Cryptocurrency prices maintained a consolidation trend on Wednesday (July 19), with the lull in major developments providing traders with time to reassess the state of their portfolios and rebalance their positions accordingly.
Stocks extended their winning streak as better-than-expected earnings data continued to come out, bolstering investor optimism that the U.S. economy is getting back on track after years of struggling with the coronavirus pandemic and rising inflation. At the close, the S&P, Dow Jones and Nasdaq were up 0.24%, 0.31% and 0.03% respectively.
Bitcoin (BTC) is trading in a tight range between $29,855 and $30,264, according to TradingView, with both bulls and bears failing to gain the upper hand as traders await the next market move.
Jim Wyckoff, senior technical analyst at Kitco, noted: “August Bitcoin futures prices were slightly higher in early U.S. trading on Wednesday after hitting a four-week low on Tuesday.”
"Trading has turned sideways, choppy, and the bulls are a little muted right now," Wyckoff said. “Bulls still have the slight technical advantage overall near-term, but will need to push prices above the recent volatile and sideways trading range to gain fresh momentum.”
According to MN Trading analyst Daan Foppen, "The monthly time frame clearly shows that we are in a bullish market structure."
"We can see that all fair value gaps (FVGs) are being respected," he said. "These FVGs are considered a drain on liquidity because they represent internal liquidity. Prices trend towards these levels. We You can clearly see there's a monthly fair value gap above us and I also think that's where prices will be headed in the medium term."
Speaking about Bitcoin’s weekly time frame, Foppen noted that there are some developments he would like to see before entering any new trades.
“I would prefer to see prices fall first and then continue to rise,” he said. “The weekly chart shows the following: We have seen mostly sideways action, and we have been left with imbalances on the weekly chart after the impulse to the upside.”
“We could see a test of this imbalance before making the next move after a period of consolidation,” he noted. “Bitcoin spot has not backtested yet and I would like to see it before moving further up. I also have to mention that different futures charts show that we experienced a dip, but I am not completely convinced that this is enough.”
He added that the price of Bitcoin could "drop significantly but still be in an uptrend."
Altcoins climb steadily
Most coins in the top 200 were up on Wednesday, while those that were down saw only small losses.
Stellar (XLM) continues to benefit from XRP-related developments, with its price rising 25.4% to $0.162, while Optimism (OP) is up 11.3% and Hedera (HBAR) is up 9.93%.
Currently, the total market capitalization of cryptocurrencies is $1.21 trillion, with Bitcoin’s dominance rate being 48.3%.
Ripple once rose 10% during the day to $0.8391 per coin. Right now, market players are keeping a close eye on the $1 level.
David Lawant, head of research at institutional cryptocurrency exchange FalconX, said: “Ripple’s lawsuit with the SEC did not trigger a broader, more durable rally in the cryptocurrency space.”
Although Ripple has given back some of last Thursday’s gains, it is still up about 65% since the ruling. Meanwhile, the CoinDesk Crypto Market Index (CMI), which tracks the performance of the broader digital asset market, gave up all of last Thursday’s gains and fell 0.5% over the same period.
Lawant said that while the rush to buy XRP has likely passed, digital asset funds’ increased holdings of XRP may create some buying pressure, pushing up its price.
“One potential source of additional institutional money that I’m still watching is index funds,” he said.
