Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

Jul 14 • 2020
Crypto Market Report: Bitcoin Trades Flat Causing Options to Drop But Altcoins Keep Shining

The broader financial market continues to fend off another Black Thursday style collapse or second-leg down scenario.

And although the return of risk appetites hasn’t helped Bitcoin break free from its tight trading range, altcoins across the crypto market have been highly explosive. 

One superstar altcoin has set a new all-time high and keeps climbing, helping the altcoin market shine against a stagnant BTC.

Metrics across the Bitcoin space continue to decline despite prices staying afloat. On weekly timeframes, Bitcoin price may have found support and is gearing up for a bullish advance and potential breakout.

A boost in Bitcoin would take the asset’s two-year performance ahead of gold, giving more credence to the safe haven narrative that has faded since the mid-March market selloff.

All other signs in Bitcoin point to a healthy network supporting the crypto asset, all that’s left is a bullish breakout, and Bitcoin’s next bull market could finally be here.

Bitcoin Weekly Price Action Finds Support, Potentially Turning Bullish Ahead of Breakout

Bitcoin price action has been boring over the last several weeks, trading sideways in a low volatility, coiling trading range. The ongoing contraction has sent crypto traders to altcoins and the stock market where there are more current opportunities.

But while this goes on, Bitcoin may be confirming resistance as support on weekly timeframes, and building a base at which to make a strong bullish impulse higher from.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

Data shows that when volatility drops this low, a 50-70% move in Bitcoin price can result. The asset may retest $8,700 before any upside continuation occurs. However, considering the pent up momentum, a breakdown to $8,700 may not stop there.

Bitcoin will need to break and close above $10,000 and continue from there to keep hopes for a new bull market alive.

Trading Volume and Volatility Continue to Decline in Crypto Market, Sentiment Remains Neutral

The lack of any exciting price action in BTCUSD markets is causing trading volume to trend downward, continuing the descent that began in April following the Black Thursday collapse.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

The low volume environment has also kept the notoriously volatile cryptocurrency asset dropping in the key metric.

Volatility continues to set new low after low, according to the 30-day and 7-day averages, as well as Bollinger Band Width – another tool used to measure volatility.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

The flat trading environment has also meant very few fluctuations in sentiment. Without wild moves causing the herd sentiment to change like the wind, traders are simply confused, and remaining fear from Black Thursday and the pandemic uncertainty has the Fear and Greed Index tracking just below neutral.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

Chainlink Sets Record High, But Mid-Cap Altcoins Outperform The Rest

While Bitcoin does its best impression of a stablecoin, altcoins everywhere are ripping in one direction or another. 

Previous top performer Compound has corrected heavily. Meanwhile, crypto market superstart for the last two years running Chainlink, has set yet another all-time high. And another. And another.

The asset is in full price discovery mode, setting a new record with each passing day. The asset may be ready to peak, however, according to the TD Sequential indicator. The asset is up over 300% year to date, leaving much profit to be taken.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

Outside of Chainlink, mid-cap altcoins dominated the crypto market over the last week.

Thanks to strong performance from ADA, DOGE, VET, and other mid-cap coins, the mid-cap altcoin index vastly outshined Bitcoin and the rest of the crypto cap indices.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

Safe Haven Narrative Reaches Crossroads, Two-Year BTC Performance Comparable To Gold

Bitcoin has many narratives: store of wealth, safe haven asset, global reserve currency replacement, an answer for everything.

The safe haven narrative helped fuel Bitcoin’s rally in 2019, but the asset went parabolic, then later overcorrected. Meanwhile, gold has had stable and steady gains over the last two years.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

Looking at the past two years of performance, Bitcoin and gold are neck and neck, yet investors in the precious metal wouldn’t have had nearly as wild and explosive of a ride to the same ROI.

The volatility in Bitcoin resulting in the same returns in the same timeframe, is damaging to Bitcoin’s safe haven narrative. A safe haven must be stable for investors to feel safe storing wealth in the asset, and Bitcoin’s unpredictability and instability makes for an uncertain investment that is no haven at all.

It’s now or never for Bitcoin to prove itself against gold and cement the digital gold status, or tarnish it forever.

Bitcoin Blockchain, Sidechains, Second-Layers, Off-Chain Destinations, And More

The asset may be trading sideways and investors in the asset class are feeling uncertain, the underlying network is as healthy as ever in Bitcoin.

The Bitcoin network hash rate has achieved a new 7-day average all-time high, showing that not only was a miner capitulation hash rate death spiral avoided, the network is chugging along well.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

Bitcoin sidechains are also gaining traction. The Liquid Network launched by Blockstream in 2018 has recently grown by over 413% since the start of the year.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

Growth has also returned to the Lightning Network, a second-layer payments protocol for Bitcoin. After an initial phase of adoption, things leveled off, but have since returned to positive uptick in usage and adoption.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

Despite all of this, tokenizing Bitcoin as an ERC20 token on Ethereum has become extremely popular. 

There are now over 14,000 BTC tokens on Ethereum, ranging from HBTC, to WBTC, to renBTC, and more. Off-chain BTC on Ethereum is outpacing both Lightning and Liquid combined.

Crypto Market Report: Flat Market Lets Mid-Caps Run, Bitcoin Prepares Bullish Breakout

In The News

Dogecoin Goes Viral on TikTok, Pumps 100%, Later Dumps On Users

The altcoin based on the Shiba Inu dog meme went viral on the popular social media app TikTok. There, users were urged to pump the “stock share price” to $1 per token, so the initial buyers could turn $25 into $10,000. The asset pumped over 115%, but later fell by over 35% wiping out many TikTok users in the process.

Coinbase Is Potentially Preparing A Stock Market IPO

Rumors are circulating about cryptocurrency exchange Coinbase going public on the stock market with the debut of an IPO. The exchange will be under the gun to launch the IPO digitally through a tokenized security, setting a precedent for the emerging industry.

Tether and Bitfinex Must Stand Trial For Missing $850M 

Tether and Bitfinex parent company must now stand trial to explain what happened to a missing $850 million. A movement to dismiss the charges was denied.

 

Information provided in PrimeXBT’s market report includes data provided by Arcane Research, in addition to other internal market research.

The information provided does not constitute, in any way, a solicitation or inducement to buy or sell cryptocurrencies, derivatives, foreign exchange products, CFDs, securities and similar products. Comments and analysis reflect the views of different external and internal analysts at any given time and are subject to change at any time. Moreover, they can not constitute a commitment or guarantee on the part of PrimeXBT. The recipient acknowledges and agrees that by their very nature any investment in a financial instrument is of a random nature and therefore any such investment constitutes a risky investment for which the recipient is solely responsible. It is specified that the past performance of a financial product does not prejudge in any way their future performance. The foreign exchange market and derivatives such as CFDs (Contracts for Difference), Non-Deliverable Bitcoin Settled Products and Short-Term Bitcoin Settled Contracts involve a high degree of risk. They require a good level of financial knowledge and experience. PrimeXBT recommends the consultation of a financial professional who would have a perfect knowledge of the financial and patrimonial situation of the recipient of this message and would be able to verify that the financial products mentioned are adapted to the said situation and the financial objectives pursued.

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