The Lone Ranger
After a failed breakout Bitcoin continues to range
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Cheat Sheet -
Support and resistance levels and our daily, weekly and monthly bias on BTC, GOLD, OIL, ES, and NQ as well as our favorite altcoins
What We Are Watching
We further breakdown our case for these cryptos here : What We Are Watching
Crypto News
3AC's Zhu Su breaks silence, accuses liquidators of 'baiting' (The Block)
Magic Eden launches venture unit to invest in web3 gaming startups (The Block)
Uniswap liquidity provider hacked for $8 million in phishing attack (The Block)
Gnosis Safe Rebrands as Safe, Raises $100M (CoinDesk)
GameStop’s NFT Marketplace Goes Live (CoinDesk)
U.S. trademark and copyright offices to study IP impact of NFTs (CoinTelegraph)
Korean fintech plans to create 10k Web3 jobs amid bear market (CoinTelegraph)
Swiss Post's banking arm developing crypto custody platform (CoinTelegraph)
Shanghai Allocates $1.5B to Metaverse Development Fund (Blockworks)
Crypto Increasingly Used To Pay Salaries in Developing Economies (Blockworks)
Lido Token Jumps 24% as Staked Ethereum Slowly Repegs (Decrypt)
BTC Outlook
BTC fell below $20k last night shortly after CZ, the CEO of Binance, tweeted that their risk team had noticed an exploit occuring on UniV3. If you are unfamiliar with UniV3, it is a protocol that allows user to provide liquidity for crypto pairs to be swapped, e.g. Bitcoin/ETH. It was quickly determined that there was not an exploit but the funds were stolen through a phishing attack by airdropping a token to Liquidity Providers that was a poison pill. The news temporarily shocked the markets because if the exploit had been true that means millions of dollars worth of liquidity could have been vulnerable and with liquidity removed prices swing faster.
However, Bitcoin was unable to make a new low and this morning has risen back to $19900. You could take this as a sign of trend exhaustion because this bad news was unable to be the catalyst for a new low. This is similar to when Bitcoin was in the height of the bull market and good news was unable to push it to new highs. Of course, anything can happen and with the state of global markets, uncertainty alone may be enough to push the price lower in the coming months.
For now, Bitcoin is back to trading in the range we’ve pointed out between $21k and $19k. Until it rises above and holds $21k as support or falls below $19k and meets it as resistance then BTC will keep ranging sideways. Last weeks breakout failed to find support and now we are back to sitting and waiting to see what happens.
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Possible Course of Action
Long spot here with multi-year timeline
Do nothing and wait for breakout or breakdown
Trade the range: short near $20k, long $19k
The Bulls’ Defense:
Holding $19,000 as support (big round number)
The Bears’ Prosecution:
Global macro uncertainty
Tech stock correlation
ETH Outlook
Not much has changed with ETH since our post on June 30th : ETH Outlook.
The ETH/BTC ratio is currently swinging back down toward the bottom of this wedge. Note that this volatility squeeze on the pair could continue into early August. Just like with BTC watch for breakouts or breakdowns with confirmation by either the top holding as support or the bottom acting as resistance. Until then expect this range to slowly squeeze tighter through the second half of July.
Possible Course of Action
Caution here as ETH is highly correlated with the tech stock sell off
Wait for BTC to rise above 50-day MA before long ETH
Long if price breaks above the top of this wedge and holds as support
Short if price breaks below the wedge and meets it as resistance
The Bulls’ Defense:
EIP-1559 has burned $2,707,302,245 (2,529,787 ETH) so far. Supply constraints should continue to have a positive impact on price.
ETH 2.0 launch
The Bears’ Prosecution:
EIP-1559 ETH burn has slowed down due to low network usage
Global macro uncertainty
Nasdaq correlation and sell off
ETH/BTC pair continues to be weak
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