Happy new year everyone! This market update is a bit delayed, it's been a busy start to 2019 so far, but let's jump right in.
Bitcoin closed entirely under one of the key monthly support ranges from $4.3-4.7k and is now sitting within the broader support range of $3.0-4.7k. BTC bounced off the 50 month moving average but ultimately was rejected from $4.3k and closed below the range midpoint of just over $3.8k. Overall, Bitcoin is looking neutral as long it holds the 50 month moving average, however it needs to get a close above $3.8k in order to have any signs of bullishness. If 3.0k is lost there's a confluence of support and the 0.886 fib at $2.3k. Until $4.8k is regained there's really no bullish argument to be made on the monthly chart.
As mentioned in the last Bitcoin market update, we got a cross to the upside on the weekly stoch RSI and have seen a 36% move to the upside. However, Bitcoin was ultimately rejected by the range EQ and the 0.786 fib level and recently made a significant move to the downside and is revisiting the bottom of the weekly range while stoch RSI is showing a hidden bearish divergence. That being said, the stoch RSI has not yet crossed to the downside and as long as Bitcoin holds around $3.6k this could simply be a healthy retracement as the original upside move was not wiped out and the 200 week moving average is providing support. If it does close back below $3.6k (note: close below is key, temporarily moving down to $3.4-3.5k is fine) then I suspect we see the lower support range from $2.5-3.0k tested and until there's a decisive close above $4.1k this looks more like bearish continuation than a market bottom.
Support: $3.6k, $3.0k below that
On the daily, Bitcoin actually regained the 50 day moving average for the first time since late September, however it never managed a clean break above the red resistance zone and the range equilibrium just above $4.4k and recently broke back below the 50 day moving average. However, there are some bullish signs here as well as Bitcoin did reclaim the 50 DMA, however briefly, for the first time in months, the range low of $3.6k has so far held and there's a hidden bullish divergence on the stoch RSI. There was also a pretty violent reaction to a key support structure on the lower time frames as shown in the following 4H chart.
Overall, the daily chart is still showing some signs of bullishness and as long as there aren't any decisive closes below $3.6k and price doesn't move below the $3.35-3.4k level shown on the 4H chart I'm optimistic there's could be a move to test the range high around $4.4k.
Support: $3.6k, with argument for $3.4-3.5k on lower time frames
High time frame Bitcoin charts look neutral as they are sitting within support ranges, though that's of course in the midst of a bear market so it is therefore neutral-bearish at best. Both the monthly and weekly charts need strong closes above $4.0k to show any sign of bear market reversal. On the daily, $3.6k is a clear must hold level for the near future if Bitcoin is to maintain any bullish upside though a brief move to around $3.4k is not out of the question. If $3.6k is decisively lost, most signs point to sub-$3.0k.
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Ethereum has had an incredibly strong couple of weeks. It bounced exactly from the $80 support level and followed it up with a massive candle to the upside and has continued to run up, partly off the back of Constantinople news. ETH ran up far more than Bitcoin, a full 100%, before getting rejected by the $155 resistance level. It has now retraced to the mid-$120's but the question is whether this is a buy the dip opportunity or if there's more downside in store. On the bearish side the weekly stoch RSI is showing a clear hidden bear divergence and unlike Bitcoin, the RSI reflects this as well. However, from a bullish perspective the support range from $114-$126 is intact and the mid-point has not been breached. Provided $120 holds I lean bullish though it's likely Ethereum takes a tumble after the Constantinople fork.
Support: $114, $120
On the daily Ethereum looks reasonably bullish. Despite being unable to break the resistance around $160 and dumping shortly thereafter, ETH has held the range equilibrium of $121 and has not broken through the green support zone which is key to it's bullish structure. Furthermore, like Bitcoin there's a hidden bullish divergence on the stoch RSI which adds to the bullish argument. However, keep in mind that the Constantinople fork is only a few days away and considering how much more Ethereum moved than Bitcoin the hard fork may well be the thing that fuels a major retracement in which case I'd look to the range lows.
Support: $121, $114
Resistance: $145, $160
$114 and $120 are critical levels for Ethereum and provided they hold then the outlook for Ethereum is quite bullish. However, hard forks are often met with a dump upon conclusion so I'd be hesitant holding a position too close the to 16th.
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