Crypto Market Commentary & Outlook
(May 24 – 2021)
Bitcoin (BTC) Technical Analysis & Outlook
It was another fairly rough weekend for the bitcoin bulls as price sank back down into the low-$30k’s on bearish technicals and elevated exchange volumes, so we really need to stay cautious despite the bounce we’ve seen today. Having said that, positive news that Ray Dalio (world’s largest hedge fund manager) is now holding bitcoin while Goldman Sachs declares crypto a new asset class is making us more bullish on the summer than we were just last week. If we can get one more higher low above $30k over the coming days then the lows will likely be in, although a break of $30k means $20k is on the table.
TradingView Bitstamp BTC/USD 6-hour linear chart
We’ll start this last full week of May with a look at the 6-hour chart for a view of the shorter-term technicals where we can see that the price action over the past three days has established a higher low above the $30,066 low from last week, and appears to be forming a potential Inverse Head & Shoulders pattern that portends higher prices if it materializes, so at least the bulls have something to work with this week as opposed to last. The fact that we have textbook bullish divergences on all volume indicators and momentum oscillators is also quite good for the bulls moving forward, however the moving averages continue to accelerate to the downside and market structure remains bearish overall, not to mention the IH&S requires a near-term dip back into the $33k region, so we’ll stay conservative for now despite some green shoots.
TradingView Bitstamp BTC/USD daily linear chart
Next we’ll look at the daily chart for a granular view of the medium-term setup where we can see that the broken uptrend line is now acting as resistance while price consolidates in the $30k’s, which is not great news for the bulls over the shorter-term, and neither is the falling 50 SMA which is just now crossing below the 100 SMA. Market structure also remains a disaster for the time being, more reasons to stay cautious over the next few days, although the bulls continue to defend the upper demand area while the momentum oscillators become fully recharged and the volume indications suggest that bulls have been just as active as bears during this bearish period, so we still think that the odds of a resumption of the bull market later this year far outweigh another 2 – 3 year downtrend like 2017 – 2020.
Trade Idea: Accumulate below $35,000 for shorter-term upside to the $44,000 area. Longer-term target resides around $100,000.
Monero (XMR) Technical Analysis & Outlook
TradingView Binance XMR/BTC daily linear chart
Conflicting signals abound on the XMR/BTC daily chart above considering that price is consolidating within what appears to be a large bearish triangle/pennant pattern on a hodgepodge of candle formations and still bearish market structure, so we think the risk remains to the downside at this time. The increase in exchange volumes while the A/D line bleeds lower is also suggesting that the bears still have the upperhand for now, as do the still recharging momentum oscillators, however price also continues to react favorably to the OTE long zone and the developing moving average confluence in the 0.0055 area so we’ll continue to nibble below 0.0060.
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 is still looking pretty heavy to start this week despite a hold of the rising 200 SMA over the weekend, and the 100 SMA is very close to joining the 50 SMA in a downtrend overhead which will keep sell pressure on the market for the foreseeable future. The fact that market structure is now firmly bearish is also bad news for the bulls over the shorter-term, however the momentum oscillators are almost recharged and the A/D line is already recovering following a shallow dip, therefore we remain positive on the longer-term outlook so we’ll continue to use weakness to add to positions.
Trade Idea: Accumulate below $250 for upside to the $500 area. Longer-term target resides in the $800 area.
Ethereum (ETH) Technical Analysis & Outlook
TradingView Binance ETH/BTC daily linear chart
Despite taking a beating over the course of the last week ETH/BTC still looks pretty good overall from a technical perspective considering that price has bounced strongly from the support confluence below 0.060 which consisted of the upper demand area, OTE long zone, and rising 50 SMA while the other moving averages remain in steady uptrends, so we think there is a good chance that sustainable lows are now in on this pair. The very encouraging volume indications and still intact longer-term market structure situation also point to this corrective period being close to over, however shorter-term market structure remains a concern and the momentum oscillators still have some recharging to do so consolidation between ~0.060 – 0.070 appears likely over the coming days.
Trade Idea: Accumulate below 0.060 for upside to the 0.080 area. Longer-term target resides in the 0.12 area.
TradingView Coinbase ETH/USD daily linear chart
ETH/USD was under pressure all weekend but continues to find support in the upper demand area and near the still rising 200 SMA while the momentum oscillators get close to recharged and the volume indications remain favorable overall, which is good news for the bulls moving forward. It’s also encouraging to see price move back above the still rising 100 SMA today while the 50 SMA remains bullish as well, however we doubt that this will be a speedy recovery given the damage to market structure and sentiment so we expect consolidation in the $2000’s for quite awhile before a run back towards the highs.
Trade Idea: Buy dips below $2000 for shorter-term upside to the $3600 area. Longer-term target now resides around $10,000.
Pirate Chain (ARRR) Technical Analysis & Outlook
Coinigy TradeOgre ARRR/BTC daily linear chart
While ARRR/BTC has not been spared from the altcoin carnage of the past several days, it hasn’t been nearly as badly hit as some coins as we can see on the daily chart above which shows that price briefly hit new regional lows below 0.00010 but price was quickly rejected back into the OTE long zone following a bounce off of the upper demand area, so we know that there are buyers below 0.00010 which is good news for the bulls moving forward. The still rising moving averages, of which the 50 SMA is acting as support, the almost recharged RSI, and the bullishly divergent MACD are also some positive signs for the bulls, as is today’s candle formation, however we cannot get longer-term bullish again until price clears the 0.00020 area so we’ll stay patient (but in buy the dip mode) until further notice.
Trade Idea: Accumulate below 0.00010 for shorter-term upside to the 0.00015 area. Medium-term target resides around 0.00030.
CoinTraderPro CoinPaprika ARRR/USD daily linear chart
ARRR/USD is finally showing some early signs of bottoming heading into this week following a washout down into the upper demand area and rising 100 SMA yesterday that was quickly rejected back to the upside thus sparking a firmly bullish candle formation today while RSI gets close to recharged and the OBV reading stays surprisingly steady. The still rising 200 SMA is also good news for the bulls longer-term, however we’ll likely need a retest of the lows to shore up a sustainable bottom and market structure has a ton of healing to do before we can talk about another bull market so we’re expecting quite a bit of volatile consolidation between ~$2 – $6 for the foreseeable future.
Trade Idea: Accumulate below $3.50 for shorter-term upside to the $6 area. Medium-term target resides around $10.
Good Luck, Good Trading!