Crypto Market Commentary & Outlook
Bitcoin (BTC) Technical Analysis & Outlook
The bitcoin markets are now in full-on consolidation mode as expected as we enter this sleepy, winter holiday weekend (US), so we’re not anticipating much in the way of fireworks over the next couple of days hence more sideways action at least until next week. The technicals are in full agreement with this assessment so we see no reason to develop a near-term bias given the current state of both the charts and the fundamentals. Having said that, this bullish pause in bitcoin has allowed many altcoins to finally move higher after months of downside therefore we’ll be more focused on those over the coming days in terms of actively trading markets.
TradingView Bitstamp BTC/USD daily linear chart
Let’s begin this last update of the week with a look at the daily chart where we can see that price is right in the middle of the symmetrical triangle that we discussed yesterday on a textbook doji candle that is keeping shorter-term market structure neutral, so we see no reason to change our forecast for more consolidation within the triangle over the coming days. The still recharging momentum oscillators also suggest more of the same moving forward, perhaps for up to 10 days as the apex of the triangle sits on January 27th, although we continue to think that the resolution out of this formation will be to the upside due to the rising moving averages and favorable moving averages so we want to be buyers of dips down in the low-$30k’s if given the chance.
TradingView Bitstamp BTC/USD weekly linear chart
We’ll also zoom out to the weekly chart for a view of the longer-term technicals where we can see that the bulls are still struggling with the 223.6% Fibonacci extension level thus sparking some fairly bearish candle formations recently while the momentum oscillators remain officially overbought and historical support is nonexistent below the market, all of which are keeping the door open to a final washout below $30k before a resumption of the bull market. That being said, the volume indications support higher prices in the not too distant future, as do the rising moving averages, so we’re still leaning towards a move higher following this consolidation.
Trade Idea: Buy dips below $34,000 for upside to the $42,000 area.
Monero (XMR) Technical Analysis & Outlook
XMR/BTC
TradingView Poloniex XMR/BTC weekly linear chart
While there’s not a ton of technical evidence of a technical reversal in XMR/BTC yet on the weekly chart above, there are some early signals that are emerging that in conjunction with the shorter-term charts paint a fairly bullish picture moving forward. The encouraging candle formation last week and the bounce out of the long-term demand area this week are good signs for the bulls as well, as are the recharged momentum oscillators, so we still want to accumulate below 0.0040. That said, we must also stay fairly conservative in our positions due to the falling moving averages and the firmly bearish state of market structure so we still don’t want to be too aggressive at this time.
Trade Idea: Accumulate below 0.0040 for longer-term upside to 0.0100.
XMR/USD
TradingView Bitfinex XMR/USD weekly linear chart
XMR/USD has had a volatile few weeks both to the upside and the downside, however none of this action has affected the bullish state of shorter-term market structure nor the still rising moving averages therefore we want to stay generally bullish moving forward. That said, the momentum and volume indications leave something to be desired right now so more consolidation in the current range (~$140 – $180) appears likely until further notice.
Trade Idea: Accumulate below $150 for longer-term upside to $200.
Ethereum (ETH) Technical Analysis & Outlook
ETH/BTC
TradingView Bittrex ETH/BTC weekly linear chart
ETH/BTC is getting some buzz today as it rallies to the upside so we’ll take a look at the weekly chart for some perspective where we can see that the move up to the 0.034 area over the past few days has confirmed another medium-term higher low thus keeping market structure intact while the current candle formation comes in fairly bullish, all good news for buyers moving forward. The rising moving averages, improving volume indications, and favorable momentum oscillators also suggest a bullish bias, both over the short and long-term, however we still think that the 0.040 area will spark some turbulence so that’s where we’ll take some profit on longs if given the chance.
Trade Idea: Buy dips below 0.030 for upside to 0.040.
ETH/USD
TradingView Coinbase ETH/USD weekly linear chart
After some serious, and seriously short-lived, downside volatility over the past few weeks, ETH/USD is right back in the all-time high supply area on a very bullish candle formation that is keeping market structure favorable for the time being, all good signs for the bulls moving forward. The volume breakout, the ramp in the A/D line, and the accelerating moving averages are also very good signs for the bulls moving forward, therefore we think there is a good shot at new all-time highs before the month is out (although more consolidation in the supply area appears likely over the very short-term).
Trade Idea: Buy dips below $1000 for upside to $1400.
ChainLink (LINK) Technical Analysis & Outlook
LINK/BTC
TradingView Binance LINK/BTC daily linear chart
Lastly, we’ll revisit LINK one more time to see how the bulls are following through on yesterday’s rally and so far there has been a move up to the 0.00062 level thus helping market structure even further while the volume indications continue to improve and the momentum oscillators remain favorable, so it appears as though the path of least resistance is still to the upside this weekend. The break and hold of the 50 SMA over the past few days is also an encouraging sign for the bulls, however supply area resistance and the falling 100 SMA are likely to put a stop to the rally around the 0.00070 level so that’s where we’ll begin to get cautious once again.
Trade Idea: Accumulate below 0.00050 for longer-term upside to 0.00120.
LINK/USD
TradingView Kraken LINK/USD daily linear chart
While it looked like it was going to be a close call on whether or not the bulls could close the daily candle above $20 yesterday, they ended up doing so with relative ease and we’ve seen some follow-through today which means that things are looking good for the bulls from a technical perspective over the shorter-term. The confirmation of bullish longer-term market structure this week, the rising moving averages, the favorable momentum and volume indications, and the lack of any historical resistance areas are all very good signs for the bulls as well, although we must be ready for volatility/corrections at each of the Fibonacci extension levels seen above even though we think a run to $30 is likely over the longer-term.
Trade Idea: Buy dips below $20 for longer-term upside to $30.
Good Luck, Good Trading!