Cointree Crypto Market Update - August 31st 2022
Market report for traders
BTC and altcoins
Over the last seven days, bitcoin has dropped 4.27%, at AU$29,397 at the time of writing. Meanwhile,Ethereum also tumbled 4.00% week-on-week to AU$2,275. And in other altcoin movements, Cardano is up 0.49%, Solana, is down by 6.89%, while Avalanche and Polkadot dropped by 12.63% and 2.94% respectively.
Bitcoin falls after FED Reserve’s stance
Bitcoin reacted to the US Federal Reserve's hawkish stance on inflation at Jackson Hole this past week with a fall of ~6%. Again, the king of crypto has followed the patterned response of stocks to inflation news, further strengthening theories of crypto and stocks moving in correlation.
Rumours circulate of 140,000 BTC flooding the market
In 2014, a hacking incident targeting Mt. Gox cryptocurrency exchange caused the theft of up to 850 thousand bitcoins, causing the exchange to file for bankruptcy and later be liquidated.
In November 2021, the Japanese courts and creditors of Mt. Gox reached an agreement on a rehabilitation plan. The rehabilitation plan established a registration and compensation plan for creditors based on phases.
Mt. Gox was supposed to start Bitcoin compensations on Aug. 28 which led to rumours circulating the crypto sphere this weekend, many with views that it was likely to result in a “black swan” event for bitcoin and the rest of the market, which has already seen a slump following the Jackson Hole symposium.
Creditors of Mt. Gox however later took to social media to dismiss the rumours, stating that no payments had been delayed, some even suggesting that the payment system isn’t even live yet.
🔔 Alert Ideas are presented throughout to help identify key levels of interest that may signify significant shifts in market performance. Cointree members can set a price alert directly from their Cointree account.
Weekly chart - Bitcoin dropped below AU$30,000
Bitcoin (BTC) dropped below its key support of AU$30,000 to a low of AU$28,400 this past week.
Daily chart - Bitcoin is ranging between AU$28,400 to AU$31,300
In the last seven days, Bitcoin (BTC) has been ranging from AU$28,400 to AU$31,300 where five out of seven sessions have been bearish, and looks to have started a downtrend parallel channel. This will be confirmed if it continues to stay below its 21 day Exponential Moving Average (EMA) and 50 day Simple Moving Average (SMA).
Since BTC has broken its psychological support level at AU$30,000, the bulls have not been able to break AU$30,000 even with above average buy volume. This showed that the bulls may be willing to wait longer for lower prices.
The next support level will be between AU$27,000 - $28,000 and if this breaks then the next support would be the June low of AU$25,600.
Despite the weakness in price, the Average True Range (ATR) has continued its downward trend which shows that volatility keeps decreasing. Compared to previous months, this is unusual because normally as prices fall, the volatility increases. This could mean that the bear market bottom is close.
- 50 Simple Moving Average (SMA), blue line
- 200 Simple Moving Average (SMA), black line
- 21 Exponential Moving Average (EMA), red line
- Bitcoin has dropped below its psychological support of AU$30,000
- Volatility has continued to decrease despite breaking its key support which could mean the bear market bottoming is close.
Disclaimer: The information provided is for educational purposes and does not constitute financial product advice. You should obtain independent advice from an Australian financial services licensee before making any financial decisions.