Crypto Market Commentary & Outlook
(May 28 – 2021)
Bitcoin (BTC) Technical Analysis & Outlook
Newsflow is slowing and volatility is compressing heading into the Memorial Day holiday in the US, which comes as no surprise given the level of uncertainty that is present in the marketplace right now. The technicals also paint a very uncertain picture over the near-term, which combined with low trading activity will likely keep the market choppy and directionless over the coming days. Having said that, we’ll still be watching the charts for clues as to what direction the market will be heading once we come out of this correction, but for now we don’t see much so we’ll stay neutral and ready to buy dips into key support areas.
TradingView Bitstamp BTC/USD 6-hour linear chart
First we’ll look at the 6-hour chart considering that many traders are now discussing the potential Inverse Head & Shoulders pattern that we talked about several days ago, however the formation is not clean enough to be convincing in our opinion so we’re not giving it much credence at this point. It now looks more like a symmetrical triangle is forming following the wedge breakdown that we warned about in the video on Wednesday which came on mediocre looking momentum oscillators and slowly deteriorating volume indications, so we want to stay quite cautious over the upcoming long weekend. The broken state of market structure, the bearish candle formations today, and the falling moving averages all support a downward bias over the near-term as well, so we’ll preserve capital for lower levels over the coming days.
TradingView Bitstamp BTC/USD 3-day linear chart
Next up we want to inspect the 3-day chart for clues about where this market might be heading next month and for now it is still extremely difficult to tell given that price remains below the yellow key resistance line as well as the 50 SMA, and the current candle formation leaves something to be desired, however the top of the OTE long zone is still providing some support. The very heavy market structure situation is also concerning for the bulls, however the longer-term moving averages remain in steady uptrends, the momentum oscillators are almost recharged, and the volume indications remain bullish overall, so we still think this corrective period is a longer-term buying opportunity even if we head lower from here over the shorter-term (which is likely).
Trade Idea: Accumulate below $34,000 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
The volatile price action below the 50 SMA today has voided the symmetrical triangle that we have been following for a few weeks, meaning price is now floating without an anchor in no man’s land while market structure remains highly uncertain and the momentum oscillators continue to stagnate, so we’ll stay firmly on the sidelines over the upcoming weekend. The lackluster volume indications and mixed longer-term moving averages also support the idea of staying neutral over the near-term, however the fact that price is somehow finding support today in this dead zone thus sparking a fairly bullish candle formation is keeping us in buy the dip mode for longer-term positions.
Trade Idea: Accumulate below 0.0060 for upside to 0.0080. Longer-term target resides in the 0.0120 area.
TradingView Bitfinex XMR/USD daily linear chart
XMR/USD is treading water within a rather unorthodox triangle pattern and above the still slowly rising 200 SMA while the momentum oscillators remain recharged and the volume indications continue to improve, all pretty good news for the bulls overall. That said, the 100 SMA is very close to joining the 50 SMA in a slight downtrend which is likely to keep pressure on the market over the shorter-term, so we think a breakdown out of the triangle and back down to or slightly below $200 to test support one more time is becoming more likely (a move that we would be buyers of without hesitation).
Trade Idea: Buy dips below $200 for upside to the $400 area. Longer-term target resides in the $800 area.
Bitcoin Cash (BCH) Technical Analysis & Outlook
TradingView Binance BCH/BTC 3-day linear chart
Despite a 50% drop in BCH/BTC over the past few weeks the longer-term outlook remains quite favorable from a technical perspective considering that medium-term market structure remains intact due to some nice candle formations coming out of the upper demand area and OTE long zone last week while the volume indications continue to improve. The rising 50 SMA should also help the bulls defend the mid-0.010’s over the coming days, however the momentum oscillators need to recharge more before we can be sure about a sustainable bottom being in so we’ll stay neutral but ready to buy dips over the coming days.
Trade Idea: Buy dips below 0.016 for longer-term upside to the 0.034 area.
TradingView Coinbase BCH/USDT daily linear chart
Like many alt/USD pairs, BCH has been hammered to the downside on heavy volume during the month of May thus breaking medium-term market structure as well as the shorter-term moving averages, so the bulls are certainly on the defensive until further notice. Having said that, the long-term demand area acted as strong support on the crash last week and the 200 SMA has been acting as support ever since, all while the momentum oscillators get close to recharged and the A/D line remains surprisingly steady, so while another move down to the $500 region is quite possible before this correction is over we think we think the longer-term outlook remains favorable from a technical point of view.
Trade Idea: Buy dips below $600 for upside to the $1000 area.
Uniswap (UNI) Technical Analysis & Outlook
TradingView Binance UNI/BTC 3-day linear chart
One of the reasons why we find it hard to believe that the longer-term crypto bull run is over is due to the relative strength of the DeFi market, which is why we want to look at UNI as it is a good representative of other majors in the space and on the BTC pair we can see that while there has been a lot of volatility recently the ascending channel, and therefore market structure, remain intact. The reversal candle coming out of the upper demand area last week is very bullish as well, as is the fact that the 50 SMA is still rising and is acting as support while the A/D line moves higher and the momentum oscillators remain favorable, however we’re not expecting a parabolic breakout to the upside moving forward but rather a slow and painful grind higher with lots of intermittent downside volatility (as has been the case for many months).
Trade Idea: Buy dips below 0.00065 for upside to the 0.00100 area.
TradingView Binance UNI/USDT 3-day linear chart
UNI/USDT has been on a rollercoaster ride over the 9 months since its inception moving from sub-$2 at the lows late last year up to a high of $45 early this month, and since then it has retraced all the way back down into the OTE long zone of the entire cycle, an area which should hold if indeed the market is in a broader secular bull market. At this point the odds look quite good that the lows are in at $13 given price is already back above the still rising 50 SMA on some bullish candle formations while the A/D line picks up steam to the upside. This suggests that bulls have been buying this dip aggressively, although the momentum oscillators still have some recharging to do and there is a ton of unexplored space between ~$20 – $40 that could use some backing and filling over the coming weeks, so patience is key despite the still bullish longer-term outlook.
Trade Idea: Accumulate below $20 for upside to the $40 area. Longer-term target resides around $100.
Good Luck, Good Trading!