Crypto Market Commentary & Outlook
(May 25 – 2021)
Bitcoin (BTC) Technical Analysis & Outlook
While volatility remains elevated in bitcoin overall there appears to be at least a modicum of stability starting to creep into the market, due at least in part to the tweet yesterday afternoon from Elon Musk (and Michael Saylor) regarding bitcoin mining’s energy usage that the market generally interpreted as positive. The technicals also continue to slowly heal on the short and medium-term timeframes, however uncertainty remains near an all-time high following last week’s rout so we want to remain cautious over the course of this week.
TradingView Bitstamp BTC/USD 6-hour linear chart
We’ll return to the 6-hour chart today to check in on some of the patterns that we posited yesterday and it looks like the channel has been broken to the upside and it is being successfully retested today which is a good sign for the bulls, as is the IH&S which for now has a higher right shoulder meaning a higher low and thus an improvement in market structure, all of which is good news for the bulls over the shorter-term. Having said that, medium-term warning signs abound such as the falling moving averages, stagnant momentum oscillators, waning exchange volumes, and a rejection at the yellow resistance line over the past 24 hours, so we think that the odds of another selloff before all is said and done remain heightened at this time.
TradingView Bitstamp BTC/USD 3-day linear chart
We also want to take a look at the 3-day chart to see where the medium-term technicals stand and for now there is little to no longer-term clarity considering that market structure is broken and heavy, the momentum oscillators have some room to continue lower, and the volume indications have deteriorated slightly while at the same time the longer-term moving averages are still moving higher and yesterday’s candle formation came in very bullish, therefore we want to stay neutral as long as price stays in the high-$30k’s. That said, we still like accumulating on dips below $35k given the amount of technical and historical support below that level, even if only for a shorter-term trade back above $40k.
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 Poloniex XMR/BTC weekly linear chart
Today we’ll zoom out to the XMR/BTC weekly chart for a longer-term perspective on the recent damage that has been done where we can see that price made yet another lower high early this month thus keeping long-term market structure bearish, and now price is back below all of the moving averages on a small but bearish candle formation, so the bulls need to stay cautious for now. The reversing momentum oscillators also suggest a challenging environment for the bulls for moving forward, although we also think that the 0.0050 area will act as strong support as well so we are expecting price to chop around between the yellow and green lines until further notice.
Trade Idea: Accumulate below 0.0060 for upside to 0.0080. Longer-term target has been adjusted to the 0.0120 area.
TradingView Bitfinex XMR/USD weekly linear chart
It’s been a spectacular fall for XMR/USD over the past few weeks with price moving all the way from all-time highs above $500 down into the OTE long zone that came off of the $26 low from March of 2020 on some very bearish candle formations that demolished short and medium-term market structure, so the bulls have a lot of work to do to regain control. Having said that, most of the indicators we watch are suggesting that this is a long-term buying opportunity considering that price is finding support at the still rising moving averages while the volume indications remain generally favorable, and there is substantial support below $200, so we’ll continue to buy dips below that level when given the opportunity.
Trade Idea: Buy dips below $200 for upside to the $400 area. Longer-term target resides in the $800 area.
Bitcoin SV (BSV) Technical Analysis & Outlook
TradingView Huobi BSV/BTC daily linear chart
When panic hits a certain industry or sector there tends to be a flight to safety, and in crypto that flight to safety is usually bitcoin which translates into weakness on the altcoin/BTC pairs regardless of how bullish the chart looked previous to the event, and this is exactly what happened to BSV/BTC over the past week as the very bullish looking pennant pattern was broken sharply to the downside on a large bearish candle formation that broke market structure on heavy volume. This downward action also broke all of the moving averages and has kept pressure on the momentum oscillators, however said oscillators are almost recharged, the A/D line has remained surprisingly resilient, and near-term market structure is starting to firm up a bit, so while we think shorter-term caution is certainly warranted we also think longer-term buys below 0.0040 make sense.
Trade Idea: Buy dips below 0.0040 for longer-term upside to the 0.0100 area.
TradingView OKex BSV/USDT weekly linear chart
We also have a violent pennant breakdown on the BSV/USDT pair as well on another firmly bearish candle formation that broke short and medium-term market structure, as well as the rising moving averages, while the volume indications suggested heavy selling, all bad news for the bulls over the shorter-term. The not yet fully recharged momentum oscillators will also be a challenge for the bulls from a shorter-term perspective, although they are getting very close and support is coming in via the long-term uptrend line and the upper demand area so we think that the lows are likely in around $120 despite the high probability of weeks of consolidation below $200.
Trade Idea: Buy dips below $150 for shorter-term upside to the $200 area. Medium-term target now resides around $500.
Aeon (Aeon) Technical Analysis & Outlook
TradingView Bittrex AEON/BTC 3-day linear chart
AEON/BTC has been moving to the downside along with the rest of the broader crypto market over the past week on a series of bearish candle formations that have pushed price all the way down to the flatlined longer-term moving averages while the momentum oscillators continue to recharge, so the shorter-term outlook remains bearish for the time being. The fact that the bulk of the support confluence below the market doesn’t come into play until below 0.000022 also suggests some additional downside before a sustainable low can develop, although given the steady A/D line we do think that this is an area we can buy for longer-term holding given market structure remains firmly intact.
Trade Idea: Accumulate below 0.000020 for shorter-term upside to the 0.000040 area. Longer-term target resides around 0.000080.
TradingView Bittrex AEON/USD 3-day linear chart
AEON/USD has moved all the way back below the $1 level over the past several days on almost exclusively bearish candles that broke shorter-term market structure while the momentum oscillators continue to head lower, so we expect the near-term to remain difficult for the bulls. That said, the A/D line has remained surprisingly resilient, the rising 50 SMA is acting as support while the longer-term moving averages slowly trend higher, and historical resistance from April 2020 – April 2021 is now being tested and appears to be flipping into support which is a very good sign for the bulls longer-term, hence we’ll buy dips below $0.80 moving forward.
Trade Idea: Accumulate below $0.80 for upside to the $2 area.
Good Luck, Good Trading!