Crypto Market Commentary & Outlook
Bitcoin (BTC) Technical Analysis & Outlook
As we turn the page into a new year so too are we turning the page into a new crypto market, likely devoid of the type of selling pressure that we got used to over the past few years and filled with consolidations and recoveries that should offer more opportunities on the long side heading into the bitcoin halving next Spring. Having said that, recent technical overextension paired with an increasingly active news flow (such as today with the DoJ enforcement news) has likely put a short-term top in for bitcoin and the major altcoins leading to lower prices over the coming days, a pullback that we are happy to buy given the current circumstances.
TradingView Bitstamp BTC/USD daily linear chart
We’ll begin this new year with a look at the bitcoin daily chart where we can see that the bulls lost momentum in the supply area coming off of the November highs this week resulting in a breakdown from a bearish rising wedge pattern on a bearish long-legged candle formation and a flip to a fresh red TD count following a green 8 yesterday, none of which bodes well for the bulls over the near-term. Very overbought momentum oscillators and a bearish MACD divergence also point to more downside heading into the weekend, as do the correcting volume indications, although we’re ready to buy the dip at the 200 SMA at $19.5k as well as the confluence area of the top of the OTE long zone, rising 100 SMA, and top of the upper demand area around $18.2k.
Short-term Trade Idea:Buy weakness below $19k for medium-term upside to $24k.
TradingView Bitstamp BTC/USD weekly linear chart
Next, we’ll look at the weekly chart to see where the longer-term technicals stand to start this new year and for now things are looking much better for the bulls considering we had an SCMR reversal confirmation last week on a large bright green signal that is being followed up by a green TD 3 with little in the way of resistance until the moving average confluence around $24k. That is also where TD and historical resistance reside so there will likely be profit-taking there, however until then the momentum and volume indications suggest that dips should be bought with a $24k target until further notice.
Long-term Trade Idea: Accumulate below $20k for longer-term targets in the $100k range.
Monero (XMR) Technical Analysis & Outlook
TradingView Poloniex XMR/BTC weekly linear chart
XMR/BTC has finally topped out following months of upside and multiple sell signals resulting in a large orange SCMR bearish pivot bar last week and a flip to a red TD count that is being followed up by another bearish candle formation and a red TD 2. Price has also broken short-term market structure while the momentum and volume indications begin to correct, all pointing to more downside over the short to medium-term. Having said that, we continue to believe in the long-term uptrend so we want to be buyers of the dip in the 0.0068 and 0.0059 areas if given the opportunity.
Trade Idea: Accumulate below 0.0070 for a medium-term target of 0.0105 and a longer-term target of 0.0200.
TradingView Bitfinex XMR/USD daily linear chart
XMR/USD has finally begun to correct as well following a TD 9 sell signal on Monday and flip to a bearish count yesterday on a large breakdown candle that broke short-term market structure and is being followed up by a small but bearish candle and red TD 2, all bad news for the bulls moving forward. The deterioration of the momentum and volume indications and a lack of major support immediately below the market are also ominous signs for the bulls over the shorter-term, therefore we’re expecting more downside into the support confluence around $145 which we would be buyers of if given the chance over the next few weeks.
Trade Idea: Accumulate below $145 with a longer-term target of $2000.
Ethereum (ETH) Technical Analysis & Outlook
TradingView Bittrex ETH/BTC weekly linear chart
ETH/BTC continues to trade inside of a triangle formation, although the pattern has morphed from a symmetrical into a more bullish ascending triangle on what are still mostly green and neutral SCMR signals and still favorable shorter-term market structure, all of which is good for the bulls from a longer-term perspective. The green TD count (3), rising moving averages, active SCMR support, and highly encouraging volume indications also suggest higher prices throughout this year, however momentum is looking fairly shaky so if a triangle breakdown materializes over the next few weeks we’ll be buyers below the 0.070 level.
Trade Idea: Accumulate around and below 0.070 for longer-term upside to the 0.100 area.
TradingView Coinbase ETH/USD daily linear chart
ETH/USD has topped out in the November supply area on a green TD 8 -> red TD 1 combo just like BTC while support is nonexistent until the 200 SMA around $1400, so we are expecting lower prices before another major rally materializes. The toppy momentum oscillators and correcting volume indications also suggest that sellers are getting more active now, so we’ll stay patient for a pullback to the $1300 – $1400 range before getting active on the long side again.
Trade Idea: Buy weakness below $1400 for longer-term upside to the $10k area.
Dero (DERO) Technical Analysis & Outlook
TradingView Kucoin DERO/BTC weekly linear chart
DERO/BTC continues to consolidate just above the 0.00020 level on neutral SCMR signals, mixed candle formations, a mixed TD count, and flatlining moving averages converging on price, all suggesting more sideways action over the shorter-term, however new SCMR resistance just overhead and bearish shorter-term market structure point to another leg lower before the bulls step back in. Highly negative money flow and deteriorating momentum oscillators also point to a slightly bearish bias moving forward, although we would be buyers below 0.00019 so downside is relatively limited for the time being.
Trade Idea: Accumulate around and below 0.00019 for longer-term upside to the 0.00100 area.
TradingView Kucoin DERO/USDT weekly linear chart
DERO/USDT is holding up nicely around the $4.50 level despite the volatility in the BTC market today, a sign of continued long-term bullishness, as are the green SCMR signals and the green TD count (3). Momentum also still looks decent for the time being, however highly negative volume indications and resistance overhead around $6 are likely to keep price in an accumulation/consolidation phase between $4 – $6 for the foreseeable future, therefore buying dips and selling rips is the short-term strategy while also buying for long-term holding near and below $4.
Trade Idea: Accumulate around and below $4.00 for intermediate-term upside to the $6 area. Longer-term target remains around $100.
Good Luck, Good Trading!