Crypto Frontline

BTCUSD (Coinbase)

Bitcoin continued to be under pressure last week and we have been trading below $90k for 4 consecutive days. The next major area of support is located around $80k – $77k and we think that should provide more bullish flows. 

The daily chart is still showing heavy selling activity, but given this week we have a holiday in the US, volatility should start to compress, providing a tailwind for Bitcoin. We are not suggesting a major recovery will unfold, but for starters, a corrective move higher will help to lift the sentiment from oversold conditions. 

Although the RSI is trading below 30, buying is still weak. However, shorting at this point is trickier, given that sellers could be surprised by unexpected bullish spikes. We see resistance at $90k and the daily 20 EMA if a recovery starts. Our stance remains bearish as long as the price continues to trade below the falling trend line. 

We could consider this a bullish market only after Bitcoin recovers past $100k. Until then, the market is vulnerable to the downside. Relief could come as the Christmas holiday approaches. 

ETHUSD (Kraken)

Ether follows a similar path lower, unable to hold above $3,000. For that reason, the major support levels below are $2,550 and $2,200. We expect at least one of these to provide a tailwind for the market and prevent further downside damage. 

Still, even in this case, we are trading below the daily 200 SMA, the daily 20 EMA, and the bearish trend line. This confluence of factors suggests the bearish move continues to be intact and we would have to see an impulsive move to the upside to suggest sentiment is shifting. 

We see resistance around $3,000, given that’s where an August swing low is also located. The price has repeatedly rejected the 20 EMA during the last two months, so watch if that dynamic continues. Traders should assume it does as long as buying doesn’t pick up steam. 

XRPUSD (Kraken)

During the first half of the year, there was high enthusiasm for XRP as new crypto legislation in the US could act as a boost. The market is reconsidering that assumption, given the price action is hovering around levels not seen since June.

Such deterioration in sentiment is not favorable for buyers and we think there could be further downside is the structure doesn’t shift. We still see support at $1.92 and $1.62, but unfortunately for buyers, the price hasn’t been able to break and hold above the daily 20 EMA.

Additionally, the RSI keeps dropping and short-term spikes, showing sellers are more aggressive after each correction higher. We’ll keep a bearish stance as long as XRP can’t break above the trend line and above the daily 200 SMA. 

A short-term correction can’t be excluded, given most altcoins have been under pressure for weeks. However, as the risk appetite deteriorates on the back of poor liquidity dynamics globally, there should be more pressure on the crypto space in the following months.