- Bitcoin jumps over resistance
- Fear continues to run the global markets
- Central banks looking to cut rates even further
The Bitcoin markets have taken off to the upside, breaking above a significant amount of resistance. The previous uptrend line has now been broken above, and that is a very bullish sign.
It now appears that we should be paying more attention to the fact that the $9250 level has offered support. As a result, it’s highly probable that it’s the bottom of the overall consolidation. With that being the case, it’s very likely that we are going to continue to try to grind to the upside, given enough time.
Fear pushes traders into crypto markets
If there is one word to describe the global financial markets, it would be “fear.” At this point, the market is highly likely to continue to find plenty of reasons to be cautious about global growth, central bank easing, and rates cutting.
Ultimately, the market has seen enough for it to be running for cover. Bitcoin is an excellent place for most traders to put money in as a wealth-protecting mechanism.
The technical structure of this market suddenly looks much better than it did a few days ago. As we have pulled back towards the $9250 level, and then bounced significantly, we may very well continue to go higher. This could perhaps reach the top of the overall consolidation that we have seen for some time.
Ultimately, the market could go to the $12,000 level. That area has caused massive resistance, so we could see some trouble there again. That being said, it’s very likely that we will continue to go back and forth, so I think short-term pullbacks will be thought of as buying opportunities. Beyond that, we have jumped above the 50 day EMA, which is very bullish as well.
The trade going forward
The trade going forward is to simply buy pullbacks as we continue to see a lot of volatility around the world. I think the Bitcoin markets will continue to attract a certain amount of flow as people take their money out of riskier assets, and then also out of certain international boundaries.
For example, the Venezuelans have bought more Bitcoin in the last month than they ever have. That could continue to be the case going forward, as there are a lot of people looking to hide from the volatility of stocks, commodities, and everything else. Recently we have seen that markets continue to get away from typical assets that are highly correlated to fiat currency. Even though the US dollar has been strengthening, Bitcoin continues to attract a lot of monetary flow simply due to the fact that people are trying to run away from so many issues at the same time.
- Ethereum continues to grind sideways
- Cryptocurrency at major support level
- Quiet conditions without momentum show confusion
- “Death cross”
Ethereum has curiously acted very much like the rest of the global financial markets over the last several days. It is simply going nowhere. Although not as volatile as other assets such as the stock market, Ethereum finds itself held hostage to very unclear economic conditions. At this point, it’s only a matter of time before we get some type of impulsive candlestick that we can trade. In the short term though, we have been forming a bit of a descending triangle. This suggests that we are going lower, but there is a multitude of technical analysis confluence around this area.
The technical analysis for this market is all over the place. We are hanging about the 61.8% Fibonacci retracement level, which of course is an area that attracts a lot of attention. The so-called “golden ratio” attracts a lot of attention. Therefore, one would have to think that there are some buyers in this area. Beyond that, there is also the $175 level – which explains why we are starting to hold up as well, as Ethereum tends to move in $25 increments.
Looking at the moving averages, we have also seen the 50 day EMA cross below the 200 day EMA, forming the so-called “death cross” – something that is an omen of lower pricing for longer-term traders. That being said, quite often it is also formed at the very end of that move lower, as it is most certainly a lagging indicator.
Looking at the long term for the chart, it’s very likely that we will probably continue to see a longer-term basing pattern, but that doesn’t mean we can’t break down. It seems as if we have another push lower, but then perhaps at that point we could start to see value hunting come back into play. The $150 level would be an area that would attract a lot of attention, and most certainly the $100 level would too. That being said, Ethereum can’t avoid the volatility that we see everywhere else. After all, you are trading Ethereum against the US dollar, which has been strengthening against almost everything else.
The alternate scenario is that we break above the $200 level, but the move higher would probably be very noisy. With that in mind, the easiest way to trade Ethereum right now is to simply buy-and-hold. It is historically cheap, based on the last couple of months, so one would assume that a certain amount of value as being attached to the market. That being said, you can probably take your time to build up a larger position, as we get the sudden volatile moves in crypto every once in a while. Looking at this chart, there is very likely going to be several violent moves as the rest of the financial world seems to be essentially on fire.