Altcoins Slump While Bitcoin Takes a Break, Drifts Sideways
Rangebound Trading: Breakout or Breakdown?
After printing a fresh All-Time High (ATH) on July 14, Bitcoin started to move sideways, possibly preparing for another leg of the uptrend. Some of the other altcoins have already started corrections, which saw them retreat farther away from recent highs.
In recent days, Bitcoin has been outperforming all major altcoins – it is only moving sideways, without deep pullbacks, while traders of ETH, XRP, SOL, and others have experienced massive liquidations. During the last 24 hours, ETH traders have experienced $158 million in liquidations, with the bulls taking the biggest hit: $132 million. XRP traders lost $95 million, and as expected, the bulls have it the worst: almost $90 million. Bitcoin traders only experienced $69 million losses, followed by SOL traders with $46 million.
The pullbacks seen on major altcoins are normal after an extended period of gains, but some of them dropped furiously, sparking speculation that this is more than just a healthy correction. And since Bitcoin did not experience any major move down, it begs the question: is such a move next? Or is Bitcoin so strong that it will just move sideways while accumulating more longs for the next push?
Strategic Bitcoin Reserve: Plans, Studies, and Answers
An answer to that question may be given by the U.S. Digital Working Group’s report, which will be revealed by the end of the month. The Digital Working Group was tasked by President Trump to investigate how cryptocurrencies should fit into the U.S. government plans. This was a 180-day study, and its results were originally scheduled for release on July 22. The new date is July 30.
The report is expected to outline plans for a Strategic Bitcoin Reserve, but at the moment, it is not clear how the coins will be acquired. The study could recommend using seized Bitcoin, or budget-neutral means, possibly moving funds from other existing stockpiles and using those to buy Bitcoin. Also, it will be interesting to see what other – if any – altcoins will be included in the Reserve. Mark your calendars: July 30 could very well be a historic day for crypto.
Chart Analysis – BTC/USD
Currently, Bitcoin is trapped inside a range with a lower boundary around $116,000 and a ceiling around $120,000. We indeed saw a top above $123,000, but the recent price action was a lot more responsive to $120,000, as we saw several bounces from that location.
The middle line of the Bollinger Bands also coincides with the lower part of the mentioned range, which gives it additional weight. A break of this support zone would probably take Bitcoin into the lower support located at $112,000 and possibly even lower, to the other side of the Bollinger Band. At the time of writing, BTC is testing the lower boundary but the daily candle is not closed, thus we cannot consider this a break.
Any notable dips will become appealing to whales and institutional investors, which will drive the price higher eventually. As part of a bullish scenario, a break of $120,000 will renew the uptrend.
