take shape within a bear flag which presented chances of a breakdown. A close under the daily 20-SMA (red) and the $4.8-support would set EOS on a southbound path below 7 September’s swing low of $4.15.
The support areas of $4 and $3.5 would look to stem further bleeding in the market.
To shatter this outlook, EOS would need to register a close above $5.7 on strong volumes. This would allow the digital asset to target previous highs formed at $6 and $6.4.
Now, the Relative Strength Index has been forming higher peaks over the past week and a half – A positive sign. However, the index is yet to assert itself in bullish territory. In a weak market, the RSI normally finds resistance between 55-60 and drops lower once again.
Similarly, the MACD was inching higher but at a relatively slow pace. A bullish outcome cannot be expected till the index rises comfortably above its half-line. The On Balance Volume presented a wider picture. According to the index’s downtrend, sell volumes have been higher than buy volumes over the past month.
Since EOS was trading within a bear flag pattern, a breakdown can be expected going forward. In such a case, expect buyers to respond at support levels of $3.5 and $4. To overcome this situation, buyers need to maintain EOS within its current pattern. This would heighten the chances of a break in the opposite direction.
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EY Taps Polygon Network to Improve Enterprise Clients’ Experience
Major multinational professional services company Ernst & Young (EY) announced the adoption of the Polygon protocol for the deployment of its blockchains to provide faster transactions and lower costs for its enterprise clients who transact on the Ethereum mainnet.
EY Clients Can Now Access Polygon Network
The “Big Four” consulting firm stated in the press release from earlier this week that it has integrated its flagship blockchain services such as EY Blockchain Analyzer and EY OpsChain into Polygon’s permissionless commit chain, making it easier for clients to access the latter’s network.
Increased transactions happening on the Ethereum network have led to congestion and higher costs. Meanwhile, EY believes that connecting to Polygon’s commit chain solutions will provide the company’s enterprise clients with “increased transaction volumes with predictable costs and settlement times.”
Commenting on the latest development was EY’s Global Blockchain leader, Paul Brody, who said:
“Working with Polygon provides EY teams with a powerful set of tools to scale transactions for clients and offers a faster roadmap to integration on the public Ethereum mainnet. We discovered our shared priorities around open system and networks and the Ethereum ecosystem would make collaboration in this area much easier.”
Polygon co-founder Sandeep Nailwal also made a statement, saying:
“The EY commitment to the public Ethereum ecosystem and to open standards was a big driver in evolving shared approaches. No other organization has made the same scale of commitment to the ecosystem and to open systems, or brings the depth of technology that the EY organization has in this space.”
Also, both EY and Polygon are working towards developing “permissioned, private industry chains” that would utilize Optimistic rollups, which enable cheaper transactions and robust efficiency.
More Partnerships for Polygon
Polygon, a layer-2 scaling solution for Ethereum, continues to be one of the widely adopted blockchains. In July, US-based cryptocurrency exchange giant Coinbase connected its wallet mobile app to the Polygon network.
Formerly known as Matic Network, the protocol was rebranded to become Polygon back in February 2021. Later in June, the Ethereum scaling solution announced that it was planning to launch an all-purpose blockchain network for standalone chains, sidechains, and other Layer-2 solutions, called Avail.
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Sorry, Everyone. Walmart and Litecoin Have NOT Formed a Partnership
Walmart has been making a real name for itself in the crypto space. Many analysts were thrilled when the retailer announced not too long ago that it was looking to hire a crypto product specialist for its new blockchain division, suggesting that the firm was following in the steps of Amazon, one of its biggest competitors.
Walmart and Litecoin… If Only!
According to a recent news release, the company had engaged in a partnership with leading altcoin Litecoin, which emerged in the year 2011 following a hard fork of bitcoin, the world’s most popular digital currency. Following the issuance of the release, crypto fans celebrated on social media platforms and the price of Litecoin shot up by as much as 20 percent. It seemed like the asset was unstoppable… until it was revealed just moments later that the release was a hoax, and no partnership of any kind had been formed.
The initial nature of the press release was that Walmart would accept Litecoin for payments. Already, one had to assume that something was a little fishy about the statement. The company made no mention of bitcoin, meaning it was allegedly not willing to accept BTC – the largest and most powerful crypto asset in the world – but was willing to give the greenlight to payments initiated through a smaller competitor? That doesn’t make a whole lot of sense when one puts two and two together.
Either way, it looks like the release was widely distributed and believed before Walmart could get the news under control. At the time of writing, it is unclear who issued the release or who wrote it. It is also not clear how the news came about, though Walmart has explained on its website that it is now looking into the matter while also assuring its customers that there is no partnership whatsoever between it and Litecoin.
A Walmart spokesperson explained in an interview:
We are digging into it further to understand what happened.
The situation seems innocent enough. After all, if the perpetrator is found out, all he would have to do is issue an apology and promise never to do anything like that again, right? Well, as it turns out, situations like these can wreak havoc on the allegedly issuing company, in this case Walmart. As the retailer is a publicly traded business, Walmart could potentially face liabilities from organizations and agencies such as the Securities and Exchange Commission (SEC), which could open its own investigation into the company to discover what happened.
This Can Be a Serious Problem
Speaking with The New York Times, Andrew Calamari – a lawyer with Finn Dixon & Herling and a former securities director with the SEC’s New York office – mentioned in a statement:
It is a misrepresentation involving a public issuer.
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