It's been a long time since a market update but better late than never and what better time than now to analyze than the recent cryptocurrency market action?
Bitcoin Monthly Chart
Things are pretty clear on the monthly. After consolidating just below $4,000, Bitcoin and closed above the 5 period MA for the first time in this bear market and did so in a spectacular fashion, clearing the $4,300-4,700 resistance. Above that, there was a lot of clear sky so it was no surprise to see Bitcoin quickly move into the mid-high $5,000's and it's possible for price to push to $6,300 or even higher to the 21 period MA; however, based on lower timeframe charts I don't think it's in the cards yet. Let's be clear though, in all likelihood the bear market is over and any move back towards the $4,300-4,700 region is a fantastic buying opportunity and where I'll be looking to add.
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The weekly chart is a sight to behold. Price tested the 200 period MA twice, offering an amazing buying opportunity for those who had the guts at the time. Bitcoin then began consolidating in an ascending triangle and hinted at a breakout when it managed to close slightly above the 21 period MA. Shortly after, BTC made a strong move to the upside and has continued ever since and is currently attempting to breach the 50 period MA which I'll be honest, I didn't expect. However, Bitcoin is now ramming up against the zone that held for nearly all of 2018 and this is not the time to be jumping into a long position. RSI and price action have been strong so it wouldn't surprise me to see a push up into that red box and into the low $6000's but the risk/reward just isn't there for me. For starters, it's longing right into resistance and OBV and volume are both showing bearish divergences. I'm much more comfortable sitting on the sidelines here and missing out on a $500-600 move to the upside if it happens. I'm mostly flat and will further reduce my position if we do hit that $6,050-6,150 region with the intention to long on a close above $6,300 or down around $4,600 if Bitcoin breaks down.
Support: $5,300 is the immediate support, if it breaks down I expect $4,300-4,600 to be a strong support
Resistance: $5,850-6,150 is immediate resistance though wouldn't be comfortable adding anywhere below $6,300
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Now the daily chart is when Bitcoin really starts to show some signals that the top may be close. Price is coming right into that supply zone that held for most of 2018 and clear bearish divergences are showing up on both RSI and Volume, despite OBV holding strong. Short interest is still very high so I could see one more push into the low $6,000's, but as I mentioned earlier this is not an area I'm looking to jump into longs. I'm mostly flat and will reduce further if we do get that last push up, at which points I may contemplate a short depending on how things look. It's clear that Bitcoin is going to pullback, it's more a question of when and how far. In the short term, it may only pull back to the bottom of the channel into the $5,200's. Longer term, I think we do get a pullback into the mid-$4,000's, though I think we move higher first. Regardless, I'm keeping some fiat on the sidelines for that pullback if it ever does come.
Support: $5,500-5,550 offers immediate support, below that is the channel support around $5,200-5,350. If these levels break I expect $4,350-4,600 to be a critical level.
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The weekly Ethereum chart is really clean. Price failed to break above the $175 resistance and is now retracing to the key $155 level. It's unclear whether this level holds or not and if it doesn't I think it's likely that ETH re-tests that lower trendline and the 21 MA which should put it in the high $130's to low $140's. I'm flat on ETHUSD and will look for potential longs in that zone. Eventually I think Ethereum tests that red box in the $275-300 zone.
Support: $155, $140
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Litecoin is another really clean chart. Price was rejected by the $95 resistance and has since fallen below $80 which has not flipped to resistance. However, $65 is a strong weekly level and I added some there. It could go a bit lower and I'd continue adding in the low $60's as the halving isn't far off now. I expect LTC to hit $120 in the not too distant future.
Resistance: $80, $95
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Altcoins - A look at BTC Dominance
Recently, BTC broke out of this triangle and altcoins got absolutely hammered. Hopefully you're not bagholding too many alts as many are down 50% or more. I could see dominance go a bit higher yet to the 57-58% level which would cause further sell off across some alts. However, I think BTC dominance is close to peaking and many altcoins are offering some tantalizing setups; it might be time to start carefully accumulating. However, a BTC dump could trigger new lows so play it safe and move slow. Make sure to focus on coins with good FA, upcoming catalysts or that have held key levels rather than diving into price discovery. I'm eyeing up a few which you may see on my Twitter, but here's one example from the alt index itself, ETH.
Buying altcoins? Try Binance.
Ethereum has been hammered against Bitcoin, as have most cryptos. However, despite the bearish looking chart it's nearing a level I'm really interested in and have placed preemptive bids. If filled, the first areas I'd look for a reaction are the orange line, which is a key weekly level, and the red line which is strong daily resistance. The risk/reward in this zone is too good to pass up and I think the better altcoins out there don't have too much more downside in store.
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