Last week’s market crash showed how susceptible the global financial system is to unexpected news. Some of the “exaggerated” price reactions have already been corrected, but market sentiment is now less optimistic for the coming weeks. However, the positive outlook for quarter 4 of the year remains intact.
Thought of the week
Digital Asset News
A New York judge has given final approval for defunct crypto exchange FTX and its sister company Alameda Research to repay $12.7 billion to FTX creditors as part of a settlement with US trade regulator CFTC.On August 7, US District Judge Peter Castel officially approved the $12.7 billion settlement that FTX and Alameda had entered into to resolve a 20-month legal battle with the CFTC.
Notably, the trade regulator did not seek a civil monetary penalty, which means that the entire $12.7 billion will be used to repay FTX’s creditors directly. FTX and Alameda agreed to repay 8.7 billion US dollars to investors defrauded by its founder Sam Bankman-Fried. They were also ordered by the judgment to repay a further 4 billion US dollars. In addition, FTX and Alameda Research are permanently prohibited from “defrauding or deceiving” investors, engaging in transactions in “digital asset commodities” and ever buying or selling digital asset commodities (crypto-financial products) on behalf of third parties.
Tether, the issuer of USDT – the world’s largest stablecoin – has minted over $1.3 billion worth of stablecoins since the bottom of the crypto market, as crypto investors appear to be preparing to buy the bear market. The Tether Reserve has printed over $1.3 billion worth accordingly since the market bottomed on August 5.The $1.3 billion was subsequently transferred to some of the most popular centralized crypto exchanges – including Kraken, Coinbase, OKX and Bullish – as evidenced by an August 9 X-Post from Lookonchain.
Large stablecoin inflows to crypto exchanges could be a sign of increasing buying pressure, as stablecoins are the main link between the fiat and crypto worlds for investors. After the aggressive sell-off of the crypto market worth USD 510 billion, the local market may indeed have bottomed out.
However, Bitcoin could experience further downward fluctuations if it fails to recapture the important USD 64,000 – 65,000 mark. This price level acts as a short-term realized price for large investors, as analyst CryptoQuant explained on August 9. “The short-term realized price of whales is in the $64,000 – $65,000 range. So this level could prove to be resistance.”
The Bitcoin Bull-Bear Market Cycle Indicator, which tracks the sentiment of crypto investors, has switched to bullish after the Bitcoin price was recently in negative territory for three days and fell to a level not seen since February.
“Most of Bitcoin’s on-chain cyclical indicators are now signaling a bull market again,” CryptoQuant founder Young Ju wrote in an X-Post on August 9. “Bitcoin is still in a bull market,” added pseudonymous crypto trader PlanB.
The Bitcoin Bull-Bear Market Cycle Indicator had not shown a bearish signal since January 2023, shortly after the FTX collapse. The Crypto Fear & Greed Index also reached an “Extreme Fear” value of 17 on August 6, the lowest value since the FTX crash. Since then, the value has risen again to a “neutral” score of 48. Some Bitcoin investors believe that the quick reversal indicates that the recent price drop may have been a bear trap – which occurs when experienced traders sell Bitcoin in a controlled manner to temporarily lower the asset’s price and trick short sellers.
While some analysts believe that Bitcoin’s recent downturn mirrors previous trends before bull markets, others are more skeptical. On August 7, 10x Research’s head of research, Markus Thielen, stated that “for the ideal timing of the next bull market entry, we are targeting Bitcoin prices to fall into the low 40,000s.” In a report on August 6, Cathie Wood’s investment firm Ark Invest also noted that the key supports for Bitcoin are at USD 52,000 and USD 46,000.
Digital Asset Market
Market report including trading idea
The majority of digital assets experienced setbacks and sell-offs in line with the global financial markets.
After the Japanese central bank ended a policy of “no interest rates” that had lasted more than 15 years and raised key interest rates from 0.1% to 0.25%, the markets saw the sharpest sell-off since 1987 (in relation to Japan) at the beginning of August. As a result, the other notable global indices and stock markets also lost a large part of their annual performance. Due to the strong correlation with the global markets, digital assets also fell back to their February levels and thus joined the overall trend.
Although the markets recovered quickly last week, many prices (especially of altcoins) are still well below the resistance zones and have not been able to build up any new momentum. As a result, the markets are currently characterized by “fear” and the vulnerability of the markets has been exposed in these uncertain times.
The past few weeks have shown that fundamental market developments are progressing, but that overarching global issues are having a greater impact on price developments in the short term. The Ethereum spot ETFs in the US are a complete success (measured by volume) – this could determine the market in the coming months and ensure positivity.
On a monthly basis, Bitcoin is now back at roughly the same levels, with the overall development of the digital asset market showing a negative performance of ~8%.
The message for the coming month is that a consolidation followed by bullish momentum would be the healthiest for the market structure.
Chart technicals
From a technical chart perspective, Bitcoin is now trading around the resistance and previous support zones at ~$60,000. The rapid sell-offs have created new support zones at ~$50,000, which are now creating a very broad trend channel. However, this should narrow again in the coming weeks and ideally establish higher support zones so that the resistance zones above half of $60,000 can be tackled again.
Altcoins, on the other hand, are not yet showing any new momentum and remain at relatively low levels for the year as a whole.
The selling pressure from Grayscale in the ETH ETFs should ease noticeably in the coming weeks, which could establish a positive trend.
The next price targets in the event of a positive trend: ~$62,500, ~$65,600, ~$68,000
The next price targets in the event of a negative trend: ~$54,500, ~$50,000 ~$48,500
Trading idea
Using a DCA (dollar-cost-average) principle, almost all digital assets currently offer good entry points. Ethereum in particular could become an exciting topic in the coming weeks, as could tokens and coins that have retraced ~50% or more from their high for the year.
Weekly overview
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