4 August 2020
In today’s analysis, we are going to see what happened in the past few days and what could happen in the near future. Let’s start with the king of the market: Bitcoin.
Bitcoin (BTC): Is It Bullish Yet?
Let’s start by stating the obvious: Bitcoin has had a couple of influential weeks.
The most important thing we need to know: Bitcoin broke the 10K and 10.5K long-term resistances. Not only did it break them with ease, but it also managed to stay above them. It even established the 10.5K level as support. Even more importantly, it has remained on the bullish price channel.
The unexpected thing to know: The BTC price action didn’t close the CME gap of two weeks ago. This level is below 10K – to be specific, between 9.6K and 9.9K. This is not necessarily a bearish sign, it is precisely the opposite. When a CME gap is not filled, it usually powers the current trend.
If BTC closes the 10.5K support, it will most likely visit and fill the CME gap. If, however, it fills the CME gap, our analysis suggests that the next support is around the 9K level. So be wary and have your stops in place.
The surprise: in this two-week rally, the BTC RSI level was overbought. Although the RSI is usually used to look for a reversal of trend, it stayed at this level. All this while its price kept increasing. This is often a bullish sign.
What to expect: Even if volatility is back, we need to be careful. Everything is in place for BTC to have a natural retracement. The best thing that could happen for Bitcoin is to revisit the 10.5K level. This way, it can establish it as a strong support.
Ethereum: Ready for a Second Round
Like almost all of the market, Ethereum had a great week too. It all started around July 19th – it has not stopped since. ETH went from $233 to a top of $408 – a 75% increase. If you had invested in ETH, congrats! If you did not, you might want to know where ETH will go.
The most important thing we need to know: ETH has entered a rising price channel after being stalled for a long time. Not only this, but it broke the long-term S/R $350 level with ease.
The unexpected thing to know: In the 1 Week time frame chart, Bitcoin printed a double bottom on the under $100 level. The first time it touched this was in December 2018. The second time it was on the bearish March drop. Since then, it has not stopped going up.
What to expect from ETH: Let’s draw a trend line as well as our support and resistance in the 1H chart.
There are different scenarios here. The first one is that ETH goes under this trend line. If that is the case, ETH might visit the support level.
The second one is that Ethereum continues its way up to support. If ETH reaches this level and it breaks it with enough volume, we might see a new ATH for the year. If it rejects it, it might be the time to short from resistance to the previous $350 support.
Litecoin (LTC): Sleeping No More
Litecoin has been some sort of sleeping beauty. Litecoin is usually one of the first cryptos out there to start riding the trend. Yet, in the last months, LTC was stalled in a really tight channel. But things have changed.
The most important thing we need to know: Litecoin broke a year-long downtrend line. Not only this, but it also broke the $48 level resistance/support.
The unexpected thing to know: Not only did LTC break an-almost-4-month long resistance in USD – but it also had a swing reversal in the BTC pair. This is usually a really bullish sign.
What to expect from LTC: we might be looking for a healthy correction to keep the rally alive. The best thing we can do is to keep our alerts close to the $48-50 level. This way, our R:R will be better, and the risk will be less.
We are as happy as you are with volatility coming back to the market. Yet, be wary – The market is whimsical and can change its mind abruptly.