Crypto Market Commentary & Outlook
(February 16 – 2021)
Bitcoin (BTC) Technical Analysis & Outlook
It’s been another good weekend overall for the bulls as price slowly chopped its way up to the $50k level despite fairly benign technicals, a sign of the ongoing and persistent supply and demand imbalance which means the general bias is still to the upside moving forward. News that Michael Saylor and Microstrategy filed for another $600 mil debt offering to buy bitcoin is also fuel for the fire over the course of this week as we think he probably knows something that we don’t following his corporate bitcoin conference from a few weeks ago. While we expect volatility to remain relatively elevated from a near-term perspective, we also expect the slow grind to continue up to the $52k target over the coming weeks.
TradingView Bitstamp BTC/USD 6-hour linear chart
We’ll begin this holiday shortened week with a look at the 6-hour chart for a closer view of the short-term technicals where we can see that price has been slowly grinding higher within what appears to be a bearish rising wedge pattern that has been falsely broken both to the upside and downside, today being the upside which has sparked a bearish candle formation that suggests more chop below $50k for a while longer before a sustainable move above $50k. The unimpressive momentum indications also point to more consolidation around current levels before $50k is tackled again, however the rising moving averages, steady volume indications, and the previous rising wedge that was broken higher are all saying that the path of least resistance remains to the upside moving forward.
TradingView Bitstamp BTC/USD 3-day linear chart
Next up is the 3-day chart for a broad view of the medium-term setup where we can see that price is still trading between the 261.8% and 278.6% Fibonacci extension levels but has spiked above this area a few times over the past week suggesting that a more convincing break higher is likely in the not too distant future, a story that is being corroborated by the still rising moving averages and strong volume indications. That said, the current candle formation is a textbook doji, price appears to be forming a megaphone type pattern, and the momentum oscillators are stretched to the upside, which tells us that we’re likely to see some more near-term consolidation in the high-$40k’s before a test of our $52k target.
Trade Idea: Buy dips below $45,000 for upside to the $52,000 area.
Monero (XMR) Technical Analysis & Outlook
TradingView Binance XMR/BTC daily linear chart
Following our update on Saturday, XMR/BTC rocketed to the upside upon a break of the 50 SMA which took price all the way up to the 0.0060 area in very short order on favorable momentum oscillators, overall good news for the bulls moving forward, as are the improving volume indications. On the other hand, the spike higher was quickly rejected back to the downside thus sparking a fairly worrisome candle formation that looks like a classic bear market rally wick all while the longer-term moving averages continue to fall and market structure remains highly uncertain so we’ll need to see a legitimate higher low above 0.0035 over the coming days before getting bullish once again.
Trade Idea: Buy dips below 0.0040 for upside to 0.0070. Longer-term targets remain around 0.010.
TradingView Bitfinex XMR/USD weekly linear chart
It didn’t take long for XMR/USD to spike up to our $250 target over the weekend on a large bullish candle formation that confirmed a shift to bullish medium-term market structure while the volume indications were and are supportive of the bulls overall, so the general bias remains to the upside for now. The still rising moving averages will also continue to help the bulls, however overbought momentum oscillators and a rejection at the 200% Fibonacci extension level tell us that a period of consolidation is likely before an attempt at higher prices above $250.
Trade Idea: Buy dips below $200 for upside to $275.
Aeon (AEON) Technical Analysis & Outlook
TradingView Bittrex AEON/BTC 3-day linear chart
AEON/BTC is looking primed for a big move higher over the coming weeks as price has formed a rounded bottom over the past few months and is now catching a bid back to the longer-term downtrend line on drastically improving volume indications and momentum oscillators that are fully recharged and picking up steam, so we expect a breakout in the not too distant future. Wyckoffian structure near the lows last month and a lack of technical or historical resistance until above 0.00001000 are also great signs for the bulls moving forward, however there is likely to be some near-term turbulence this week as price breaks the trendline so some patience is necessary before the real move materializes.
Trade Idea: Buy dips below 0.00000700 for upside to the 0.00001400 area.
TradingView Bittrex AEON/USD 3-day linear chart
AEON/USD is also poised for a move higher over the short to medium-term as price has moved up into the moving average confluence on some fairly bullish candle formations that are helping near-term market structure while the volume indications improve, all good news for the bulls moving forward. The fact that the momentum oscillators are moving higher with room to run until overbought territory is also a very good sign for the bulls over the coming days and weeks, although resistance is pretty stiff from current levels all the way up to $0.60 so we think it’s likely to be a slow grind higher, at least for the foreseeable future.
Trade Idea: Buy dips below $0.30 for upside to the $0.50 area.
Aave (AAVE) Technical Analysis & Outlook
TradingView Binance AAVE/BTC 3-day linear chart
We’ll wrap up with a look at AAVE for a sense of where the DeFi sector currently stands and we can see on the BTC pair above that price has been correcting for the past few weeks off of a spike high into the 200% Fibonacci extension level from early this month, a short-term trend that shows no signs of reversing at this time. The fact that the momentum oscillators have only just begun to recharge and the lack of support until the 0.0070’s are also signs that lower prices are likely before the bulls return to the marketplace, however the still rising moving averages and the strong support areas below the 0.0070 level are making us eager longer-term buyers of any moves below that level.
Trade Idea: Buy dips below 0.0070 for upside to 0.017.
TradingView Binance AAVE/USDT daily linear chart
AAVE/USDT has been looking heavy ever since the spike up to the $600 area last week, and today is no exception as are seeing more downside on another bearish candle formation that is following up a break of near-term market structure yesterday, all bad news for the bulls over the coming days. The still recharging momentum oscillators and the lack of historical support until the low-$300’s are also bad signs for the bulls moving forward, however the still rising moving averages and very favorable volume indications tell us that we should be longer-term buyers of any dip below $350.
Trade Idea: Buy dips below $350 for upside to the $650 area.
Good Luck, Good Trading!