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Crypto Technical Analysis Report | 29th-July-2022


The crypto market rocketed Thursday as the Federal Reserve hikes interest rates in line with market expectations. Many market observers believed markets had already priced in the Fed’s rate hike, which the bank has been announcing for over a week. Powell’s comments about “no recession” also supported sentiment. Major crypto tokens traded significantly higher on Thursday. However, the total volume of transactions increased by more than 49 percent to almost $92.43 billion.

Bitcoin’s (BTC) price has been stuck in a descending channel since July 20 and it is currently heading towards the late July support of $20,000. Adding to this bearish price action, BTC is down 50% year-to-date, while US-listed tech stocks, as measured by the Nasdaq 100 index, are down 24%. Bitcoin (BTC) regained further lost ground at the  Wall Street open on July 28 amid confusion over whether the United States had entered a new recession. Bitcoin (BTC) consolidated higher through July 28 after changes in U.S. monetary policy boosted optimism about risky assets. Meanwhile, on-chain analysis resource Material Indicators noted what it called a “strong long signal” at the daily close, something that was about to amplify the short-term bullish case. Open interest for Bitcoin options monthly expiration on July 29  is $1.76 billion, but the actual number will be lower as bulls were surprised when BTC broke the $24,000 resistance on July 20. July could not break through. reflects  $950 million of call interest outstanding versus $810 million of put options. 

Ethereum network developers confirmed September as the date of the next merger, a move that prompted traders to invest heavily in ETH. Ether (ETH) 53% rally between Jul 13-18 gave the bulls a head start on July’s $1.26 billion monthly options expiry. The move came as Ethereum developers set a tentative date for the “merge,” a transition away from the cumbersome Proof-of-Work (PoW) mining mechanism. By eliminating the additional ETH issuance used to fund the energy costs required in the traditional mining consensus, Ether could finally achieve “ultrasonic money” status, according to some analysts.  On July 26, a sudden and dramatic spike in active addresses on the Ethereum network sparked multiple speculations as to whether Ether is targeting its previous all-time high. It has been reported that the number of 24/7 active addresses reached 1.06 million, breaking the previous 2018 peak of 718,000. The main casualties of Ether’s impressive 20% rally on July 27 were leveraged bear traders (shorts) who had liquidated a total of $335 million on derivatives exchanges, according to data. 

As the US Federal Reserve tightened economic policy by raising interest rates and reducing debt purchases, risk assets have reacted negatively. Fed Chair Jerome Powell will conclude a two-day meeting on July 27 and market analysts expect a 0.75% nominal rate hike. Tensions are rising in Europe as Russia’s state-controlled gas company Gazprom is set to halt supplies to the Nord Stream 1 gas pipeline from July 27. Technology stock performance on July 27 contributed to the passage of the US Senate’s Chips and Science bill, which would provide $52 billion in debt- and tax-supported subsidies to the United States.S. Semiconductor production. Another US$24 billion in loans is planned for the sector to boost research to compete with China. For these reasons, traders have mixed feelings about the upcoming Fed announcement and the impact of a global crisis on the cryptocurrency markets. As long as Bitcoin’s correlation with traditional markets remains high, particularly tech stocks, investors will seek protection by moving away from risky asset classes like cryptocurrencies.

Technical Outlook:


BITCOIN:

Bitcoin Chart | 29th July 2022
Bitcoin Chart | 29th July 2022

BTC after making a low of $17,567 started consolidating in a broad range from $18,000 to $23,000. During this consolidation period, the asset formed three bottoms with ‘Higher Highs and Higher Lows’ indicating a reversal. BTC finally gave a breakout above the range and made the high of $24,287. Post this move, the asset made a ‘Bullish Flag’ pattern, and yesterday it gave a breakout and closed above the $23,500 (Horizontal Trendline). BTC tested the recent highs of $24,287.  If the price sustains above the support and crosses the recent highs then we can expect BTC to further rally up to $28,500.

ETH:

Ethereum Chart | 29th July 2022
Ethereum Chart | 29th July 2022

ETH after making the low of $881 started trading in a range from $1,000 to $1,275. The asset finally gave a breakout on the upside and the prices rallied up to $1,665. Post this move, the prices consolidated and witnessed some profit bookings. The prices retested the support ($1,300 & 20-day moving average) and resumed the up-move. ETH is trading at its key resistance level of $1,700-$1,750. Once it sustains above these levels then we can expect it to further rally up to $1,950- $2,000.

MATIC:

Polygon (Matic) Chart | 29th July 2022
Polygon (Matic) Chart | 29th July 2022

Matic made a ‘Cup and Handle’ pattern at the bottom of $0.31 with the neckline of $0.63. After giving a breakout above the neckline it rallied up to $0.9849. Post this move, the asset witnessed some profit booking and started trading in a ‘Falling Channel’. Matic made a ‘Hammer Candle’ at the support (lower trendline of the channel and its day moving average) and started moving up. The asset has stiff resistance around the psychological level of $1 and its 200-Day Moving Average. Once the resistance is broken with good volumes then we can expect it to further rally up to $1.20.

Weekly Snapshot:

USD ($) 21 Jul 22 28 Jul 22 Previous Week Current Week
Close Close % Change High Low High Low
BTC $23,165 $23,844 2.93% $23,388 $22,431 $24,295 $20,777
ETH $1,472 $1,725 17.22% $1,595 $1,472 $1,775 $1,363
MATIC $0.91 $0.94 3.16% $0.92 $0.80 $0.99 $0.73
Cryptocurrency 1w – % Vol. Change (Global)
BitCoin (BTC) -9.76%
Ethereum (ETH) -6.53%
Polygon (MATIC) -24.78%
Resistance 2 $32,500 $2,400 $1.20 $0.60
Resistance 1 $28,500 $2,000 $1.00 $0.45
USD BTC ETH MATIC BAT
Support 1 $23,000 $1,700 $0.75 $0.33
Support 2 $20,000 $1,300 $0.63 $0.25

Market Updates:

  • Cryptocurrency exchange Kraken is under federal investigation for potential violation of US sanctions by allowing users in Iran and elsewhere to buy and sell digital tokens
  • Three funds of Cathie Wood’s Ark Investment Management sold a total of more than 1.4 million shares of Coinbase Global, the crypto exchange said in its daily trading update email.
  • Nirvana Finance, a Solana-based yield protocol, suffered a $3.5 million exploit utilizing flash loans to manipulate and drain its liquidity pools, blockchain data shows.

Disclaimer: This report is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation, or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate. The Company has prepared this report based on information available to it, including information derived from public sources that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness, or reliability of the information, opinions, or conclusions expressed herein. This report is preliminary and subject to change; the Company undertakes no obligation to update or revise the reports to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. Trading & Investments in cryptocurrencies viz. Bitcoin, Bitcoin Cash, Ethereum, etc are very speculative and are subject to market risks. The analysis by the Author is for informational purposes only and should not be treated as investment advice.



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