Market Recovery in Cryptocurrencies Was Quick but Sustained Growth Lacks Pace
In the world of cryptocurrencies, the past few weeks have seen a flurry of activity, with key players such as Bitcoin and Ethereum making significant moves.
According to InvestTech's analysis, Bitcoin's recent break of the short-term rising trend channel's floor indicates a weaker rate for the digital currency. This is further supported by their one to six weeks recommendations, which give a negative score to Bitcoin. However, the TradingView's BTCUSD technical analysis summary points to a 'strong buy' signal for the week ahead, and moving averages show a 'strong buy' signal as well. Support for Bitcoin remains at $110,000, while resistance is at $120,800.
Ethereum, on the other hand, is showing a slight downward trend on the hourly chart since late August. The price is struggling around the 4,319 USD level and facing strong resistance at the 200-period exponential moving average (EMA-200) near 4,357 USD. A sustained breakout above 4,400 USD could trigger upward momentum toward 4,600 USD, while the Relative Strength Index (RSI) at 48.5 suggests critical conditions for new buying impulses. September's seasonal weakness, however, raises the risk of setbacks.
Interestingly, Ethereum is forming a "falling wedge" pattern, a bullish reversal signal, similar to Bitcoin. This could lead to challenging new highs with mid-term targets around 6,000 USD if Bitcoin confirms its upward trend.
The Federal Reserve's job is expected to get more complicated as we head into September, with growth momentum slowing and tariffs showing up in inflation more broadly. However, the current environment seems favourable for cryptocurrencies, as a wave of buying activity in Treasuries, triggered by a poor US payroll report, has renewed Fed rate cut bets. Overnight-indexed swaps indicate there is over an 80 percent probability of a Fed rate cut next month.
Cryptocurrencies, including Bitcoin, are expected to benefit from these rate cuts, as they need them for their next big leg up. The Tradingview's Market Cap BTC Dominance indicator shows the OG token is expected to dominate within the crypto sector once again. This was evident when the OG token hit a new all-time high just before US President Donald Trump signed the "GENIUS Act" into law.
However, it's important to note that there is a poor correlation between the highs and lows of volume and the price peaks and valleys in Bitcoin. Another factor that devalues the token is the negative volume balance. Despite these challenges, the indicators under oscillators on TradingView have recovered to point to a 'buy' stance.
In conclusion, while the cryptocurrency market is showing signs of volatility, the outlook remains positive, with key players like Bitcoin and Ethereum showing potential for growth in the coming months. As always, it's crucial to stay informed and make informed decisions based on reliable data and analysis.
