August 11, 2023

A bullish inverse head-and-shoulders price pattern is building in the combined market capitalization of altcoins. The term “altcoin” is short for “alternative coin” and, in this case, refers to cryptocurrencies other than bitcoin, ether and top stablecoins. A potential completion of the pattern would signal "alt season," or outperformance of alternative cryptocurrencies relative to bitcoin and ether, according to technical analysis by Josh Olszewicz, a crypto trader and former researcher at Valkyrie Investments. Olszewicz analyzed the charts of altcoins, excluding ether and prominent stablecoins. The inverse head-and-shoulders, one of the most trusted bullish technical analysis patterns in the market, forms when an asset chalks out three price troughs, with the middle one being the lowest. A breakout or a bearish-to-bullish trend change is confirmed once prices rise above the trendline (neckline), connecting the peaks between the lows.

Josh Olszewicz

Crypto exchange Bittrex on Thursday settled charges that it offered U.S. investors access to unregistered securities, agreeing to pay a $24 million fine within two months of filing a liquidation plan for the exchange. The SEC sued Bittrex, which filed for bankruptcy in May, earlier this year, saying it simultaneously operated a securities exchange, broker and clearinghouse without registering itself as such. The SEC has brought similar charges against crypto exchanges Coinbase (COIN) and Binance.US. The SEC further alleged that Bittrex directed crypto issuers to delete public statements that could suggest their tokens might violate securities law.

Inflows to Coinbase’s new Base blockchain were muted on the first day after its official launch, failing to meet the expectations of some crypto traders that massive amounts of capital would flow in.Just over $10 million was transferred to the new blockchain, according to data in a Dune Analytics dashboard, with just over 15,000 new users and 40% fewer transactions than Wednesday. Wallet analysis shows most Base users transferred between $500 to $1,000 worth of ether on average. 

After a quick surge to start the year resulted in a near doubling of its price, bitcoin has traded mostly in a tight range for the past few months, struggling to hold above $30,000 for a sustained period of time.

Since April, and in particular since mid-June, bitcoin's has reversed abruptly anytime it has attempted a breakout above $30,000. The most dramatic occasion came on July 13 when the cryptocurrency surged to a one-year high above $31,800 following a favorable court ruling for XRP in the SEC’s case against Ripple, the firm that sells XRP. Within hours, bitcoin gave up not just the $31,000 level, but also the $30,000 one, and within days slid below $29,000.

The most recent example came this week, when the price climbed throughout the day on Tuesday to top $30,100 late that afternoon. Before news stories about the rally could even be published, bitcoin slipped back more than 1% to about $29,700. Its price at press time was $29,400.

Analysts are pointing to a number of reasons behind the rallies struggling to hold, one of them being the wait for a spot bitcoin exchange-traded fund. 

Source:  Crane, Wall Street Journal

- Omkar Godbole

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