Crypto Market Commentary & Outlook
Bitcoin (BTC) Technical Analysis & Outlook
With large institutions continuing to try to get exposure to bitcoin in any way possible, this time it’s Morgan Stanley upping its allocation to MicroStrategy, it comes as no surprise that price hit $42,000 yesterday and has since been consolidating in rather bullish fashion mainly above $40k, both of which are good signs for the bulls moving forward. The shorter-term technicals are also supportive of more upside once this stagnant period has run its course, and the longer-term charts are overbought but not more than they have been during most of this run. Overall, we still see no reason to fight the trend therefore we’re moving our targets higher given that a breakout above the new all-time high of $42k likely runs well above the previous $42.5k target.
TradingView Bitstamp BTC/USD 6-hour linear chart
We’ll start this last update of the week with a look at the 6-hour chart where we can see that price appears to be consolidating within a bullish pennant/triangle pattern while market structure remains favorable overall and the moving averages continue to pick up steam to the upside, all suggesting that the bias remains higher for the time being. The still decent looking momentum oscillators and the very favorable volume indications support the idea of higher prices over the coming days, so we’re still expecting another leg to the upside before a real correction occurs, however we must stay cognizant of the possibility of a large selloff at any time so we still don’t think it’s a good idea to lever up right now.
TradingView Bitstamp BTC/USD weekly linear chart
With price recently getting very close to our target of $42.5k from Thursday, we’ll zoom out to the weekly chart for a view of where the next Fibonacci extension levels reside and we can see that the 250% level is sitting around $44,400, a perfectly reasonable target for a reasonable market, however we think if another move higher materializes its likely to extend up to the 261.8% level just above $46k. Still bullish candle formations, favorable volume indications, rising moving averages, and generally bullish market structure also suggest that the path of least resistance is still higher for now, however momentum is overbought and price is going parabolic which are yet more reminders that a top could form at any time.
Trade Idea: Hold current positions for upside to the $46,000 area.
Monero (XMR) Technical Analysis & Outlook
XMR/BTC
TradingView Binance XMR/BTC 6-hour linear chart
With XMR/BTC finally catching a bid over the past few days we want to zoom into the 6-hour chart for a view of where the shorter-term technicals stand and we can see that price has moved up to the top of what appears to be a falling wedge pattern on some small but bullish candle formations, all quite good news for the bulls moving forward. The dwindling exchange volumes, stabilizing A/D line, and recharged and bullishly divergent momentum oscillators also suggest that we might be in the middle of a bullish reversal which is why we are starting to accumulate once again below 0.0040 while we still have the chance.
Trade Idea: Accumulate below 0.0040 for longer-term upside to 0.0100.
XMR/USD
TradingView Bitfinex XMR/USD daily linear chart
XMR/USD is looking better today considering that price has popped back above the 50 SMA and appears to be holding for the time being, thus keeping market structure favorable while the other moving averages continue to rise as well, all of which bodes well for the bulls moving forward. The increasingly favorable momentum oscillators and stable A/D line also point to a slight bullish bias over the coming days, therefore a move back up into the $170’s (at least) seems likely at some point next week.
Trade Idea: Accumulate below $140 for longer-term upside to $200.
Bitcoin SV (BSV) Technical Analysis & Outlook
BSV/BTC
TradingView Huobi BSV/BTC daily linear chart
Just a few days ago it looked like all hope was lost for the BSV/BTC bulls given the state of the longer-term technicals, however things have improved markedly since then given a 80% rally trough to peak over the past 24 hours that has taken price briefly to and above the medium-term downtrend line on a very encouraging volume spike that suggests that the bulls now have some fuel to work with over the near-term. The rising momentum oscillators and a small reversal in the A/D line also suggest that this move may have some legs moving forward, however price has yet to close above the downtrend line on a daily basis and there is a fairly discouraging candle formation developing already while the moving averages continue to fall (and the 50 SMA acts as resistance), therefore we cannot get truly bullish until we see a convincing close above the trendline.
Trade Idea: Buy dips below 0.0050 for longer-term upside to 0.010.
BSV/USD
TradingView Huobi BSV/USDT daily linear chart
BSV/USDT has unexpectedly exploded to the upside over the past few days taking out the lower supply area and confirming bullish market structure on a large spike in volume and very favorable momentum oscillators, so it looks like the bulls have taken control of the market at this time. The clean break above the moving averages, all of which are beginning to rise, is also a good sign for the bulls, so we would not be surprised to see price move up to the bottom of the main supply area around $350 over the course of next week.
Trade Idea: Buy dips below $200 for upside to $350.
Yearn Finance (YFI) Technical Analysis & Outlook
YFI/BTC
TradingView Binance YFI/BTC daily linear chart
We’ll wrap up this first full week of January with a look at YFI for an idea of what DeFi might look like as a whole coming into 2021, and we can see on the BTC pair above that things are starting to look better after weeks of consistent downside given a large double bottom in the longer-term demand area, as well as a near-term shift in market structure due to a recent higher low, all good news for the bulls moving forward. The fact that the momentum oscillators are accelerating to the upside with plenty of room to run while exchange volumes pick up also suggests increasing interest for the first time in awhile, however the A/D line remains a concern and the moving averages are falling so price really needs to get above 1.20 BTC to get us excited about a potential new bull market.
Trade Idea: Buy dips below 0.80 BTC for upside to 1.50 BTC.
YFI/USD
TradingView Binance YFI/USDT daily linear chart
YFI/USDT has been performing quite nicely over the past several days as a shift to bullish market structure at the end of 2020 sparked a rally above $30k earlier in the week which accelerated up into the all-time high supply area in the mid to high-$30k’s while both moving averages move to the upside, all good signs for the bulls moving forward. The favorable volume indications and not yet overbought momentum oscillators also suggest that the bulls have taken control, however overhead resistance is stout so we expect some turbulence/consolidation before the $44k all-time high is broken to the upside.
Trade Idea: Buy dips below $30,000 for upside to $44,000.
Good Luck, Good Trading!