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Update on the Crypto Market: What’s next

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The crypto market is very hard to judge with a lot of volatility around the space. But the market updates keep the investors interested. If we go back into the past, things are improving for the cryptocurrency industry. And, Bitcoin and altcoins are getting more approval than ever before.

Bitcoin (BTC) has been trading in the key support region of $46,666 and resistance of $50,000. BTC crossed the $50,000 mark on August 23rd, 2021 for the first since the last three months.

Regulation heralds the coming age of any new financial instrument. Some might argue that cryptocurrencies do not need help from the authorities. It may sometimes. But for cryptocurrencies to thrive in the masses, they need to be regulated.

Lately, there has been a lot of drama in the Crypto Market. China has threatened Bitcoin and completely ban the mining process.

Increased regulatory scrutiny from China is changing the bitcoin mining landscape. The bans aren’t exactly shocking, but their sudden manifestation and stringency have left miners in the region reeling.

Apart from the problems that miners are facing in China. What effects will this ban have on the crypto society in the future? That’s the crucial question. Well, since the ban news first surfaced, it had its impact on the market for a while. But there’s much optimism considering the circumstances in the US.

It is estimated that a substantial minority around 30% to 40% of China’s orphaned hash rate will end up in the United States, with Texas leading the charge. While the rest of the miners are expected to set up in the Central Asian region.

The U.S. is positioned to benefit greatly from the shakeout. We anticipate over 40 exahashes will be managed by U.S.-based mining pools by the end of 2021.

Recently, there has been a debate in the US government regarding the tax reporting of cryptocurrencies. For now, the US Congress blocked the crypto amendment. It was because of the undefined and broad language of the crypto bill.

Recently there’s been a lot of hype around Non-Fungible Tokens. Popularly known as NFTs. What we’re saying here is that the blockchain world is evolving more than ever. Bitcoin’s adoption by financial institutions is growing. PayPal is a big example recently.

The US government reportedly is pushing to include global crypto data sharing rules in the $3.5 trillion budget package. The Biden Admiration is keen to get hands-on the proper legislation of the crypto markets. The Treasury wants crypto businesses to report information on foreign account holders. So, the U.S. government can share information with global trading partners.

This is a good signal for the crypto community in the long term as we’re heading towards crypto adoption. Now the US government is serious about the crypto market and thinks of it as a major revenue tax stream.

However, former US President Donald Trump, in a recent interview, said that he’s not a big fan of Bitcoin. His stance regarding the crypto industry has been rather strict. If we see Donald Trump once again as the US president, things might get different.

Trump made a statement saying that he would like to see US currency thrive. He doesn’t like it because it’s another currency competing against the dollar. With hurdles, governments will gradually accept the reality and how crypto market can add billions to their economy.

There’s this latest update from Twitter. The social media giant could soon enable users to tip content creators using Bitcoin. This will be added via the latest update to Twitter’s Tip Jar feature.

Market Situation

Moving towards Bitcoin, things are looking good as of September 1. We might head towards a new bull run. Ethereum with the ticker name ETH has really kicked off and has lowered the dominance of BTC to 41.9%. And, Ethereum dominates by 19.1%.

Ethereum dominance means that altcoins are the ones that will benefit the most from the bull run. When there is higher BTC dominance, it means that Bitcoin will have a higher trading volume.

As of September 1, Ethereum’s price breaks $3,500 and hits 3-month highs against Bitcoin. Is Ethereum’s rally signaling the next bull market phase for Bitcoin above $50,000?

Bitcoin has been seeing some consolidation below $50,000 as a psychological barrier. However, during this pullback, several big altcoins have been surging in price, suggesting that the alt season isn’t over yet.

Meanwhile, Bitcoin’s price faces a crucial resistance to breakthrough. While Ether is already cracking that resistance, hitting a three-month high versus BTC. And, facing a run toward the next resistance around the all-time high.

The primary question is now whether this Ether breakout is a signal for Bitcoin to follow suit. And, break through the resistance barriers in September. Historically, September has been a corrective month. Meaning that such a breakout may catch many traders off guard. The critical resistance zone at $51,000 is key to break for Bitcoin to push further upwards.

The daily chart for Bitcoin shows a consolidation between $44,000 and $50,000. This consolidation resulted in a big breakout of altcoins. Some altcoins already broke their previous all-time highs.

The bearish divergence in the chart will only be confirmed when the recent higher low is invalidated and broken downward. At that point, the uptrend is officially reversed.

Currently, the market is consolidating after the rally from Bitcoin’s July lows. The bearish divergence remains unconfirmed until Bitcoin loses the lower bound of the support range, which can be found at $44,000.

Whereas, the total cryptocurrency market capitalization shows a bullish continuation with constant higher lows and higher highs.

The crucial breaker for the market cap to break through is the resistance zone, around $2.12 trillion. Once that one breaks, more upside is likely toward new all-time highs. This structure might also foreshadow Bitcoin’s price trajectory. As the Bitcoin and USDT charts are showing upside.

On the other hand, Ethereum crossing the crucial breaker at $3,400 is a big signal for the crypto market. The difference between Bitcoin and Ethereum right now is that Ether is hitting higher highs, while Bitcoin remains in a sideways range.

So, the critical breaker for Ether is the previous resistance zone at $3,400. As long as that sustains support, continuation toward all-time highs becomes increasingly likely.

However, if a breakdown beneath $3,400 takes place, a potential bearish divergence comes into play. This could end in a correction to $2,600. Such a correction would also affect Bitcoin, which also has a few critical levels to watch as support.

Conclusion

To conclude our analysis of the market, if Bitcoin doesn’t go vertical or has a significant impulse wave. Altcoins are in a splendid position to outperform BTC in the short term. And that’s what the market is currently seeing.

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