Crypto Market Commentary & Outlook

(January 26 – 2021)

Bitcoin (BTC) Technical Analysis & Outlook

The bitcoin markets are under a bit of pressure today on the back of a report out of JP Morgan stating the liquidity risks to BTC should Tether see a loss in confidence and/or an investigation by the government, concerns that we think are wildly overblown much like they have been since 2015. It also didn’t help that technical resistance and some bearish near-term signals materialized near the local highs yesterday, so this recent pullback into the $31k’s is not all that surprising. In fact, the technicals are still pointing to more consolidation inside of the falling wedge pattern over the coming days so we’ll stay neutral unless price dips below $30k (in which case we’ll add to longs).

TradingView Bitstamp BTC/USD 4-hour linear chart

Today we’ll zoom into the 4-hour chart for a close-up view of the short-term setup where we can see that price has moved down to the upper demand area over the past several hours on a hodgepodge of candle formations and still bearish near-term market structure while the shorter-term moving averages continue to move lower, none of which is good news for the bulls moving forward. The break of the 200 SMA earlier today, the not yet recharged momentum oscillators, and the amount of room left to the downside within the falling wedge are also concerning signals for the bulls as this week progresses. Having said that, the wedge is still telling us to buy any dip below $30k, as is the strong A/D line, so we’ll stay patient with dry powder for when/if price moves lower over the coming days.

TradingView Bitstamp BTC/USD daily linear chart

We’ll also return to the trusty daily chart once again today for a view of where things stand with regard to the falling wedge and we can see that price is right in the middle of the pattern on a fairly bearish candle formation while shorter-term market structure remains worrisome but longer-term structure is still intact, all suggesting more consolidation inside of the wedge over the course of this week. The still recharging momentum oscillators also point in this direction, however the rising moving averages and still favorable volume indications are suggesting that we should be buying dips below $30k given that this is likely a bullish consolidation before a resumption of the bull market next month.

Trade Idea: Buy dips below $30,000 for longer-term upside to the $46,000 area. 

Monero (XMR) Technical Analysis & Outlook

XMR/BTC

TradingView Binance XMR/BTC daily linear chart

Seeing as though the descending triangle that we’ve been discussing for the better part of a week is no longer valid, we’ll zoom out to the XMR/BTC daily chart where we can see that the recent consolidation above the supply area is starting to look like an accumulation that is turning into a rounded bottom on improving momentum and volume indications, so things are beginning to look a bit better for the bulls for now. The fact that there is not much resistance overhead is also a good sign for the bulls, although things have been happening very slowly in this market for months now so we think there is likely more time in the 0.0040’s before a true breakout materializes.

Trade Idea: Accumulate below 0.0040 for longer-term upside to 0.0100. 

XMR/USD

TradingView Bitfinex XMR/USD daily linear chart 

XMR/USD is back below $140 today on increasingly heavy near-term market structure while the recent candle formations leave much to be desired and the 100 SMA is being broken once again, all bad news for the bulls over the next few days. The still discouraging momentum and volume indications are also suggesting a challenging environment over the near-term, although the rising 200 SMA and intermediate-term demand area below $120 are keeping us in buy the dip mode until further notice.

Trade Idea: Accumulate below $130 for longer-term upside to $200.

Aeon (AEON) Technical Analysis & Outlook

AEON/BTC

TradingView Bittrex AEON/BTC 3-day linear chart

It’s been a while since we last looked at AEON/BTC given it has been the same old story of new lows below the long-term downtrend line for months now, although over the past few days some green shoots have emerged that could be signaling the beginning of the end of this brutal bear market. First, price made new all-time lows below 0.00000300 over the past 24 hours but the move was quickly rejected back to the upside all the way above 0.00000500 thus sparking a very bullish hammer candle that could also easily be a Wyckoff Spring. The oversold momentum oscillators and some small but relevant bullish divergences are also good signs for the bulls moving forward, however the volume indications must improve and the downtrend line must be broken for us to get truly bullish longer-term on this one.

Trade Idea: Buy dips below 0.00000400 for upside to the 0.00001000 area.

AEON/USD

TradingView Bittrex AEON/USD 3-day linear chart 

Recently AEON/USD has fallen back into the longer-term demand area on still firmly bearish market structure and reversing moving averages overhead while the volume indications continue to suggest sellers are far more active than buyers, so we see no reason to get involved in this one at current levels. The still lackluster momentum oscillators aren’t helping matters for the bulls either, so a move back below $0.10 appears likely at this time, although the current 3-day candle formation is coming in fairly bullish which is something we’ll watch moving forward.

Trade Idea: Stay neutral until further notice.

Wownero (WOW) Technical Analysis & Outlook

WOW/BTC

Coinigy TradeOgre WOW/BTC daily linear chart

Unfortunately for privacy advocates that are Wownero bulls, the BTC pair above continues to look very bad from a technical perspective considering that price is still moving steadily to the downside on bearish candle formations and firmly bearish market structure while the 200 SMA reverses to join the shorter-term moving averages in a downtrend, so lower prices appear likely before a sustainable bottom materializes. The declining OBV reading and the lack of support until the longer-term demand area also point to more downside over the near-term, however a legitimate bullish MACD divergence and a very oversold RSI are telling us that perhaps the bulls will get more active below 0.00000100 so we’ll start to watch for signs of a reversal once price moves a bit lower.

Trade Idea: Stay neutral until further notice.

WOW/USD

CoinTraderPro CoinPaprika WOW/USD daily linear chart 

WOW/USD is also looking pretty bad from a technical point of view since price is moving down to new local lows today on a firmly bearish candle formation that is keeping shorter-term market structure broken and heavy, so we think lower prices are in the cards over the coming days. The fact that price is now well below the moving averages, all of which are rolling over, is also bad news for the bulls, however the MACD and RSI readings are telling us that we should start to take a closer look when price gets into the upper demand area.

Trade Idea: Buy dips below $0.030 for longer-term upside to $0.080.

Good Luck, Good Trading!