Crypto Weekly Outlook, Week of July 23

July 22–28 Weekly Report: BTC Resistance at $7,800-$8,000 level as Global Volume Continues to Decrease

Read the full report here: https://news.caviar.io/crypto-weekly-outlook-week-of-july-23-1a4374aee81a

Market Sentiment

The short-term outlook for the segment has turned from positive to neutral. The broad suggestions from the weekend show a continuation of BTC dominance high of 45%, with only the “Coinbase 5” yielding similar market strength. Daily global volume on July 22nd is down to $10.9B from July 18th level of $21B, representing a 48% decline in exchange trading volume. Following our previous report, leading sentiment and technical indicators show mild signs of a rebound in BTC with a lesser likelihood for altcoin outperformance. Here at Caviar, as of July 22nd our analysis on exchange activities shows an 84% likelihood of a 3–6% daily directional move downwards for BTC in the coming days. This real-time tool incorporates 1) bid/ask exchange information across both North America and Asia exchanges; 2) leading technical analysis on blockchain-level analytics, and lastly; 3) social media to token price analysis with a 35% weight on GitHub activity. The tool provides a scenario analysis on the likelihood of short-term reversal of the current market trend. The outcome registered an 84% likelihood that BTC moves lower in the next 3–4 days.

Futures Markets, COT Report

The release of the COT report on each Tuesday serves a tool to identify crowded speculative trades as it provides insights to institutional positioning. Above is the most recent COT report which was issued last Friday July 20th but is based on data from Tuesday July 17th. As of Tuesday of last week there were 4,135 short bitcoin futures positions and 2,495 long bitcoin futures positions held by what is defined as non-commercial traders. Non-commercial traders are those who are betting on the speculating on the price of Bitcoin and are NOT using the futures market for hedging purposes. As such, non-commercial traders were 62% net short. Here at Caviar, we are analyzing the sideways pattern of net-short percentage over time as a signal that institutions and retail alike are targeting BTC accumulation and less so altcoins.

Technical Analysis (https://www.tradingview.com/chart/XBT/BHfBW6yY-BTC-USD-Resistance-Breached-Next-Resistance-8000/)

BTC / USD — Resistance Breached, Next Resistance 8000

Market Cap Year-to-Date

BTC dominance of 45% is hovering at the 2018 highs. On Sunday, trading volumes reached their lowest levels of the week as bitcoin’s dominance seems poised to pair gains. As per our analysis, given our view that BTC dominance will continue to increase at a rate above that of the overall market, we find it appropriate to show how rarely BTC dominance trends reverse as the graph above clearly shows both the emergence and continuation of the trend on April 30th to July 22nd.

Bitfinex BTC/USD Shorts from June 5th to July 22nd

BTC shorts steadily increased this past week as traders expected a break-out in trading volume. On the fundamental front, expectations for an ETF approval continue to support the institutional narrative of BTC accumulation. As a corollary, the market is showing a bearish retracement for altcoin accumulation as the segment’s performance continues to be lower than that of BTC.

July 22–28 Trading Ideas:

Structure Long-Short trading position to benefit from $7,000 BTC levels
Long GoChain on favorable r/r setup given altcoin index outperformance for the month of July

DISCLAIMER

This report has been compiled by Caviar for informational purposes only. The views expressed within are Caviar’s in its entirety. The information within this report is our own opinion only and is not to be used in making a decision for investment. We are not financial advisers, you should consult your own investment adviser before taking any action to acquire or deal in, or follow a recommendation (if any) in respect to any of the financial products or information mentioned in this report. Whilst Caviar believes everything contained in this report is based on information which is considered to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied, and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Caviar or by any officer, agent or employee of Caviar or its related entities. Caviar makes no judgements or representations about the legal status and/ or compliance of any company, cryptocurrency or token mentioned in this report. Caviar may at this time, or at any time in the future, without further notice, open positions in any of the cryptocurrencies or tokens discussed in this report.