For the past week, Bitcoin hit its highest price since two months reaching $42.6k on the 1st of August. It is experiencing a pullback now after 10 daily green candles with the price rallying from the low range of $30k to the high range of $42k.
Looking at the ranging pattern and consolidation that BTC has been experiencing since losing the major support at the $42k area on the 19th of May, we can see a couple of deviations from the ranging area of $30k to $42k.
The latest high of $42.6k may be a deviation or a higher high from the technical point of view. Now, we need to see BTC putting a higher low and starting to print a new bullish trend for a continuation higher.
That bullish scenario is not clear yet, holding the $35-36k area and holding the 50EMA on the daily timeframe is pivotal for the bullish scenario, but losing this support, may lead to a further drop to the $30k area, and the $42.6k high will turn out to be another deviation from the range and a fake-out. The coming days will reveal which scenario will play out for Bitcoin.
As for Ethereum (ETH), it is showing more bullishness on the daily timeframe compared to Bitcoin, it printed 12 daily green candles rallying from $1700 lows to $2700. It broke a downward trend dating since May and took back the 50EMA on the daily timeframe after acting as a resistance in the downward price action, and it should now turn into support.
Moving to Polkadot (DOT), it has been facing a major downtrend after the crypto major dip. It lost 80% of its value since the $50 all-time high on the 15th of May reaching a low of $10 on the 20th of July.
DOT, similarly to the other cryptos, broke the downtrend and rallied from the $10 lows to $20, breaking the 50EMA on the daily timeframe and is trying to build a new bullish trend and continue to rise again.
DOT is one of the cryptos that has major events on the way, it is launching the parachain auctions and will start to give projects the chance to build on its ecosystem, and thus the price may be affected positively by the news and the hype surrounding DOT and its ecosystem.
All the crypto currencies will follow Bitcoin’s direction on the higher timeframe, thus a bullish trend in Bitcoin will lead to bullishness for the majority of the crypto space. Waiting a few days before judging the direction of the market is important. Will it break the consolidation pattern and start a new bullish trend or not?
(Note: The above thought piece covers the wider VA industry, and may not be an activity that Arabian Bourse Limited (ABX) is looking to be licensed to undertake.
ABX has received in-principle approval from Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM) and is currently in the process of obtaining an FSP. ABX aims to be the first of its kind fully regulated, virtual asset MTF and custodian in the region focused on institutional and retail investors.)