Crypto Market Commentary & Outlook
Bitcoin (BTC) Technical Analysis & Outlook
While the bitcoin markets indeed continued to move to the upside over the weekend as expected, reaching a new all-time high of $34,800 on Saturday, they failed to reach the $36k target that we set in the previous update which is a bit of a disappointment overall. That said, it comes as no surprise that we’re starting off the new year with some increased volatility considering the possibility of some tax selling and rebalancing during these first few weeks of January, so we’re not that worried about the technicals from a longer-term perspective even if more downside materializes over the shorter-term.
TradingView Bitstamp BTC/USD 6-hour linear chart
We’ll return to the 6-hour chart today for another look at the shorter-term setup where we can see that price topped out at $34,800 during the middle of the holiday weekend and subsequently consolidated around the $33k level before taking a nosedive below $30k earlier today. Granted, that spike lower was very short-lived as buyers quickly moved in, however the move did break near-term market structure and the current candle formation is quite bearish so we think the odds are starting to favor a deeper pullback/longer period of consolidation than we’ve seen in at least a month. The fact that the momentum oscillators are still recharging while the A/D line stagnates is also a sign that the market needs a breather for a while, although the still rising moving averages suggest that we should be buyers of dips down into the mid-$20k’s if given the chance so that’s what we plan to do.
TradingView Bitstamp BTC/USD daily linear chart
We’ll also take a look at the daily chart for a view of the medium-term technicals where we can see that price topped out above the 178.6% Fibonacci extension level but below the 200% Fibonacci target that we identified on Saturday, signaling some indecision on the part of both the bulls and the bears in the $32,000 – $34,000 area. The overbought momentum oscillators and the lack of near-term support also probably contributed to the regional top over the weekend, and will likely keep near-term sell pressure on the market at least over the shorter-term, however the rising moving averages, intact medium-term uptrend line, and new upper demand area in the mid-$20k’s all suggest that we should be buying dips into the ~$24,000 – $28,000 region if given the opportunity moving forward.
Trade Idea: Buy dips below $28,000 for longer-term upside to $40,000.
Monero (XMR) Technical Analysis & Outlook
XMR/BTC
TradingView Bitfinex XMR/BTC daily linear chart
The bears remain in control of the XMR/BTC market today despite the turbulence in BTC/USD, not a great sign for the bulls, and neither is the recent low below 0.0040 or the fairly bearish candle formation that is developing at this time. The fact that all of the moving averages are accelerating to the downside also suggests a bearish bias moving forward, as do the awful looking volume indications, so while we still want to nibble longer-term positions below 0.0040 we also think more downside is likely over the near-term so traders should certainly stay cautious for the time being.
Trade Idea: Accumulate below 0.0040 for longer-term upside to 0.0100.
XMR/USD
TradingView Bitfinex XMR/USD daily linear chart
XMR/USD has moved down into the $130 support area as expected but price action is not all that encouraging given that there is a bullish order block in this region, not great news for the bulls moving forward, and neither is the break of the 50 SMA recently. The momentum and volume indications also leave something to be desired right now, therefore we cannot rule out a test of the rising 200 SMA in the $105 – $110 area before a reversal back into an uptrend, however this is a move which we would be buyers of given our still intact longer-term bullish bias.
Trade Idea: Accumulate below $130 for upside to $180.
Ethereum (ETH) Technical Analysis & Outlook
ETH/BTC
TradingView Binance ETH/BTC daily linear chart
We have to look at ETH again today given the insane moves over the past 48 hours, and we can see on the daily chart above that price once again wicked down below the upper demand area twice over the weekend but both times was rejected back to the upside thus sparking a huge rally off of the double bottom that took price all the way up to 0.035 in a matter of several hours. This move broke all of the moving averages and had volume behind it, so we’re certainly more bullish now than we were last week, however price was rejected back down to the bottom of the lower supply area earlier today which is not a great sign for the bulls near-term so we expect some turbulence/consolidation in the 0.030 – 0.034 area before another rally to the upside materializes.
Trade Idea: Buy dips below 0.028 for longer-term upside to 0.040.
ETH/USD
TradingView Coinbase ETH/USD daily linear chart
While ETH/USD indeed surged up to our $800 target over the weekend as expected, we didn’t anticipate the type of move that ended up materializing which pushed price to and well above the key $1000 mark, which is certainly good news for the bulls overall moving forward. The fact that price is still sitting around the $1k level is also a good sign for the bulls, as are the rising moving averages and very favorable volume indications, however the current candle formation is quite worrisome and the momentum oscillators are stretched to the upside so we think some volatile consolidation between ~$900 – $1100 is likely over the near-term.
Trade Idea: Buy dips below $800 for upside to the $1400 area.
Litecoin (LTC) Technical Analysis & Outlook
LTC/BTC
TradingView Binance LTC/BTC daily linear chart
We’ll wrap up today’s update with a look at LTC for the first time in a while given the move higher we saw yesterday, although when we view the LTC/BTC daily chart we see that this is just another volatile spike up to the main supply area that is being rejected back to the downside thus sparking a bearish candle formation, so we think it would be wise to remain cautious at this time. The mixed momentum and volume indications and a lack of clear market structure also suggests some caution despite the recent rally, although a breakout above 0.0056 would shift our bias to longer-term bullish so we’ll be watching closely for signs of such a move.
Trade Idea: Stay neutral until further notice.
LTC/USD
TradingView Coinbase LTC/USD daily linear chart
LTC/USD has been on quite a tear lately, reaching a new local and regional high of $174.50 earlier today on rising moving averages and still strong volume indications, which is definitely good news for the bulls longer-term. Favorable market structure is also a positive sign for the bulls moving forward, however price has reversed back to the downside recently due to the weakness in BTC thus sparking a bearish candle formation while the momentum oscillators leave something to be desired, therefore we would not be surprised to see a larger pullback into the low-$100’s before price resumes the medium-term uptrend.
Trade Idea: Buy dips below $120 for longer-term upside to $200.
Good Luck, Good Trading!