Majors lead bitcoin higher, but crypto correction begins

August 5, 2020   Bitcoin

After several months of stagnant price action, last week the cryptocurrency market exploded, putting an end to the boring sideways trend. It also sent Bitcoin skyrocketing through resistance at $10,000 and potentially started a new uptrend. A rejection at $12,000 has stopped the advance for now, but while the leading crypto asset cooled off, major altcoins like XRP and Ethereum went on a run of their own.

Here are all the most important breaking news, trends, and changes that happened across the crypto space over the last seven days.

Bitcoin’s Monthly And Weekly Close Set Records For Highest In Years

Bitcoin price this week closed the highest weekly candle in over a year. The asset hasn’t traded at such levels since the summer of 2019. After topping out at $14,000, the cryptocurrency market began the second phase of its downtrend. This latest breakout could be the start of a new uptrend forming, but the current economic uncertainty has resulted in a hesitance from investors.

On monthly timeframes, the July candle close was the highest since Bitcoin’s peak in 2017. A pullback to retest $10,500 as support on weekly timeframes is possible and would be healthy before the advance continues. The cryptocurrency will have resistance above at $14,000 to beat before a retest of the former all-time high of $20,000 is possible.

Trading Volume and Greed Returns, Closes In On New Yearly Highs

BTC total daily trading volume had long been in a steady downtrend, declining week over week since early May following a break above $9,000. Suddenly after the breakout this week, volume is now approaching yearly highs, and could soon set a new record for 2020 if interest in Bitcoin continues to pick up.

Volatility is also back, as expected. The cryptocurrency asset class couldn’t stay calm for much longer, and a return to the signature volatility is welcomed. It means asset prices are soaring once again, and although there are plenty of pullbacks and crashes in between, it is just another chance to profit from each market peak and trough. 7-day volatility has now pushed higher than 30-day volatility, depicting an uptrend forming in price action explosiveness.

After teetering into extreme greed territory last week, the crypto market is now starting to hesitate, taking a step back toward greed and fear. The level of greed is still far less than what was seen a year ago at the $14,000 top. This could indicate that the rally has more left to go, or it could be a sign that a top is near, or even behind us at this point.

XRP Beats Bitcoin By Nearly Tenfold, Ethereum Close Behind As Crypto Market Heats Up

Although Bitcoin lit the fuse that sparked the crypto market boom this past few weeks, it is XRP and Ethereum that are now surging as a result.

Bitcoin was up only 4.8% over the last week. Meanwhile, XRP was up over 42.8% or nearly ten times Bitcoin’s performance. XRP almost doubled Ethereum, which easily bested Bitcoin with a 26.8% gain on the week.

XRP was even the best performing asset across the crypto market. This is highly unusual for the token that has been the worst performer for nearly two years running. Right behind it was Synthetix Network Token, and the altcoin superstar Chainlink, that since this report was issued has since set another new all-time high. Coin fell hard after the community expressed a deep upset over shock announcement involving the MCO token. DeFi token Ampleforth took a hard fall, and altcoin Elrond also saw strong downside compared to the rest of the thriving market.

The increased performance in majors, mid-cap altcoins, and even Bitcoin, left small-cap altcoins behind. Small-cap altcoins, however, have beaten all other indexes over the last several months, so it was time for a correction and the other classes to catch up.

What’s Going On With Bakkt And Burgeoning CME Open Interest

In a strange twist, the physical delivery of Bitcoin to Bakkt has seen a sharp decline over the last month. While this happened, trading volume on the platform spiked to the highest level ever recorded on Bakkt after Bitcoin broke up through $10,000. It could be a sign that institutions were waiting for the resistance to break before showing strong renewed interest.

Further backing up that theory, is CME Bitcoin Futures open interest reaching an all-time high peak of $850 million. The platform caters to only a certain type of high wealth trader, over a certain income threshold, and meeting many financial requirements. CME is also dominating Bitcoin Futures trading volume, accounting for as much as 16.8% of the market.



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