Crypto Market Commentary & Outlook
(May 24th – 2022)
Bitcoin (BTC) Technical Analysis & Outlook
Given the mayhem in the traditional markets again today it comes as a bit of a surprise that bitcoin is holding up as well as it is, finding support around the $29k area like it has been for a few weeks now. This is lining up with our call for new lows in US equities and a hold of the $25k lows for BTC, a divergence that would likely kick off a rally into the low to mid-$30k’s, which is looking increasingly likely for the time being. It also helps that Wall Street continues to get more and more bearish on BTC and crypto with contrarian indicator Scott Minerd coming out with an $8,000 downside target for BTC, so a countertrend bounce seems appropriate, although we’ll still be using strength to move to cash in case of another leg down to new lows later in the summer or early fall.
TradingView Bitstamp BTC/USD 6-hour linear chart
We’ll begin with a look at the 6-hour chart for a view of the shorter-term technicals where we can see that price is back down in the middle of the current trading range following a TD 9 sell signal yesterday which has turned the count to bearish today, SCMR signals to red, and candle formations bearish all while new SCMR resistance builds overhead, all bad news for the bulls moving forward. The fact that price is back below the 50 SMA while the 100 and 200 SMAs fall is also not great for the bulls over the coming days, and neither are the momentum or volume indications, therefore we’re sticking with the call for more near-term downside to the $27k region where we’ll look for some signs of a reversal.
Short-term Trade Idea: Buy weakness between $26k – 27k for shorter-term upside to $32k.
TradingView Bitstamp BTC/USD daily linear chart
Next up we’ll look at the daily chart for a view of the medium-term setup which is confirming our negative shorter-term forecast from above considering that the TD count is still bearish, candle formations are lackluster, SCMR signals are back to red, and all of the moving averages are accelerating to the downside, therefore we want to move firmly to the sidelines until we get signs of a sustainable reversal on the higher timeframe charts. This means that sizing on the ST trade idea should be small and profits should be taken at the first sign of a top (likely either $32k or $34k) given the likelihood of lower prices over the summer before a true bottom materializes.
Long-term Trade Idea: Stay neutral until further notice.
Monero (XMR) Technical Analysis & Outlook
TradingView Binance XMR/BTC daily linear chart
XMR/BTC continues its run to the upside this week on still fairly bullish candle formations, bright green SCMR signals, a still bullish TD count (5), and vastly improved market structure, all of which is keeping the bulls in the driver’s seat for now. The still favorable momentum and volume indications also suggest that some additional upside is likely over the coming days, probably to the 0.0070 area, where we’ll take profits once again like we did at 0.0065. This is because we expect a pullback near the 0.0070 level, hopefully down to another buyable higher low that we can take advantage of once again.
Trade Idea: Hold current positions for shorter-term upside to the 0.0070 area.
TradingView Bitfinex XMR/USD daily linear chart
XMR/USD is flirting with the key $200 level this week on mostly bullish candle formations, green SCMR signals, a bullish TD count (5), and improving momentum and volume indications, all good news for the bulls over the shorter-term. Having said that, there is a ton of moving average and supply area resistance between $200 – $220 so we have already started taking small profits from lower levels with more sales planned for the $210 – $220 range.
Trade Idea: Hold current positions for shorter-term upside to the $205 and 215 areas.
Pirate Chain (ARRR) Technical Analysis & Outlook
TradingView Kucoin ARRR/BTC daily linear chart
ARRR/BTC is making new local and regional lows today on a small but bearish candle formation, red SCMR signal, and bearish TD count (6) while the 100 SMA rolls over to join the 50 and 200 SMAs in a downtrend for the first time since early March, none of which bodes well for the bulls over the shorter-term. The quickly deteriorating volume indications are also a bad sign for the bulls moving forward, although we do have a large bullish MACD divergence and almost a recharged RSI reading while support grows in the high-0.00001000’s which is where we’ll look for signs of a reversal.
Trade Idea: Buy weakness below the 0.00001800 level with a shorter-term target of 0.00002600.
TradingView Kucoin ARRR/USDT daily linear chart
ARRR/USDT is very close to breaking down to new local, regional, and cycle lows, and below the previous cycle lows, on another small red SCMR signal, bearish candle formation, bearish TD count (7), and abysmal market structure, all suggesting that a breakdown is likely in the near future. The awful looking volume indications also point to more weakness over the coming days, however we do have a huge bullish MACD divergence and recharged momentum so if there is a lack of follow-through below $0.62 then we’ll look to start buying near the SFP (swing failure pattern) lows.
Trade Idea: Stay neutral until further notice.
Equilibria (XEQ) Technical Analysis & Outlook
Coinigy TradeOgre XEQ/BTC daily linear chart
XEQ/BTC continues to grind to the downside following the bull trap high earlier in the month with prices now below the 50 SMA on broken and bearish market structure while the momentum oscillators continue to unwind, all fairly worrisome news for the bulls moving forward. That said, the volume indications hint at waning strength for the bears and there is strong support in the 0.00000700 area via the rising longer-term moving averages, intermediate-term demand area, and OTE sweet spot, therefore we’ll start to get interested again on the long side in that region if given the chance.
Trade Idea: Buy weakness below the 0.00000700 level with a medium-term target of 0.00001100.
CoinTraderPro CoinMarketCap XEQ/USD daily linear chart
XEQ/USD has moved below the 100 SMA this week, which is rolling over to the downside in conjunction with the 50 SMA, which has broken market structure and opened the door to a large Head & Shoulders top, certainly not good for the bulls moving forward. Having said that, the momentum and volume indications look surprisingly strong considering the recent action, and if the 0.20 area can hold then the H&S will be voided, therefore that’s the level we want to watch for a reaction and hence a sign that we can begin to get long once again.
Trade Idea: Stay neutral until further notice.
Good Luck, Good Trading!