Crypto Market Commentary & Outlook
(May 20 – 2021)
Bitcoin (BTC) Technical Analysis & Outlook
More FUD was on the menu for the crypto markets today as the US Treasury called for stricter regulations on the sector while President Biden continues to promise that the IRS will be cracking down, so the rather resilient price action that we’re seing today is fairly encouraging moving forward. The technicals are also looking much better than they did yesterday, which is not hard, however there is still a lot of work to be done on the part of the bulls so we’ll stay on the sidelines unless price moves back down towards the lows from yesterday (which we would buy).
TradingView Bitstamp BTC/USD 6-hour linear chart
We’ll zoom into the 6-hour chart today for the first time in a while where we can see that price wicked down into a longer-term demand area yesterday but was quickly rejected back to the upside on very heavy volume thus sparking a bullish reversal candle that has been followed up by generally positive price action, so we’re already slowly getting less bearish overall. The fact that the momentum oscillators are recharged, MACD is bullishly divergent, and the A/D line shows that the dip was bought aggressively and that buyers are still more active also points to a continuation up into the high-$40k’s to low-$50k’s before another leg down, however all of the moving averages are beginning to accelerate to the downside and market structure is still broken so the medium-term outlook must remain bearish at this time.
TradingView Bitstamp BTC/USD 3-day linear chart
We’ll also zoom out to the 3-day chart for a view of the longer-term technicals following the breakdown yesterday where we can see that price indeed bounced in a very logical place given that the upper demand area, rising 50 SMA, and OTE long zone all reside there. This bounce has sparked a very bullish hammer candle that is actually keeping longer-term market structure intact, so the bulls certainly have an opportunity to stop the downtrend over the coming days and weeks. The rising 200 SMA, almost recharged momentum oscillators, and steady A/D line are also good signs for the bulls overall, however we cannot rule out a final washout down into the $20k’s so we’ll stay conservative until we get more clarity regarding the shorter-term technicals.
Trade Idea: Accumulate below $35,000 for shorter-term upside to the $48,000 area. Longer-term target resides around $100,000.
Monero (XMR) Technical Analysis & Outlook
TradingView Binance XMR/BTC daily linear chart
We’ve seen quite a rebound in XMR/BTC today following a nasty dump into the support confluence yesterday, action that has sparked a very bullish candle formation that is back above the 50 and 200 SMAs as well, as the key support line from early this year, all while the momentum oscillators bounce off of oversold territory, all of which is positive for the bulls moving forward. The fact that the A/D line has remained fairly steady throughout the volatility of the past few days is also encouraging, however short to medium-term market structure has been destroyed so we think upside is limited to the 0.0075 area for the foreseeable future while downside risk is still below 0.0060 until further notice.
Trade Idea: Accumulate below 0.0060 for upside to 0.0100. Longer-term target remains in the 0.0200 area.
TradingView Bitfinex XMR/USD daily linear chart
XMR/USD has seen a nice rally off of the lows from yesterday that came in the upper demand area thus the current candle formation is now firmly bullish and is back above the still rising 200 SMA while the momentum oscillators bounce off of overbought territory and the volume indications remain firmly in the bull camp, so longer-term we’re still very bullish overall. Having said that, the 50 SMA is now falling and market structure is bearish so we expect the market to top out in the $280 – $320 area where consolidation is likely to take hold for a while.
Trade Idea: Accumulate below $300 for upside to the $600 area. Longer-term target resides in the $800 area.
Bitcoin Cash (BCH) Technical Analysis & Outlook
TradingView Binance BCH/BTC 3-day linear chart
BCH/BTC got smacked yesterday just like everything else however the bounce out of the support confluence consisting of the OTE long zone and upper demand area over the past 24 hours has been quite convincing so far, and longer-term market structure is actually still firmly intact, so we think the outlook remains favorable overall for the bulls. The lack of exchange volumes on the dump and the still improving A/D line are also good signs for the bulls, however the still stretched momentum oscillators are telling us that consolidation is needed below 0.025 so we’ll stay patient over the coming days.
Trade Idea: Accumulate below 0.018 for upside to the 0.035 area.
TradingView Coinbase BCH/USD daily linear chart
BCH/USD got hammered in the carnage yesterday moving all the way down to the $500 level in short order thus breaking short and medium-term market structure and piercing all of the moving averages, certainly not great for the bulls, however price has recovered nicely over the past 24 hours moving back above the 100 and 200 SMAs, so it’s not all bad despite the breakdown. In fact, the almost recharged momentum oscillators and the surprisingly steady volume indications are quite positive for the bulls moving forward, so we think it’s likely that the bottom is in but more consolidation is certainly on the table over the shorter-term.
Trade Idea: Buy dips below $600 for shorter-term upside to the $1000 area.
Decred (DCR) Technical Analysis & Outlook
TradingView Binance DCR/BTC 3-day linear chart
DCR/BTC has been a bright spot in crypto over the past 6 months and remains so this week given it’s performance relative to its medium-term bull run, and while a bit more downside into the OTE long zone and to test the key support line is likely before the bull market resumes we think the longer-term outlook remains quite favorable overall for this one. The rising moving averages, still improving volume indications, and intact medium-term market structure also suggest that this dip is likely a good buying opportunity in general, but we’ll stay patient for the 0.0030 area due to the still extended momentum oscillators.
Trade Idea: Buy dips below 0.0030 for upside to the 0.0060 area.
TradingView Binance DCR/USD 3-day linear chart
Following a breakdown out of the triangle/pennant yesterday, price has bounced back above the still rising 50 SMA today while the momentum oscillators get close to recharged and the volume indications remain encouraging overall, so we think the longer-term bull market remains intact. Having said that, short and medium-term market structure have been obliterated and there is very little in the way of technical or historical support until the $75 – $80 area so we might need one more flush down into that region on some bullish divergences in order to reverse the shorter-term downtrend.
Trade Idea: Accumulate below $100 for upside to the $300 area.
Good Luck, Good Trading!