This week was marked by the ECB’s meeting on Thursday and its corresponding interest rate announcement, where a rise to 1.25% was expected, +0.75% compared to the last figure. There was no surprise in this decision, but there was the increase in the Deposit Facility Rate, which rose by 0.75%, that’s 0.25% more than expected.
That same Thursday, there was also a press conference by Jerome Powel, president of the FED, in which he highlighted a comment related to the crypto market, “stablecoins must be properly regulated and they need legislation in this regard.”
The crypto market was indecisive at the beginning of the week, which caused a downward movement that generated new monthly lows in several tokens, including $BTC, which broke the low zone of August until finding support in the $18.5k zone, July low.
This support has served as a rejection zone for the price that managed to rise more than 9% during Friday. It remains to be seen if it is a typical “Dead Cat Bounce” movement in downtrend before a breakout of support (although there should be a bearish movement with volume that would undo this rise), or it becomes a consistent support zone generating higher highs from the current ones, which we see marked in the following chart.
A graph that can help us evaluate the situation of $BTC with respect to the rest of the market is the one of dominance of Bitcoin, which as we mentioned last week, is in the annual support zone and that last Friday generated an upward movement of rejection since this 39% zone at the same time that $BTC rose.
This rebound occurred because $BTC rose more than other large cap tokens like $ETH, $DOT or $BNB by 5%.
This support in the dominance of BTC can give us some clues about what can happen in the market. If this support continues to hold, we are likely to see a situation where $BTC comes out stronger than the rest of the market, sideways as the market falls or rises more than other tokens.
If, on the other hand, this support is broken, we would find ourselves in a completely opposite situation, in which either BTC falls more than the rest of the market or it lateralizes while other tokens rise. In one way or another, it can be the trigger that leads us to one of the proposed scenarios.
Regarding the weekly analysis, this time I would like to highlight the result of $ATOM, the native token of the COSMOS ecosystem, which is approaching the weekly close with a result of +25%.
$ATOM has had a very positive evolution during this summer, generating an upward trend contrary to the main downtrend it has been dragging during 2022.
Although in June it generated a low below the low of 2021. Price zone between $6 and $7.50 acts as support and leaves a more favorable situation than other tokens that are at much lower levels.
If we enlarge the image we can clearly see how this secondary trend has been evolving until the resistance was broken.
In the chart we can see how between June 13 and 20, there is a bullish divergence in the RSI, which shows some weakness of the downward movement, and then begins to generate higher highs and higher lows.
In mid-July, the price manages to recover the $9 area, which had been support in 2021 and generates a new range between $9 and the next resistance located at $12-$13, continuing with the sequence of rising highs and lows.
But the turning point prior to the exponential movement was found during this week, specifically last Thursday during the American opening, with a bullish breakout candle that generated a high above the resistance and was accompanied by a growing volume and a bullish RSI crossover, as can be seen in the following chart.
After the close of the daily candle, the price movement was pronounced, reaching +20% in just 12 hours.
This situation is a clear example of the trading alerts that are launched for those holders of $BBCN tokens who have contracted the annual membership, with which they have access to various trading signals in addition to many other advantages such as access to specialized training or mentoring. You can find all the information in the following link:https://www.linkedin.com/embeds/publishingEmbed.html?articleId=7043029338497962741&li_theme=light
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Regarding what we can expect from the evolution of $ATOM, we must highlight two relevant resistance zones, the $17, which has stopped the price in this first impulse and the $20 zone, which was support in December 2021, but which can act as resistance as it already did after the breakout in May.
As for the supports, the $13 area can act as support after the breakout, but the most relevant to continue with this secondary uptrend is to continue to see the formation of rising highs and lows, so the $10 support area acquires special relevance, because if lower lows are seen, the main downtrend could be reactivated.
Finally, remember that nothing discussed in our articles can be considered as investment advice. Everyone must do their own analysis and develop their own trading strategy. The Belobaba Crypto Fund team only shows our analysis and investment tolos, and how they help us in our operations when making decisions.