Bitcoin is stuck between $3,000 support and $5,000 resistance, with $4,200 to $4,500 as the critical zone. Altcoins like Litecoin are outperforming, and Binance Coin's periodic token burns reduce supply like a buyback. The 200-day moving average and wedge patterns signal where the market heads next.
Bitcoin is actually quite stable at the moment at around 4,500. The relevant levels that we're looking at right now is that 3,000 which is the major support level. And then we have this giant descending wedge which actually we can see the top of this wedge is at the 200 day moving average. Right now the 200 day moving average is around just under 5000. So between 3000 at support and 5000 at resistance, 4000 is about halfway. So bitcoin has kind of been in limbo. It's up about 20% since the beginning of the year, but it is underperforming at the moment. I've been tweeting about Altseason for a few weeks already. At the moment, while bitcoin is kind of standing still, some of the altcoins are outperforming and specifically it's some of the lower cap altcoins. So Litecoin has been doing very well because it has a very large community base and there's a halving event coming up in August and Binance Coin has been doing very well as well. And then we have, you know, kind of these these days where some altcoin will go up double digits. I think XLM had a turn, Dash had a turn. They're basically taking turns. And each day there's like a winner of alt season that I've been tweeting out as well. So what's happening is that people are seeing a lot of value in the crypto market, but more specifically than just holding bitcoin, they're moving towards some of the altcoins at the moment. Binance Coins buyback strategy is not necessarily to be compared with a buyback strategy in the traditional stock markets. Because Binance Coin is not a traditional stock. It doesn't give you shares in the profits of Binance. So even if Binance has amazing volumes, the holder of Binance Coin doesn't necessarily see the benefits from that, even though that there is kind of speculation. Whenever there's strong volumes in the market, people tend to buy Binance Coin because Binance is benefiting from those volumes. What Binance Coin is, is actually a token that gives you a discount based on your trading volume. Whenever you're trading on the Binance platform. What they have is not actually called a buyback. What they call it is a token burn. So every, you know, periodically they take some of those coins that Binance has accumulated and they burn them out of circulation. And this is really good for the token economics because whenever you have something that's supply dwindles over time and the supply is actually going down. That actually increases demand on the token. So unlike fiat where you know, they like to continue to create more and more money and then bitcoin has, you know, a static hard cap of 21 million, Binance is actually working the other direction where they're actually reducing the supply over time. So as far as token economics is concerned, that's, that is a positive factor. Definitely agree with Tom on that one. The 200 day moving average is extremely important in technical analysis. The only reason actually I've been Talking about this 200 day moving average for probably since mid 2018 already you can see. So this blue line is the 200 day moving average on the chart and basically it shows the average price over the last 200 days. At any point in time. During the 2017 Bull Run, the 200 day moving average acted as a support for the market where you can see it held up the prices at various points until, you know, the bubble came. It got a little bit detached once it crossed. That's when people started realizing that we're in a bear market here. And you can see that it acted as a clear resistance bouncing off of that line here and here. And you know, around mid November it didn't even get close before it plunged down further. So if somebody were to ask me right now, are we in a bull market or a bear market, I won't feel comfortable telling them we're in a bull market until we get a clear.
Break of our calls on btc, Ether and Litecoin worked out quite nicely. When the market is selling off or having a setback, there is always a rebound coming. We have problem though. To crack the 4200 resistance level. There is some good selling pressure coming from Ether and BTC out of the cash market and as well derivatives on the other side. If the market starts to push higher, Litecoin is still the leader there. The 4200 level does not really have any fundamental connections we think, but on our technical analysis that level was always on our charts. It is the upper leg of the ascending triangle we have drawn for quite a while. Additionally, we also see these ascending triangles in some altcoins versus dollars and btc. That is also mentioned in our rotation report where the good performances in ranks 11 to 50 are pushing through there now. Hopefully we see a spillover into the top 10s that would start to mark some bases or some rallies into the altcoins from time to time. The 200 moving average. The 200 day moving average is coming into spotlight. For example, Tommy Lee mentioned it in combination with Bitcoin $4000 level, we don't feel that just the 200 day moving average on its own is a good indication where the market is going to go. But in combination with technical analysis and our ascending triangle where the top side is the 4200 level, we do see a strong case if both indications are matching. Therefore, watch that level. It could spark some further pushes to the upside.
This episode is sponsored by Trade Santa. Trade Santa is a cloud based trading bot. Set it up in less than two minutes, trade multiple pairs, choose between long and short strategies, use tech analysis indicators and see your results in real time. Trade Santa works 24. 7 to get you the profit you set. The platform is already integrated with Binance, Bittrex, Bitfinex and hitbtc. The link is in the description below. Cointelegraph like subscribe and Hodl.
Sam.
