Bulls and bears continue to struggle to push the price in their desired direction. The news flow is in favor of bears. Credit rating agency Fitch downgraded the long-term credit rating of the United States from AAA to AA+ on August 1st, which caused a temporary surge in Bitcoin. However, rumors about the US Department of Justice and low trading volumes support the bears.
Bitcoin (BTC) Commentary
Bloomberg ETF analysts Eric Balchunas and James Seyffart stated that the probability of approving a Spot Bitcoin ETF increased from 1% to 65% after BlackRock. However, there is a problem. ETF approval can be expected in the long term and it is a great development. But in the short term, no one cares. There are many problems that investors need to overcome in the short term. Risk appetite may not increase without the following 7 events:
- The Fed’s declaration of an interest rate ceiling (further increases cause fear)
- The US avoiding a recession by the end of the year (markets experience significant sell-offs during recessions)
- A devastating blow to Binance exchange by the US (could cause a destructive bank-run on the exchange)
- Market makers returning to the game (low trading volumes are one of the most important factors undermining risk appetite)
- The US getting rid of sticky inflation (sticky inflation can push interest rates above 6%)
- The US unemployment rate approaching the desired level of 4.5% by the Fed (inflation will not reach the desired level without weakening employment)
And many more. With all these factors, no one is evaluating the ETF approval that will come in 10 months. Short-term stomach-turning risks do not stimulate risk appetite, even if an elaborate feast is seen in 10 months.
Let’s turn to the price. Bitcoin bulls pushed the price above the 20-day exponential moving average (29,596 dollars), but they are struggling to overcome the 30,000 dollar barrier. This shows that bears are not giving up and are selling on rallies.
The 20-day EMA is flattening, and the relative strength index (RSI) is just below the midpoint, indicating a formation of a range in the near term. The boundaries of the range could be 30,050 on the upside and 28,585 dollars on the downside. If buyers push the price above this narrow range, the BTC/USDT pair could rise to the general resistance zone between 31,000 and 32,400 dollars. On the downside, a close below 28,585 dollars has targets at 27,500 and 26,000 dollars.
Ethereum (ETH) Commentary
Bears are trying to strengthen their positions by keeping the price below the 50-day simple moving average (1,864 dollars). If they succeed, the ETH/USDT pair could drop to 1,813 dollars. A breakdown and close below this level will push the price to 1,700 dollars. In the scenario of ongoing selling pressure, 1,626 dollars is a possible target.
If bulls want to prevent a short-term decline, they will have to overcome the hurdle at the 20-day EMA. This could initiate a rise towards the 2,000 dollar resistance. Similarly, ETH investors are not concerned about long-term positive developments such as possible ETH ETF approval or negative ETH inflation due to the aforementioned short-term risks.
