December 4, 2021

Clear (Mainly) Sky for BTC and ETH - Tech Review November 3, 2021

Slow but steady breakouts in BTC and ETH, as well as the author's view of altcoins in general at this stage of the market - in the new issue of the regular review from Cred and DonAlt, authors of the Technical Roundup mailing list.

A clear (mostly) sky for bitcoin

Chart executed in TradingView

Chart executed in TradingView

The bitcoin rate against the dollar since the last release, in fact, has not budged. The market tested and closed above the important weekly support ~ $ 58k. From the TA point of view, the picture remains bullish.

With regard to potential target levels forcontinuation of growth, our assumptions on this score can hardly be anything better and more valuable than yours. It is reasonable to use round values ​​as preliminary benchmarks ($ 70K, $ 80K, etc.), or you may prefer to react to data from the futures markets as appropriate. Another option is to simply wait for the price to form some structure (even if it is intraday) and use it as a starting point for setting a trailing stop, thus bypassing the need to set target levels.

In short, the S&P 500 is steadily making new highs, so the likelihood of correlated weakness as a result of declines in traditional markets is diminished.

Although the lack of a clear impulse inspiresConcern to some participants, from a TA perspective, it is difficult to formulate a convincing bearish thesis over support and record highs. We will change our minds when and if circumstances change.

As we wrote earlier, even in the "worst"scenarios, if this breakout does not hold, from our point of view, it would be reasonable to look at buying opportunities in the area of ​​the likely formation of a larger minimum at $ 50K.

The only one for today potentially deterrenta factor worth keeping in mind again is the very aggressive positioning in altcoin futures. In this part of the market, the share of borrowed capital in open interest is still very high. While our ideal scenario is a boost in BTC / USD, triggering selloffs in altcoins, this relationship has not always worked. For example, bitcoin looked strong against the dollar on the first breakout of $ 50K in early September, but this move was blocked by the crash in the altcoin market (which pulled the rest of the market with it).

In summary, BTC / USD still looks good.The market is trading above support, there is no “technical” resistance. If it stops looking good, then the $ 50K area could potentially provide additional opportunities to bet on the continuation of the trend. The loss of this level would mean a violation of the uptrend.

Ethereum Updates Record Highs

Chart executed in TradingView

Chart executed in TradingView

Ethereum / dollar entered the race and updated record highs.

The market chatted for several days above the previous high of $ 4000, but now this area seems to have worked as support before continuing to rise.

As for the target levels, the availablethe instruments here are essentially the same as for BTC / USD. We are not yet mentally ripe for the Fibonacci expansion. It can also be helpful to pay attention to the ETH / BTC chart. Reducing the risk for Ethereum at key resistance levels in ETH / BTC can be useful in conditions when ETH has no “technically” resistance levels in the pair against the dollar.

At the time of writing, the market is already ~ 14% above the breakout level ($ 3900) on the weekly chart. The further the price moves away from this level, the less acceptable its retest becomes.

In other words, a clear setup is eitheran unsuccessful breakout that holds close to the breakout level (work out a pullback and a potential larger low, roll off the position if the thesis is rebutted), or a breakout that simply does not return to that level. A certain middle option - a strong breakout with a return to retest relatively soon - looks much less attractive in our eyes.

To summarize, Ethereum looks like today tooOK. Not a surprising conclusion given the renewed record highs. If the growth continues, the retest of $ 4000 in the short term seems to be highly undesirable.

Altcoins: high prices, vague narratives

Given the movement in major cryptocurrencies, onAt this stage of the market, we watch “viola” at best without enthusiasm. We expect volatility in BTC and ETH to create a kind of liquidity vacuum in the altcoin market, at least in the short term.

Altcoin Long = Volatility Short inBTC / USD (and ETH / USD), as we have said more than once here. Therefore, positioning in altcoins based on growth, when the market flagships update highs, from our point of view, is not the most attractive idea on the market.

This caution is compounded by the fact thatthe overall market positioning for altcoin futures still looks very aggressive, as we wrote last week. Funding rates for perpetual swaps are high and it is quite expensive to keep longs open. This may be acceptable when there is a clear thesis for an upward movement, but in this case it is not obvious to us. The higher the transaction costs, the more profitability is needed to recoup them and make a profit. Assuming the funding rate for transaction costs, today we do not have a convincing enough thesis that would justify positioning by altcoins.

There are, however, obvious exceptions to this.Two come to mind. First, if you already have carefully analyzed and well-built long-term positions in this market, it probably makes no sense to give up on them in order to chase the profitability of the flagships. Second, there are always a few exceptions that will show impressive growth even in adverse conditions. You can either reject these movements, or simply move the corresponding assets higher in the watch list to look at them first when conditions are more favorable for the altcoin market as a whole.

To summarize, today our attention isfocused on the flagships of the crypto market. It makes sense to look at altcoins now rather in order to get an idea of ​​which ones are showing strength in relation to the market as a whole. A shortlist of such assets may come in handy later.

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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