March 29, 2024

Breakout Failed, Trendline Retest In Progress – White Paper April 13, 2022

This week, Cred and DonAlt, authors of the Technical Roundup, discuss the consequences of a failed range exit attempt in BTC/USDand the situation on the Ethereum market, whose pair to USDis located at the very support level on the higher timeframe. From altcoins, the authors have prepared an update on Solana, Terra and Avalanche after a difficult week in the markets.

https://coinmarketcap.com/coins/views/all/

Bitcoin: Breakout Failed, Trendline Retest in Progress

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The resistance breakout on the higher timeframe failed due to the fact that the price closed below $44-46 thousand. The effect of buying Sailor and Kwon was leveled by sellers, which led to a rollback below the breakout level.

We have said time and again that a failed breakout would be a bearish signal. The breakthrough failed. And this is a bearish signal. Now it is necessary to indicate the condition of refutation for this thesis.

Firstly, on the weekly timeframe it is constructiveit would look like a close above the newly established resistance at $42-43 thousand. This would not be obvious evidence of a change in trend, but it would be the first significant signal that a higher low has been found.

Secondly, on the daily timeframe, the price at the momentwriting tests from below the inclined trend line. If this supposed bearish retest fails as well, it could set the stage for a short-term bounce.

Finally, looking at the bigger picture,For the strength case to be compelling, price must either invalidate the failed breakout pattern by finding support above $44-$46K resistance, or return to macro support (around $34K).

At the moment, the market looks very shaky after a failed breakout, and it definitely needs to show something more in order to regain a real chance of an immediate continuation of growth.

Ethereum tests $3000 support

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ETH/USD is trading flat at the support level.Against the backdrop of a decline in BTC/USD, most altcoins also fell and look weak in terms of technical structure. ETH/USD looks like the best of the worst in this regard, trading near the key technical and psychological level of $3,000.

The graph looks like a clear illustration to the saying"If this is not the bottom, then there is no bottom." This is a rather difficult moment when the entire crypto market looks frankly shitty, and ETH / USD against this background looks like such a brilliant poop - from the point of view of both TA and narratives.

If you are now itching and impatient to bet ona rebound and a few green candles, then ETH/USD is one of the best candidates for such a bet, being close to support, extremely close to the level of trading idea invalidation.

Finally, a chart where you can technically justify betting on a rebound and not look at yourself with disgust if something goes wrong.

If there is no reversal from $3,000, then a decline back to ~$2,000 is very likely.

Solana responds to resistance

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The SOL/USD rate reacted to the $136 level with almost a 30% decline.

The resistance was strong. The market took a hit and rolled back down.

Unlike, say, ETH/USD, on the higher timeframe, there is no obvious level to form a larger low here.

From a TA perspective, a recovery to $136 would still be the best indication of the strength of the market and the likelihood of a move to $174.

$100 is a reasonable level on lower timeframes,which, apparently, should contribute to a round number. But alas, at the time of writing, this rebound looks more or less accomplished and complete.

If the market continues to fall, then the next significant level for Solana on the weekly chart is at ~$50.

The pair against BTC does not look so weak, but the main narrative is still a bearish retest of $136 in SOL/USD.

In general, the resistance worked likeresistance, $100 is a decent level at the moment, but longer-term bets may be appropriate either on a recovery above $136 or at (significantly) lower levels.

Terra: a headache for those who like to trade breakouts

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LUNA/USD has formed a bearish resistance breakout pattern. In pair with BTC, the breakthrough is still in force. A pair against the dollar paints a bleak picture.

With all the popularity and overall dominance of Terrain the information field of the crypto market, this was not enough to successfully complete the breakthrough in LUNA/USD. And from the update of the record high that preceded this bearish pattern, it only hurts.

This reminds us of Bitcoin's move above $60K. The structures are very similar: breakout, all-time high, lethargy, dip below the breakout level, and decline.

A weekly close above $100 would be a good sign of a reversal and would suggest that LUNA may not share the fate of BTC/USD after such an unfortunate breakout.

In the absence of such a recovery, we expectlowering to the low of the range ($43). For short-term traders, it may also be worth noting the mid-range level at $62-69 (not shown on the chart).

A pair to BTC did not follow the dollar rateLUNA, which, perhaps, can be seen as a positive sign. However, a failed breakout in LUNA/USD is a strong signal, and this asset no longer looks attractive to us until the price recovers above resistance or reaches support.

Avalanche on a slippery slope

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Avalanche/dollar lost support. The pair to BTC remains within the range.

Last week we wrote about the support retest$89–92. The retest failed. Now the conservative approach is to wait for the price to recover above $89-92 as a sign of market strength and readiness for continued growth.

A quick note about this pattern in general.A failed breakout is now formed on many charts. This is a bearish signal. However, it is quite rare for price to form a double failed breakout at the same key level (assuming you identify it correctly). Usually, if the price, after recovering from a failed breakout pattern, trades above the breakout point for the second time, then we can expect a continuation of the increase.

So we don't just lazily claim thatrecovery would be nice. Recovering from a bearish failed breakout pattern is doubly good, triple good, or even more good (and usually sets the level of idea invalidation well).

In the meantime, we have added another level on the chartsupport at $79. On its own, this is not a very attractive structure, but if the market is going to offer an oversold bounce and test the mentioned breakout structures again this week, then the starting point for this bounce seems to be the $79 support.

Below these levels, we have little interest, and even then, $79 is just a channel for a larger test at $89-92 with any luck.

 

BitNews disclaim responsibility for anyinvestment recommendations that may be contained in this article. All the opinions expressed express exclusively the personal opinions of the author and the respondents. Any actions related to investments and trading on crypto markets involve the risk of losing the invested funds. Based on the data provided, you make investment decisions in a balanced, responsible manner and at your own risk.

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