The cryptocurrency market experienced significant bearish pressure during the first week of July, resulting in substantial losses across the board. Bitcoin (BTC) spearheaded the downtrend, consistently hitting lower lows amid sustained selling pressure. This downward trend reverberated throughout the market, causing the global crypto market cap to shed $140 billion, dropping to $2.11 trillion, its lowest since late February. Despite most assets being down, a few showcased remarkable recoveries. Here are our top picks for cryptocurrencies to watch this week following their notable performances during last week’s downtrend:
Bitcoin Drops to 5-Month Low
Early Week Performance
Bitcoin’s start to the week was mildly bullish following a consolidation phase two weeks prior. However, bearish pressure soon emerged, as the leading cryptocurrency diverged from U.S. equities, which were in a bullish phase at that time.
Contributing Factors
BTC faced its toughest bearish pressure of the year due to several factors:
- Bankrupt exchange Mt. Gox began creditor repayments.
- The German government distributed thousands of BTC tokens.
- New holders started selling off their assets.
- Miners showed signs of capitulation.
Market Impact
Last week alone, Bitcoin lost multiple psychological thresholds, plummeting from $63,000 to $58,000. The asset hit a 5-month low of $53,485 on July 5 but rebounded shortly thereafter. Despite this mild recovery, BTC ended the week with a 4.5% drop, slightly above $58,000.
Current Status and Future Outlook
At press time, BTC has once again fallen below the $58,000 threshold, experiencing an additional 1.13% drop. Nevertheless, it remains above the lower Bollinger Band ($56,347). Bitcoin’s hopes for a full recovery hinge on its ability to reclaim the 20-day SMA ($61,509) and the upper Bollinger Band ($66,676).
Litecoin Slumps 12%
Early Week Performance
Litecoin (LTC) was one of the numerous victims of last week’s market collapse. The asset showed resilience at the start of the week, largely consolidating from June 30 to July 2.
Midweek Challenges
As pressure mounted, LTC recorded three consecutive intraday losses from July 3 to 5, dropping 18.6% within this period. The market staged a mild rebound on July 6, allowing LTC to gain 5.72%. However, it closed the week with a 12.7% loss.
Technical Indicators
Litecoin’s MACD line crossed below the Signal line on July 4, confirming the bearish momentum. With both lines currently sloping downward, this suggests that bearish momentum is increasing.
Current Status and Future Outlook
For LTC to mount a formidable defense against further declines, it needs to decisively close above Fib. 0.236 ($64.60).
TRX Bucks the Trend, Hits 4-Month High
Early Week Performance
Tron (TRX) was one of the few assets that defied the overall bearish trend last week. TRX started the week with an indecisive bearing but eventually increased 3.5% over four days to $0.12997 on July 3, aiming to recover the $0.13 territory. The last time Tron saw this level was on March 13.
Market Response
The retest of the $0.13 region coincided with the widespread market drop. Tron crashed 6.7% to a low of $0.12117 on July 5 but immediately rebounded.
Late Week Performance
A recovery push on July 6 helped TRX reclaim bullish momentum, leading to a four-month high of $0.13028. Tron closed the week with a 3.5% increase.
Analysis of Contributing Factors
Global Economic Influence
The global economic environment has a significant impact on the cryptocurrency market. Economic instability, inflation fears, and regulatory news often drive market sentiment, affecting asset prices.
Technological Developments
Technological advancements and updates within the blockchain and cryptocurrency space can also influence asset performance. Upgrades, new features, and partnerships often lead to price spikes as investor confidence grows.
Market Sentiment and Speculation
Market sentiment and speculative activities play a crucial role in the volatility of cryptocurrencies. Rumors, news events, and social media trends can cause sudden price movements, as seen with Bitcoin’s response to Mt. Gox repayments and the German government’s BTC distribution.
Predictions for the Coming Week
Bitcoin (BTC)
BTC’s performance in the coming week will largely depend on its ability to reclaim and maintain key thresholds. If Bitcoin can surpass the 20-day SMA and upper Bollinger Band, it may signal a recovery phase. However, failure to do so could result in further declines.
Litecoin (LTC)
LTC needs to break past the Fib. 0.236 level to mitigate the ongoing bearish trend. A successful close above this level could instill confidence among investors and initiate a recovery phase.
Tron (TRX)
TRX’s recent performance suggests it has the potential to continue its upward trajectory. Maintaining momentum above the $0.13 level will be crucial for further gains.
Investment Strategies for This Week
Diversification
Investors should consider diversifying their portfolios to mitigate risks. Holding a mix of assets can help balance potential losses from underperforming assets with gains from outperforming ones.
Monitoring Technical Indicators
Staying informed about technical indicators such as MACD, Bollinger Bands, and SMA can provide insights into potential market movements. Regularly checking these indicators can help investors make informed decisions.
Staying Updated with News
Keeping abreast of the latest news and developments in the cryptocurrency space is crucial. News events often trigger significant market movements, and being informed can help investors react promptly.
Read also: Is The Worst Over For This Crypto Crash? [What’s Next For Bitcoin]
