March 28, 2024

What are the criteria and what signal is the market waiting for - Technical review | June 29, 2021

This week, Cred and DonAlt, regular Technical Roundup contributors, discuss… Bitcoin's sideways movement on the weeklysupport and ETH/USD at $1000 support.In conclusion, the authors draw attention to a test of weekly resistance in risk indices (using the example of the S&P500), which may promise a new wave of decline for cryptocurrencies if the resistance remains in force, or a vigorous rebound if the stock market recovers above these levels.

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

Bitcoin is now stuck at $20k.

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BTC/USD is still trading in the weekly support area of ​​$20 thousand. Structurally, the market still makes a mixed and, admittedly, very mediocre impression.

In particular, the crisis in the crypto lending market,resulting from the inability of several large funds to meet their margin calls is still in effect. The latest news for today is the suspension of withdrawals from CoinFLEX due to a large client who went into the red. And Voyager issued a $650 million default notice on 3AC.

Considering that most of the systemSince crypto lending operates at additional levels and add-ons, and not on-chain, it is almost impossible to find out the actual financial condition of these lenders and their counterparties. This makes it difficult to estimate the excess supply.

On a positive note, it can be noted thatthat over the past couple of weeks we have already seen quite a lot of forced urgent sales, plus there are examples of rescue of problem creditors and exchanges by well-capitalized companies: FTX &#8212;&gt; BlockFi and Alameda Research &#8212;&gt; Voyager. But the overall picture is murky at best.

On the other hand, forced sales bythe largest companies in this market create a good opportunity for interested buyers. It seems smarter to buy when firms are forced to sell assets and cut staff, rather than when the wrong firms are buying stadiums, launching celebrity ad campaigns and throwing parties in the Bahamas.

In terms of technical price levels, $20K is holding for now, but the price continues to trade below the 200-week moving average for longer than ever.

As for how these levels can be traded, two ideas seem to make sense to us.

The first one is for those who would like to first receive fromthe market is a sign of strength before betting on its reversal. Breaking the $22.1k resistance with this approach is a prerequisite for buying. This is the maximum of the range on the daily chart, which also approximately coincides with the level of the 200-week MA mentioned above. In this scenario, although you do not “catch” the bottom exactly, you buy at the first break of resistance after the market tests key support. The usual compromise: the chances are higher, the price is worse.

The second one is for those who want to get the entry price ascloser to the weekly support of $20 thousand. The shortest distance to the refutation level (read stop loss) here is to buy in consolidation at $20-21 thousand in anticipation of a potential formation of a larger low on the daily chart. It’s still the same compromise: relatively lower chances at a better price level (but it’s not at all necessary to chase the market, of course).

One way or another, in the event of a successful rebound, the price will apparently be ready to test ~$30 thousand. A breakdown of support, in turn, will put on the agenda a test of monthly support in the $14 thousand area.

To summarize, in the next 1–3 weeks there should beIt’s clear whether the $20K level will work as any significant support. This is one of the last remaining key levels, and buying here, one way or another, seems quite reasonable - either to play on a potential rebound or to start building a long-term position with a horizon of several years or more. Your choice is whether to buy at the best price and wait for signs of strength and/or wait for signs of strength first and buy with more confidence but at a worse price.

Ethereum at high timeframe support

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ETH/USD is trading at $1,000 monthly support. The pair against BTC also approached the low of the range at ₿0.055.

Like bitcoin, ETH/USD is trading below its 200-week. MA. This implied resistance to the market has yet to be overcome before any meaningful rebound can be expected.

Essentially, this gives a decision tree similar toBTC/USD. That is, either buying at ~$1000 in anticipation of a reversal while the market is trading near the very support, or when recovering above $1200, counting on continued strength. In the first case, the risks and potential returns are higher, in the second, both are lower.

Target levels on the rebound will be at leastat least the previous high at $1400, then more significant resistance at $1800-2000. If the current support ($1000) is broken down, the target range for the decline is in the $400-700 area.

The pair against BTC has strong macro support at ₿0.04, but the daily chart looks good at the current ₿0.055 given the breakout recovery.

A monthly close above $1,100 would be welcome evidence for a larger rebound.

And a small bonus section about what we pay attention to when we prepare these reviews.

Our conservative trading system is not that hard to decipher. And the most important thing here is risk and position management, as always.

In general, we recommend buying eitherdeclining to support on higher timeframes (closer to the invalidation of the thesis, and this includes the restoration of support after an unsuccessful breakout), or when key resistance is broken, which can cause further growth momentum. Both setups are based on high time frame structures and close and clear rebuttal levels.

This can be useful for traders working on improving their practices.

S&amp;P500: rebound from monthly support to weekly resistance

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In a previous review, we wrote that riskyindices of traditional markets reached support on the monthly chart. In the next couple of weeks, they rebounded, to which the crypto market has so far reacted very weakly.

The lead/lag relationship between the cryptocurrency and stock markets has been noisy lately, especially with so many crypto-specific catalysts.

In principle, the lack of reaction of the crypto market to a rebound in stocks is more of a sign of weakness.

We described these dynamics in this review andWe noticed that betting on strength in the crypto market when stocks are at resistance does not seem convincing to us. And now the S&amp;P500 is again under resistance at $3900–3940 on the weekly chart. There is still some room left on the monthly timeframe, but all the lower timeframes are right below resistance.

The Nasdaq-100 offers a similar structure, bouncing from the range's low at $11.1K to its high ($12.1K), where it now resides.

The ideal bullish scenario is if stocksfinally broke through this resistance, the crypto market joined the movement, while the main cryptocurrencies would have recovered above the 200-week. moving averages, and speculators of all stripes would enjoy a bounce against the trend.

Whether such a scenario materializes should bepretty clear next week and will be a clear signal in our system. And while equity indices are right under resistance, the outlook is far less clear.

 

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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