Crypto Market Commentary & Outlook
(February 1 – 2021)
Bitcoin (BTC) Technical Analysis & Outlook
With GameStop, silver, and WallStreetBets dominating the news cycle this first day of February, bitcoin remains under the radar and fairly stable which is what we expected and what we think is the most healthy thing for the market at this time. The more time that consolidation takes place above $30k, the greater the odds of a resumption of the bull market in the not too distant future. While we’ll continue to buy dips under the key $30k level moving forward, we’re slowly starting to think that additional weakness under that level is increasingly unlikely from a technical perspective.
TradingView Bitstamp BTC/USD 6-hour linear chart
First we want to take a look at the 6-hour chart for a view of the short-term technicals where we can see that price has been dancing around on either side of the upper wedge trendline over the past few days on a hodgepodge of candle formations and uncertain near-term market structure, all suggesting that more consolidation in the low to mid-$30,000’s is the most likely path moving forward. The fact that the 100 SMA has reversed to the downside while the 50 SMA continues to fall is also pointing to a directionally challenged market over the shorter-term (with perhaps a slight bearish bias) and the stagnant momentum oscillators confirm this view, therefore we’ll stay neutral unless price dips back below $30k (in which case we would continue to buy the dip).
TradingView Bitstamp BTC/USD daily linear chart
We get a slightly different perspective on the falling wedge pattern when we zoom out to the daily chart above seeing as though price has yet to close below the upper trendline while the 50 SMA rises to meet price and the other moving averages remain in steady uptrends, all good news for the bulls from a longer-term point of view. The still encouraging volume indications and improving volume indications are also positive signs for the bulls overall, however we don’t think the market is ready for new all-time highs just yet so more consolidation between supply and demand areas is likely over the shorter-term.
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 daily linear chart
Given the less than stellar technicals that we talked about late last week in XMR/BTC, it comes as no surprise that price spiked below 0.0040 over the weekend on still discouraging volume indications and falling moving averages, although the move was quickly bought up thus sparking a fairly bullish candle formation off of which price has rallied a bit over the past few days so the bulls are finally starting to get active once again. The momentum oscillators are also looking pretty good right now, although we don’t expect a sustainable rally in the near future so we’ll just continue to buy below 0.0040 when given the chance.
Trade Idea: Accumulate below 0.0040 for longer-term upside to 0.0100.
TradingView Bitfinex XMR/USD daily linear chart
The consolidation in XMR/USD continues unabated on very mixed candle formations and highly uncertain market structure while the 50 SMA rolls over and the 100 SMA flattens out, all pointing to more of the same over the coming days. The still lackluster momentum and volume indications also suggest more consolidation in the low to mid-$100’s moving forward, although the rising 200 SMA is keeping us bullish longer-term so we’ll continue to buy dips below $130 if given the opportunity.
Trade Idea: Buy dips below $130 for longer-term upside to $200.
Bitcoin SV (BSV) Technical Analysis & Outlook
TradingView Huobi BSV/BTC daily linear chart
To our surprise the BSV/BTC bulls have been able to keep price fairly stable over the past few days despite the worrying technicals from late last week, a development which has taken the market all the way to the long-term downtrend line on some decent looking momentum oscillators, so the bulls need to be ready for a breakout to the upside in the not too distant future. On the other hand, the falling 50 SMA just overhead, the other bearish longer-term moving averages, and the discouraging volume indications are hinting at a false breakout and subsequent retracement back below the trendline so bulls need to be cautious despite some legitimate green shoots.
Trade Idea: Stay neutral until/unless the downtrend line is broken on volume.
TradingView Huobi BSV/USDT weekly linear chart
BSV/USDT continues to do a whole lot of nothing as price remains below $200 on a hodgepodge of candle formations, highly uncertain market structure, mixed and stagnant moving averages, and awful looking volume indications so more of the same appears likely over the near-term. The momentum oscillators also don’t look all that great yet, so we’ll stay neutral until some more interesting directional signals emerge on the charts.
Trade Idea: Stay neutral until further notice.
Aave (AAVE) Technical Analysis & Outlook
TradingView Binance AAVE/BTC 3-day linear chart
Next we’ll take our first look at AAVE/BTC since the DeFi watchlist was released late last year where we can see that price has moved up to new all-time highs recently and is now consolidating within what appears to be a young symmetrical triangle/bullish pennant above resistance turned support at the previous ATH while the moving averages pick up steam to the upside and the volume indiations continue to improve, all good news for the bull moving forward. The only concern right now are the momentum oscillators which could use a bit of a recharge which is why we think the market continues to consolidate inside of the triangle at least through the end of the workweek.
Trade Idea: Buy dips below 0.0075 for longer-term upside to 0.0120.
TradingView Binance AAVE/USDT daily linear chart
AAVE/USDT has been on an absolute tear to the upside over the past several weeks and this past week has been no exception considering that price has continued to hit new highs within a rising channel on very favorable volume indications and accelerating moving averages, all good news for the bulls longer-term. Having said that, the overbought momentum oscillators and the lack of a true pullback since January 21st have us thinking that some consolidation or even downside is necessary before price moves back to and above the $330 level.
Trade Idea: Buy dips below $250 for upside to the $400 area.
Good Luck, Good Trading!