Crypto investors took profits massively this past week, causing sharp bounces and retracements for most of the cryptocurrencies. Mid-week volatility soared as bulls and bears were fighting for trend’s direction. For instance, Bitcoin’s daily price range exceeded $1000 (12%) in one single day on Thursday. Nonetheless, overall price change was positive for most of the Altcoins, and price gains were stable. Total crypto market capitalisation kept growing, reaching a mark of 271 billion dollars, while trading volume and market shares remained almost the same as in previous weeks. Bitcoin SV appeared among the leaders in terms of price surge (+102%). EOS was overperforming the overall crypto market as well (+28.7%). Double-digit price growth was also noticed for Ripple (+11.8%) and Litecoin (+10.89%), while Bitcoin Cash (+7.75%), Ethereum (+6.05%) and Bitcoin (+6.20%) prices were appreciating moderately. Although a sharp retracement caused rumours about long-term correction, its depth was not too large as crypto investors re-entered the market once prices became attractive again. The only loser in the short-list of cryptocurrencies was Binance Coin, which lost more than 5% of its value. Tether finished the trading cycle almost flat. Upside risks persist for the week ahead, while a deeper correction is also possible. Let’s have a closer look at some charts.
Bitcoin bounced off local highs a bit earlier than we expected as crypto investors were satisfied with the growth pace and took profits slightly higher the round-figure price mark of $9000. Massive sell-off affected deep slide of the Bitcoin price, which dropped to $8000 instantly (in eight hours). However, the retracement was short-lived as many traders used the buy-dips strategy, re-opening long speculative positions. As a result, Bitcoin pared some of the previous losses on Friday, edging higher to $8500, while Saturday’s price action was more consolidative and the price range was rather tight. A four-hourly chart below illustrates current technical sentiment, which remained bullish despite the retracement. The bearish divergence caused Bitcoin’s sharp decline last Thursday, but it’s been already worked out as MACD lines crossed the 0 line and went back into the positive territory, while RSI oscillator went back above the 50% level. Double support held prices from the further slide as the green ascending trendline came together with 89-bars simple moving average. Bitcoin price has to remain above those two supports, otherwise, a reversal pattern would weigh on prices. We suggest a sideways consolidation range as the bulls must gain momentum before buying Bitcoins massively and lifting prices higher. A breakthrough trading strategy could be in play on shorter timeframes, while traders should monitor volatility and trading volume in order to jump in long positions in time. A conservative approach requires the wait-and-see position as deeper bearish action is still possible, considering the lack of bullish momentum on the daily chart.
Ethereum’s recent price action forced us updating the ascending channel we used to draw several weeks in a row. We also added the Fibonacci retracements tool, which helped us determine basic price levels for entries during the trading week. As a result, we have a list of essential pivot points and horizontal price levels, which should work as a threshold alert for our trading strategy this month in general and this upcoming week in particular. Two consecutive higher lows (May 23 and May 31) gave us a brilliant support line (green). Then we made a clone of that trendline, moved it up and received the resistance line, completing the ascending channel. After that, we made another clone (dotted one) and moved it in the middle of the channel. Now, the condition to keep printing fresh highs for Ethereum bulls is to lift prices above the middle line again. On the other side of the equation, we have two significant support levels — first, 78.6% Fibo at $250.74, and second, 61.8% Fibo at $230.16. Conservative traders could use those price marks to buy Ethereum for a long-term perspective, while aggressive speculators could hide stop-loss order beyond those horizontal static supports. Our targets remain the same, but the question is how fast we’d get there as retracement came a bit earlier than we thought. Sideways consolidation with a slightly bullish bias is also possible if Ethereum remains in the lower half of the ascending channel.
Although Litecoin overperformed other cryptocurrencies last week, we’d stay out of the Altcoin as the technical outlook is uncertain on the four-hourly chart (see the screenshot below). Ichimoku Cloud trend indicator is still bullish, but some signs point to potential consolidation if not a deeper retracement. The essential part is that the span has to keep a positive surplus, although its range narrowed significantly. Second, Litecoin price and both Ichimoku lines had entered the cloud, which is always uncertain in terms of further direction. We would not enter the market before $103.33, which is support level and the bottom of the Ichimoku Cloud currently. The only exception might be if the market suddenly accelerated and Litecoin price printed a decent breakout above $116, which is unlikely so far.
Things look worse for EOS as ADX mainline fell below the threshold, while -DI line went above +DI line, underlining the change in the technical sentiment. RSI oscillator is also bearish as its value dropped below 50%, showing a potential reversal in the trend’s direction. The only positive indicator is Parabolic SAR, the dots of which remained below the current prices, while green ascending trendline held rates from a further slide during the retracement last Thursday. We expect EOS to bounce lower before the uptrend renews the buying pressure. The price level of $7.000 looks attractive for short-term speculative longs.
Binance Coin reversed the technical outlook to bearish intraday. The 4H chart below shows that Bollinger Bands edged lower, while BNB/USD charted a bearish breakthrough signal on Friday, May 31 as the close price has breached the bottom band. Although prices went back above the middle line, the upper range of the second BB indicator (deviation 1, yellow background) should work as the resistance curve and attractive level for quick short positions, targeting the lower band slightly below $31.000. Williams %R oscillator might chart a bearish divergence, having a potential drop to the bottom of the range. That also confirms that Binance Coin looks heavy in near-term perspective.