By Analytics Team, Giottus Cryptocurrency Exchange
The past week has been a volatile one for the crypto market as Bitcoin (BTC) dropped from $36,000 levels to $29,000 mid-week before regaining most of the losses later. BTC was trading at $31,000-32,000 – a key support range that can determine the next few weeks of activity in the cryptocurrency market.
Most altcoins followed BTC through the week with no standalone breakout. In this volatile scenario, traders are likely to avoid leveraged positions.
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BTC dropped below $30,000 mid-week amid concerns with China’s clampdown on BTC mining rigs as well as lack of support from top institutions. JP Morgan strategists believe that overall signals continue to be bearish for BTC. About $6 billion worth of options expired on Friday, triggering an 8 per cent drop in the market overnight.
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BTC has been exhibiting the Wyckoff pattern since early January and is now possibly entering a growth phase. Breaking out from the $42K barrier will be key for a full-blown bullish divergence. Altcoins can grow disproportionately if that eventuates.
In adoption news, Paraguay is set to become the second country to propose a bill to authorize Bitcoin as legal tender after El Salvador. On Friday, El Salvador announced that they would distribute $30 worth of Bitcoins to every adult in the country. BTC will become legal tender in El Salvador on September 7. The country has already seen many developments in the field of cryptocurrency, including 1,500 BTC ATM machines, geothermal BTC mining, and foreign investments in the country.
Microstrategy, the largest institutional buyer of BTC, added another $500 million worth BTC to its portfolio earlier in the week.
BTC: Technical Analysis
BTC has been creating lows in smaller time frames (4H) all week and is comfortably in an ascending channel (long term bearish pattern). But on a lower level, it is a descending channel (long term bullish). The coming days will be decisive for BTC to go sideways for a while or continue in a descending channel and then break out of it, resulting in a bullish divergence.
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