Weekly Forecast: End of the Selloff? Bitcoin Leads Crypto Market Upswing

The bitcoin market has exhibited unusual calm in recent days, with the technical charts confirming a strong pick-up in momentum and price action that could pave the way for a short-term breakout. As we’ve seen before, where bitcoin goes, the broader market will soon follow.

At the time of writing, bitcoin owns 53.7% of the overall cryptocurrency market capitalization, according to CoinMarketCap. Bitcoin’s dominance rate peaked around 54.5% earlier this month.

Bitcoin’s Next Move?

The bitcoin price made a convincing break higher on Saturday, offering further evidence that bear market pressures were eroding. The leading digital currency traded as high as $6,799.70 on Bitfinex, which is roughly $100 shy of last Tuesday’s peak. (As Hacked reported, BTC received artificial stimulus on Tuesday after Bitmex, a popular trading platform for derivatives, experienced a temporary shutdown.)

At the time of writing, bitcoin is holding steady just below $6,690, according to Bitfinex. The next major resistance is $7,000.

Bitcoin’s slow grind higher has been accompanied by unusually low volatility, with market prices fluctuating within a narrow $200-$300 range. At one point Friday, BTC volatility was on track for its lowest level of the year.

SEC to Review Recently Rejected Bitcoin ETFs

The U.S. Securities and Exchange Commission (SEC) has announced it will review the wholesale rejection of nine bitcoin exchange-traded funds (ETFs) submitted by Direxion, ProShares and GraniteShares. The agency on Aug. 22 declared that none of the proposed funds addressed its concerns over manipulation and liquidity in the bitcoin futures market.

According to several analysts, including CNBC’s Brian Kelly, the SEC is moving closer to approving its first bitcoin ETF.  So far, the fund that is most likely to be approved is the VanEck SolidX Bitcoin Trust. Unlike its predecessors, the VanEck fund will be backed by physical bitcoin and insured against theft.

Earlier this month, the SEC delayed its ruling on the VanEck SolidX Bitcoin Trust until Sept. 30. In the meantime, investors can expect the debate over bitcoin ETFs to remain front and center.

The Week Ahead

The following is a high-level overview of the week’s major market-moving events.

Monday

The week begins with a report on German business confidence courtesy of the IFO Institute. In the United States, the Chicago Federal Reserve Bank will release the National Activity Index for July. Later in the session, the Federal Reserve Bank of Dallas will report on regional manufacturing conditions.

Tuesday

U.S. economic data will dominate the headlines on Tuesday, beginning with the monthly goods trade balance. Washington’s deficit with the rest of the world is forecast to widen for the month of July.

S&P/Case-Shiller will release the latest indicators on domestic home prices. Separately, the Federal Reserve Bank of Richmond will unveil the August version of its closely-watched manufacturing index.

Wednesday

On the data front, the U.S. government will release the revised estimate of second-quarter gross domestic product (GDP). The preliminary estimate showed annual growth of 4% in the second quarter.

Thursday

In cryptocurrencies, Tron will complete its scheduled upgrade of the Tron Virtual Machine mainnet on Thursday.

In traditional markets, a slew of Eurozone sentiment indicators are on tap for Thursday, including consumer confidence, industrial confidence, economic sentiment and business climate.

The U.S. government will also release the monthly personal income and outlays report, which includes the latest reading on core personal consumption expenditures (PCE), the Federal Reserve’s preferred measure of inflation.

Friday

Bytecoin’s “consensus update” hard fork is expected to occur on Friday. The upgrade will enable users to set dynamic transaction fees, something the Bytecoin team says required “considerable investment in time and energy.”

Separately, Cardano will release version 1.3 of the protocol, which includes network enhancements, code refactoring and upgrades to the Daedalus wallet.

In economic data, China will release a pair of PMI reports covering manufacturing and services industries. Meanwhile, the European Commission’s statistical agency will release preliminary inflation data for the Eurozone economy.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi