Crypto Market Review, 24 August

In the past week, Ethereum has lost more than 20% of its value despite the rapid price increase we saw between July and August. The main reasons behind the correction are the same as always: the lack of inflows into the digital asset markets, the USD rally and the end of the merger euphoria. But the second largest cryptocurrency on the market may still have some power to bounce.

Factors That Could Help Ethereum Bounce

There are at least three reasons that could help Ethereum jump around the values ​​we see now: the moving average band, the fact that the asset is above the important 50-day moving average and the fact that it is still moving in the local uptrend.

The high density of moving averages around the price of Ethereum can be considered as a sign of an upcoming volatile move that has every chance of turning upwards. Currently, Ether is concentrated around the 50-, 21-, 12-, 26- and 55-day moving averages. The last time the bands were this close, Ether spun from $3,000 to $1,650 in a matter of days.

Ethereum’s position on the chart also matters as the asset manages to stay above the 50-day moving average, which usually acts as a barrier for assets moving in an uptrend or downtrend. The fall below the support will confirm Ethereum’s return to the deep phase of the bear market.

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Since mid-July, Ethereum has been moving in the local uptrend, and with a 55% price increase at the end of the month, the asset has entered another local ascending channel, and is yet to fall below it despite the 24% retracement from the local . top.

At press time, Ethereum has changed hands at $1,653 and has been moving in the local consolidation channel for the past five days.

DXY to face important resistance

As we have mentioned several times before, the rise of the US dollar is one of the main fuels for the selling pressure in the cryptocurrency market, as the largest investment tools for digital assets are denominated in USD.

On the weekly chart, the DXY is expected to meet a local resistance level around $115, which would be the highest value of the index since 2002, which could be a logical top for this rate hike cycle.

Unfortunately, if the resistance plays out as expected, the accelerating recovery of the cryptocurrency market will start around July 2023. If the US dollar somehow manages to climb to $115 earlier than the summer of 2023, the digital asset market will most likely face a serious downtrend that will put some assets at critical price levels.

As for Bitcoin, the first cryptocurrency is still looking for ground to reach as it fails to bounce off a plunge to the $21,000 price range and is now hovering at July 26 levels. As the trading volume suggests, traders are not interested in moving their funds towards digital gold, although the situation could change drastically in September, when the Ethereum Merge update goes live on the mainnet.