Recovery week in the crypto market, in which $BTC approaches results close to +10%, but still far from the levels of early June.
This weekly move has generated the breakout of the acceleration bearish channel that we commented on a few weeks ago and has also confirmed a triple floor formation as we can see in the chart with a higher high than the previous two highs.
This formation could lead to a pullback move to the broken resistance line, but it is a reversal figure that could lead to a move higher to $26k.
Although this is a good sign in the short/medium term, the long-term trend is still bearish, so caution should be exercised as any buying trades will be going against the main trend.
Regarding the rest of the market, the result has been mostly positive and tokens such as $FLM stand out, which accumulates +60% or $APE with +30%, although this week I would like to highlight the result of $ENS, the governance token of Ethereum Name Service, which accumulates a weekly result of +34%.
Ethereum Name Service is based on the Ethereum blockchain and aims to make the Ethereum-based web more accessible and understandable to people, similar to how the Internet Domain Name Service (DNS) makes the Internet more accessible.
ENS converts human-readable Ethereum addresses to wallet-readable alphanumeric codes as a metamask and also allows for the reverse conversion. So instead of using hard-to-read alphanumeric codes, users can receive any token to a short, easy-to-remember link. This simplifies the user experience and makes blockchain technology less technical.
If we are going to analyze the evolution of the $ENS price, we can appreciate the recovery movement of the last week, within the downtrend that the asset has been dragging since last year.
This movement of +34% has generated the bullish breakout of the wedge that had formed in recent months, but at the moment the price has stopped just at the resistance zone of $13-$14, which is the top of the side channel that we see in the chart.
If we expand to the 1h candlestick chart, we can see how the trading volume increases considerably, generating a bullish RSI crossover at the level of 70, which alerts us that the break is with strength and it may have some aftershock.
On the chart I have drawn the Fibonacci extension of the movement prior to the breakout, which had a retracement of 0.786 in order to set targets at the levels of 1.272 and 1.618 and is the level at which it has found resistance and the top of the side channel that I mentioned above.
In order to be able to set future scenarios I would like to show you the 4h chart.
Currently the price has a very strong resistance in the $13-$14 area, which is the area to take into account to start thinking about the change of trend. If it manages to make a maximum above this resistance, it would confirm a double bottom formation that could take the price to $18-$20.
But as long as there is no such high, the dominant trend is bearish, so we would most likely see a rejection in search of support at the broken resistance or at the macro support of $7.
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 analytical view of the market.