29 August 2021: After a profitable run up, in some cases even doubling in price in a month, the cryptocurrency market has slowed over the past week for some coins and shows a potential bigger pullback possibly on the horizon. This article will once again keep an eye on Bitcoin, Cardano, and others as the markets move into the weekend, and more importantly, into the month of September.
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Mighty Bitcoin Slows.. For Now
Based on the rising indications of greed in the markets, a pullback was essentially guaranteed, as we discussed in our last weekly market update. Currently, the Fear & Greed Index is still showing a score of 71, indicating that the market is still greedy despite the recent pullback. Bitcoin, while still in an obvious upward trend, did in fact fall out of its recent upward price channel, and Bitcoin is actually currently retesting this level right now. Take a look at the price chart below:
The above set up shows that Bitcoin did in fact close below the recent price channel, and Bitcoin is currently testing that level right now. So, with that in mind, two immediate short term outcomes are possible. The first is Bitcoin breaks down and heads lower to the next support level just above $44,000 USD. This would give everyone a great buying opportunity with a bounce and rebound back towards $50,000 USD.
The other possibility here is that Bitcoin breaks right back into the recent price channel and heads for $50,000 USD by the end of the month, setting up the month of September with an already established $50,000 Bitcoin. The daily close today (27/8/2021) will give us valuable insight in the directional movement of Bitcoin.
Extreme Volatility on Cardano Continues
Cardano's $ADA has been extremely entertaining to watch and very profitable for highly experienced day traders. After the massive rally on to nearly $3 and a new all time high, a major pull back brought Cardano, at least temporarily, back down to Earth to around $2.46. From there, it has since rallied again up to the $2.70s range. Check out the price chart below:
The question now is whether Cardano, and really the entire cryptocurrency market, is a dead cat bounce or late summer rally. When considering the Fear & Greed Index, market sentiment points towards a larger pullback than people are initially preparing for - this would especially be the case should Bitcoin head to support at $44,000 USD. However, rising bearish sentiment, especially on platforms such as Twitter, could precisely be the sentiment change needed after a larger pullback to again reverse and rally much, much higher.
It should be noted too that the market could potentially rise for months under a greedy sentiment just as it did back in the spring leading up to the large May correction. For most short term, new, or small cryptocurrency investors, this is obviously not ideal. That said, it is also precisely why each cryptocurrency investor should really prepare for this event - especially those who have been HODLing coins through the May correction.
1. Always have funds either in cash or in SAFE, RELIABLE stablecoins
This gives each cryptocurrency investor leverage in the event of these pullbacks or corrections.
2. Find ways to earn cryptocurrency outside of market purchases
This is exactly what platforms like Publish0x do. Finding a web3, cryptocurrency-powered platform to earn additional cryptocurrency from can help tremendously by building up funds even through market volatility
Keep an Eye on the World Economy & Central Bank Policies
This is a point many in the cryptocurrency market are more or less ignoring. Crypto has benefited tremendously from the continuous printing and expansion of FIAT currencies really since 2008 and the inception of Bitcoin. During the pandemic however, this money printed has increased exponentially. The short term projections of cryptocurrencies are all reliant on the Federal Reserve and other central banks continuing their relaxed monetary policies of low rates and quantitative easing.
There has been some slight rising sentiment of tampering talks amongst central bank officials. This is something to keep an eye on. In the event that central banks raise rates to fight rising inflation, a deflationary contraction could cause many asset classes to crash - cryptocurrencies are not free from this either. Is this going to happen tomorrow? The probability is low, but it is something to keep a close eye on as the world moves into the month of September.
Summary
This coming weekend should give us all a much better idea about the direction the cryptocurrency markets will go for the next week leading into September. It should also be noted that a number of coins, including the likes of Monero, Solana, and Ampleforth Governance Token, have all seen gains less coordinated with current market price fluctuations. This is a great example of why having a diversified portfolio can help each cryptocurrency investor continue to make gains even when the market itself is slow or in a general pullback.
The important thing to take away from this market update is to be smart, set yourself up for the best possible success, and to not get lost in either the FUD from bears or the FOMO from perma-bulls. The market is naturally going to have these fluctuations, but it is important to consider all micro and macro factors that could have an influence on the coming weeks & months for cryptocurrencies.
Coming soon will be our updated Top 10 cryptocurrency list for September, so be sure to keep an eye out for that article should you be looking for different projects to expand your portfolio with. Until then, best of luck and we will be back next week with a new market update!
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