Weekly Analysis of BTC, ETH, and the Stock Market, August 5, 2024
An overview of BTC, ETH, PAXG, and S&P500 charts, and the current cryptocurrency market dynamics.
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Bitcoin (BTC)
Bitcoin fell below the critical psychological threshold of $50,000 earlier today, marking a 26% decline over the week. This drop is largely attributed to the recent crash in Japan's stock market and subsequent panic selling by market makers.
Altcoins have depreciated even more drastically than Bitcoin, with many reaching their lowest values in a year. Due to the similarity across altcoin charts, there is currently no practical benefit in performing technical analyses until Bitcoin’s trajectory stabilizes.
Despite this sharp downturn, Bitcoin still adheres to an overarching bullish trend. It has tested the support zone between $49,000 and $53,000, where it currently trades. If buyers fail to maintain this range, BTC might slide down to the $42,700 support level. This scenario should be viewed as potentially the last viable buying opportunity before a likely transition to a bearish trend.
For Bitcoin to initiate a recovery, it needs to establish a firm position above the selling zone, which spans from $60,200 to $64,000.
BTC D1 Chart
Ethereum (ETH)
Ethereum nearly reached its annual low set earlier in January 2024, touching the support range of $2,100–$2,400.
The future trajectory of ETH will likely follow Bitcoin’s lead. If Bitcoin rallies, Ethereum could test the resistance zone between $3,050 and $3,300.
Conversely, if Bitcoin continues to fall, Ethereum might descend to a support level around $1,750.
ETH D1 Chart
S&P 500 (SPX)
The S&P 500 index has seen a notable correction, falling 6% over the past three weeks. This downward trend could continue as the stock market opens today.
If the index continues to drop, it may approach the lower boundary of its ascending channel, potentially reaching as low as 4,800.
This movement is critical as it reflects a strong correlation with the cryptocurrency market, impacting investor sentiment across both sectors.
SPX W1 Chart
Pax Gold (PAXG)
Gold, traded as Pax Gold, has shown strong performance, currently trading above the $2,400 mark. While no significant corrections are currently forecasted in the chart, a downturn in the stock indices could negatively influence PAXG’s price.
A realistic short-term scenario might see PAXG adjusting downwards to the buyer’s zone of $2,200–$2,300 in the coming days.
PAXG D1 Chart
BTC Dominance, Altcoin Season Index, and Fear and Greed Index
As BTC experienced a downturn, its dominance index reached a two-year high at 57.26%. This increase is not driven by heightened investor interest but due to altcoins declining more significantly than BTC.
BTC Dominance Index. Source: tradingview.com
The Altcoin Season Index also reached a new low, scoring just 20 points. It has remained persistently low for several months, signaling that an altcoin season is not expected anytime soon.
Altcoin Season Index. Source: blockchaincenter.net
The Fear and Greed Index has fallen by 50 points last week, now at a level of 26, which reflects widespread market fear. This sentiment can lead to further reductions in market liquidity as investment capital decreases.
Fear and Greed Index. Source: alternative.me
Economic News
This week’s macroeconomic calendar is filled with several key events:
- ISM Non-Manufacturing PMI (Monday, August 5);
- U.S. Crude Oil Inventories (Wednesday, August 7);
- Initial Jobless Claims (Thursday, August 8).
These events are not expected to have a significant impact on cryptocurrency valuations, suggesting potential stabilization in the cryptocurrency market after its recent sharp fall.
Check out The Coinomist for the latest cryptocurrency rates and chart analysis.
Disclaimer
Please note that the analysis provided above should not be considered a trading recommendation. Before opening any deals, we strongly advise conducting your own research and analysis.
Abbreviations
TF (Timeframe) — a chronological period equal to the time it takes to form one Japanese candle on the chart.
Horizontal channel (flat, sideways, range) — the price movement between support and resistance levels, without going beyond the given range.
К — simplified designation of one thousand dollars of the asset price (for example, 23.4K – $23,400).
Gray range on the chart — a support zone.
Red range on the chart — a resistance zone.
Correlation — the tendency of prices of different cryptocurrencies to move in sync, often influenced by the dominance of one of the assets.
Initial materials
This analysis was informed by the following educational materials and articles from The Coinomist:
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