Crypto Frontline

BTCUSD (Coinbase)

Inability to hold above the daily 200 SMA resulted in further selling last week, but thankfully for buyers, our $100k key support area managed to hold. The price is now seen recovering, on the back of positive developments in terms of the US government shutdown.

This will push more liquidity into the system and given that Bitcoin is heavily driven by liquidity swings, we expect sentiment to improve from now on until the end of the year. The first resistance area is the 20 EMA, followed by the 200 SMA. We see sellers parked at $112k as well, but once the price trades above the 200 SMA, our sentiment will shift to bullish. 

Although we currently favor a recovery, traders need to monitor the price action movement every day. If BTC weakens again, support at $103.5k must hold to suggest conditions are still favorable for bulls. 

Ultimately, the price has to stay above $100k to imply the market is poised for more gains during the upcoming weeks. Based on how the market performed recently, we see buyers better positioned right now. 

ETHUSD (Kraken)

Last week, we expected further ETH selling towards the 200 SMA and the move materialized fast. Sellers were not able to keep pushing the price lower and right now we are seeing a bullish parabolic structure on lower time frames. 

Higher lows and higher highs suggest buyers are taking control of the order flow, which is why we expect more gains to follow this week. The first resistance area is the 20 EMA + the bearish trend line and that’s our initial target. More gains above will unlock upside potential into $4,250. 

The 200 SMA and the $3,400 level should act as strong support in the face of renewed selling. Same as with Bitcoin, we think buyers hold the upper hand, meaning buying weakness could turn out to be the best approach. The upside is favored, but we have to break above the trend line to have confirmation. 

LINKUSD (Kraken)

In case the sentiment improves, traders should take a closer look at altcoins for more upside volatility. LINK is one of the examples where shorts can be squeezed, resulting in oversized gains. 

At this stage, this does seem like a high-risk trade, but the main point of it is entering the market at cheaper valuations. More gains in ETH will likely support LINK as well, and in this scenario, we are aiming for an extension towards the primary bearish trend line. That equals a rise towards the $20 area. 

If selling resumes and LINK drops below $15.5, we would shift our attention to $13.5 as the next major support. Our bullish scenario implies limited selling activity this week, so impulsive moves lower must be treated as a sign of caution. 

The RSI is also below 50 and pointing upward, showing the market sentiment is gradually improving. We see no reason to short and wait for a massive drop at this point.