Crypto Market Commentary & Outlook

(May 16 – 2021)

Bitcoin (BTC) Technical Analysis & Outlook

The fallout from the Elon Musk shenanigans last week has persisted into this weekend with bitcoin moving back down into the $40k’s with conviction thus turning the technicals much more bearish and increasing the odds of further downside before we see a sustainable bottom. The probability of lower prices has also gone up due to bearish comments from Jeffrey Gundlach, and will increase more if the weekly candle closes where it currently resides in a few hours (which is highly likely), so we’re fairly bearish heading into this week. Having said that, the charts are suggesting a massive buying opportunity in the not too distant future so we’ll be ready to deploy dry power when the time is right.

TradingView Bitstamp BTC/USD daily linear chart

First let’s take a look at the daily chart where we can see that price is currently moving down to new regional lows on a very bearish candle formation that has broken medium-term market structure while the 50 SMA picks up steam to the downside and the 100 SMA begins to roll over, all bad news for the bulls as we head into the latter half of May. The fact that the momentum oscillators still aren’t fully recharged also doesn’t bode well for the bulls over the shorter-term, although the volume indications show that the bears actually remain fairly weak overall in terms of selling and there is a huge support confluence around $40k consisting of the upper demand area, OTE long zone, rising 200 SMA, long-term uptrend line, and a previous regional high, so we think there is a good chance that price finds a sustainable low in the ~$36,500 – $42,500 area with a sweet spot around $40k.

TradingView Bitstamp BTC/USD weekly linear chart

Next we’ll look at the weekly chart where we can see that the negative price action over the past few days has turned the current candle formation very bearish only hours away from the close which likely means a confirmed break of short and medium-term market structure while the momentum oscillators continue to recharge with plenty of room to run lower, so the bears are now in control. The stagnating A/D line is not helping matters for the bulls hence lower prices are likely over the shorter-term, although the volume indications remain favorable from a longer-term perspective and the moving averages are still rising so we still think that the bull market resumes later this year.

Trade Idea: Accumulate below $42,000 for shorter-term upside to the $52,000 area. Longer-term target resides around $100,000.

Monero (XMR) Technical Analysis & Outlook

XMR/BTC

TradingView Binance XMR/BTC daily linear chart

XMR/BTC has been acting very well in the face of a bearish bitcoin market due to the still very favorable technicals which look as good as they have in over a week due to the rounded nature of the current consolidation which means that market structure remains favorable while the shorter-term moving averages continue to pick up steam to the upside. The fact that the 200 SMA is still reversing is also good news for the bulls, as is the current daily candle formation, so we think it is only a matter of time before price moves up into the OTE short zone towards our 0.010 target.

Trade Idea: Accumulate below 0.0080 for upside to 0.0100. Longer-term target remains in the 0.0200 area.

XMR/USD

TradingView Bitfinex XMR/USD daily linear chart 

Unfortunately for the XMR/USD bulls, it has been a victim of the weakness in BTC which has driven price down below $400 today on a bearish candle formation that is close to breaking shorter-term market structure while the momentum oscillators continue to recharge with some room to run lower still, so the bulls are likely to be on the defensive again this week. That said, price is in a demand area on still encouraging volume indications and rising moving averages so we think a buying opportunity is nearing (perhaps around the rising 50 SMA in the mid-$300’s).

Trade Idea: Buy dips below $360 for upside to the $600 area. Longer-term target resides in the $800 area.

Z Cash (ZEC) Technical Analysis & Outlook

ZEC/BTC

TradingView Binance ZEC/BTC 3-day linear chart

ZEC/BTC has been on quite a tear to the upside over the past two months but appears to be losing momentum right around the OTE short zone and lower supply area while MACD shows a textbook bearish divergence and the volume indications lose steam, so a test of lower prices would not surprise us before another leg up materializes. This makes sense in the context of a potential Cup & Handle continuation pattern that could very well be forming, seeing as though there is moving average and historical support around 0.0045 which is right where the handle should be developing at this time.

Trade Idea: Buy dips below 0.0050 for upside to the 0.0080 area.

ZEC/USD

TradingView Binance ZEC/USDT 3-day linear chart 

ZEC/USDT has been under pressure even since hitting the 300% Fibonacci extension level last week and that trend looks to continue into this week considering that the current 3-day candle formation is firmly bearish and is about to break short-term market structure while the volume indications deteriorate and the momentum oscillators continue to recharge. The lack of technical or historical support below the market is also bad news for the bulls shorter-term, however the longer-term outlook remains fairly sanguine given the rising moving averages and favorable longer-term market structure so eventually this will be a great buying opportunity (likely around the $200 level).

Trade Idea: Buy dips below $200 for upside to the $425 area. 

Eos (EOS) Technical Analysis & Outlook

EOS/BTC

TradingView Binance EOS/BTC monthly linear chart

Following a string of good news that sent EOS/BTC rocketing higher over the past few weeks, price has stalled out just below resistance in the form of the OTE short zone, lower supply area, and falling 200 SMA, so it comes as no surprise that the bulls are struggling here. The fact that the 100 SMA is also still falling while the momentum oscillators move close to overbought territory is also not great for the bulls over the shorter-term, hence some downside is likely from here over the coming days, however the longer-term outlook remains favorable considering bullish market structure and encouraging exchange volumes so we’ll look to buy the dip in the not too distant future.

Trade Idea: Buy dips below 0.00016 for upside to the 0.00030 area.

EOS/USD

TradingView Coinbase EOS/USD daily linear chart 

EOS/USD has been highly volatile lately mostly due to the volatility in the bitcoin market which has sparked a large and slightly bearish candle formation this weekend, which is not surprising given the rejection at the bottom of the OTE short zone late last week, and the volume indications and current price action suggest that more choppy conditions are likely over the near-term. Having said that, the rising moving averages are picking up steam to the upside, the A/D line still looks good overall, and the momentum oscillators are trending higher with some room to run so we expect more upside once this consolidation has run its course.

Trade Idea: Buy dips below $9 for upside to the $17 area.

Good Luck, Good Trading!