Crypto Market Commentary & Outlook
(January 25 – 2021)
Bitcoin (BTC) Technical Analysis & Outlook
The bitcoin markets continue to consolidate in the low-$30k’s as we begin this final week of January, which is actually fairly good news for the bulls given some concerning near-term signals that we discussed over the weekend. It is also good to see that OKCoin plans to roll out Lightning Network in Q1 of this year, joining other exchanges such as Kraken who are doing the same to speed up transactions, while Marathon Patent Group (a bitcoin miner) announced that they added $150 million in BTC to their corporate treasury. No doubt it’s good to see the fundamentals stay strong during this weak period in the markets, however the technicals tell us that no matter how good the news price needs more time to explore this area before the bull market can resume.
TradingView Bitstamp BTC/USD 6-hour linear chart
We’ll start off this week with a look at the trusty 6-hour chart where we can see that there are some interesting patterns developing right now such as the near-term rising wedge that points to a retracement at some point this week, and the larger falling wedge that suggests that we are simply in a consolidation before more upside in the not too distant future, a consolidation that likely has longer to go before resolving. The mixed shorter-term moving averages overhead, which stopped the recent rally on a dime today, and the rising 200 SMA below the market confirm that more consolidation below ~$35k is likely over the near-term, as do the momentum and volume indications, therefore we’ll stay neutral around current levels at least until tomorrow.
TradingView Bitstamp BTC/USD daily linear chart
We’ll also zoom out to the daily chart where we can see the falling wedge more clearly, especially the rejection off of the upper trendline today that has sparked a fairly bearish candle formation that suggests a slight downward bias over the near-term. Having said that, the still rising moving averages, the intact medium-term uptrend line, the increasingly favorable momentum and volume indications, and the aforementioned falling wedge all point to a bullish breakout above the formation at some point over the next few weeks so we’ll take any opportunity we can get to add to longs below $30k.
Trade Idea: Buy dips below $30,000 for longer-term upside to the $46,000 area.
Monero (XMR) Technical Analysis & Outlook
TradingView Binance XMR/BTC 6-hour linear chart
In the latest of a long line of disappointments on the part of the bulls, price remains within an extended descending triangle today on increasingly bearish shorter-term market structure while the 50 SMA rejoins the longer-term moving averages in a downtrend, and is still acting as overhead resistance along with the 100 SMA, all of which have sprayed weed killer on the green shoots we saw growing over the weekend. In fact, given the current state of the momentum and volume indications even if we see a breakout to the upside over the coming days we think sustainability will remain a problem going forward (meaning more consolidation below 0.0050 for the foreseeable future).
Trade Idea: Accumulate below 0.0040 for longer-term upside to 0.0100.
TradingView Bitfinex XMR/USD daily linear chart
XMR/USD is still struggling to move away from the $140 area coming into this week, which comes as no surprise given the recent mixed candle formations, the uncertain state of shorter-term market structure, and the still recharging momentum oscillators. The volume indications also don’t look great from a near-term perspective and the 50 SMA is starting to reverse overhead, therefore more consolidation below $150 appears likely over the near-term, however we still want to accumulate on weakness due to our longer-term bullish bias.
Trade Idea: Accumulate below $130 for longer-term upside to $200.
Bitcoin Cash (BCH) Technical Analysis & Outlook
TradingView Binance BCH/BTC daily linear chart
BCH/BTC hasn’t been performing all that great from a price action perspective over the past few days therefore we remain well below the long-term downtrend line while the longer-term moving averages continue to fall and the volume indications are still showing sellers being more active than buyers, so we need to stay cautious on this one moving forward. The momentum oscillators also don’t look all that great, however there could be a double bottom forming around current levels with the 50 SMA acting as support so we’ll continue to watch closely for a break of the trendline (which is what we need to see to get bullish on this one).
Trade Idea: Stay neutral until further notice.
TradingView Coinbase BCH/USD daily linear chart
Since the last time we looked at BCH/USD the triangle was broken to the downside on a large bearish candle formation that confirmed bearish near-term market structure while the momentum oscillators have continued to recharge but are not oversold yet, none of which bodes well for the bulls over the coming days. That said, price has been consolidating above the rising moving averages for several days now and the volume indications remain favorable overall so we still think that buys below $400 are a decent bet for the longer-term.
Trade Idea: Buy dips below $400 for upside to $600.
Ethereum (ETH) Technical Analysis & Outlook
TradingView Binance ETH/BTC daily linear chart
While ETH/BTC has broken out to new regional and cycle highs over the past few days, the selloff this afternoon has taken price back down to the previous supply area on a bearish candle formation while the momentum oscillators approach overbought territory and also flash bearish divergences (along with a bearish volume divergence) so we need to be cautious over the coming days. On the other hand, the A/D line is still fairly strong and all of the moving averages are picking up steam to the upside, good news for the bulls, so if the 0.040 area can be turned from resistance into support over the course of this week then we’ll get very bullish heading into February.
Trade Idea: Buy dips below 0.040 for upside to 0.050.
TradingView Coinbase ETH/USD daily linear chart
ETH/USD is also fairly concerning as we approach the daily close despite new nominal all-time highs earlier today considering that the recent selloff has pushed price back below the previous supply area on a very bearish candle formation that has confirmed the development of the rising wedge we see above, all of which should worry the bulls very much moving forward. The still stretched momentum oscillators are also not good news for the bulls over the near-term, however the A/D line tells the longer-term story which remains very bullish overall so we would welcome an opportunity to get active on the long side again at lower levels.
Trade Idea: Buy dips below $1200 for upside to $1700.
Good Luck, Good Trading!