Weekly Recap: Bitcoin Above $11,500, Ethereum Above $380This week for the cryptocurrecy market has been marked with sluggish dynamics. The two cryptos with the largest market valuation Bitcoin and Ethereum have been trending down, only Ethereum suffering much more capital losses than Bitcoin: -10.3% for Ethereum and -2.5% for Bitcoin.
Bitcoin has not broken the uptrend, though, and is continuing its ascension. On Saturday, 22 August, Bitcoin slightly rebounded off the weekly support level at $11,574 thus keeping it intact. Despite falling sharply, Ethereum has not breached its daily $378 support level either, allowing us to consider the ETH uptrend still running on.
How the week went for Bitcoin
Last week started for Bitcoin with a sharp surge on Monday in one 4-hour candlestick. Then the weekly high was made and the cryptocurrency began slowly slipping down henceforth. The first significant hurdle to that downslide was found on Wednesday, 19 August, when the price of Bitcoin reached the supporting trendline for Bitcoin’s local ascension move that began on 27 July.
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The market leader rebounded slightly off this trend line, reaching above the 50-period SMA on the 4-hour chart and daily level at $11,862. But the upside move was small and short-lived, as a result BTC/USD slumped below the supporting trendline on Friday, 21 August.
On Friday, the pair finished below the $11,574 resistance level at $11,503, but rebounded back above it on Saturday. We thus may state that the fact the $11,574 resistance is keeping up Bitcoin’s upside trade, and the uptrend has not yet been reversed, judging by the graphic pattern formed. However, the dip below the 20-period and 50-period SMAs increases potential downside risks.
How the week went for Ethereum
Ethereum started off this week with a moderately paced downside move that continued through Wednesday. There was a modest rebound on Thursday, however accompanied by a downside convergence of the 20-period SMA over the 50-perod SMA on the 4-hour chart. The pair was trending down until it almost touched the $370 daily support level on Friday. On Saturday and Sunday ETH/USD basically traded flat, staying above $390 most of the time.
The week has been negatively marked for Ethereum by a failure on the testnet Medalla built for Ethereum 2.0 proof-of-work on 18 August. One of the six servers on which Medalla runs reported the time as being one day ahead of actual time. The system averaged out the time discrepancy by shifting the time on all servers by 4 hours ahead of the present. As a result, “validators incorrectly proposed blocks and attestations for future slots,” as per Prysmatic Labs’ official report. The glitch in the system took most of the network’s validators offline.
On that day Raul Jordan – Prysmatic Labs’ editor – wrote in his blog that Prysmatic Labs believed, ‘this incident does not inherently affect the launch date.’ On August 19, the testnet was running again though not yet in a stable manner on a number of accounts. Still, the incident produced a notable effect on the trade of ETH/USD with the week’s biggest losses registered on the 18th and 19th August.
Forecast for this week
Bitcoin’s uptrend is under the threat of a downside reversal. The key support level of $11,574 is in the market’s focus. The space between the weekly support and the daily resistance levels is very small for a week’s time, and the price of the BTC/USD pair is unlikely to remain within its boundaries this week, however, there may be false breakthroughs that will ultimately let it stay within the corridor by the end of the week. Still, either a downside or upside exits are the more likely options.
Bitcoin’s uptrend so far looks intact with the weekly resistance holding on. However, the continuation of the uptrend looks questionable. The most reasonable decision for position traders now would be to wait and see until the situation clears. As for the odds of the direction Bitcoin continues, the likelier option is up, given its position around the weekly $11,574 support level. Shorting Bitcoin in the current situation might be a higher risk move.
For Ethereum, the situation also appears rather mixed. Approaching trading Ethereum versus dollar this week, one should closely monitor the news concerning Medalla testnet. The Ethereum 2.0 project is expected to increase the scalability of Ethereum and thus gives substantial fundamental input to its market valuation. However the project’s realisation will have the ultimate impact on the market’s reaction to it.
Ethereum was in a downtrend through last week and slowed down its descent, nearing daily support. A further upside move looks a technically plausible option and a buying order at $380 may be not a bad option. Nevertheless any negative news may create a threat for this scenario. However, a mid-term short order for ETH/USD looks a much riskier option in the current situation.
Konstantin Anissimov, Executive Director at CEX.IO