Crypto Frontline

BTCUSD (Coinbase)

The crypto bloodbath continues and Bitcoin has retested the May 12^th low, after a very negative weekend. Financial conditions are tightening once again which brings forward the deleveraging process. Simply put, market participants no longer want risky assets and instead want to sit on cash, afraid markets can continue to drop.

A short-term technical bounce in BTC should not be ruled out, and if that would be the case, we expect buyers to drive the price up towards $29k or $30k, where offers should resume again. We have 6 consecutive selling days on Bitcoin and this could be the 7^th, signaling oversold conditions.

Below the May lows, $22k is the next likely target. This is the FED week and now markets are pricing in extreme hawkishness. If the central bank will embrace a more balanced approach, a risk rally might be in the cards following the Wednesday evening press conference. Regardless, volatility is expected to remain elevated in the crypto space and Bitcoin would not be spared.

ETHUSD (Kraken)

If the Bitcoin picture is negative, when looking at altcoins, things are worse. Ether, in particular, is under heavy pressure, after breaking below the May low three days ago. The price slumped towards $1,300 where it recently found some short-term bids, but the main concern on our side is the break below $1,500 a key support area that could be favoring sellers in the following days.

Below $1,300 only $1,000 stands in front of sellers. Thar’s a psychological area and where market participants might be looking for a bounce since conditions are extremely oversold. However, such moves can overextend, so it should be no surprise if ETH pierces through $1k.

On the upside, buyers don’t have a lot of space, since the daily 20 EMA acted as resistance starting in mid-April. A changing price relationship with that moving average will be an early sign of improvement, but right now, ETH is trading well below the 20 EMA.

ADAUSD (Binance)

Cardano is down approximately 23% over the past 7 days and that takes the price close to the lower bound of a range that has been in place since May. Considering this consolidation happened after a selling move, the probabilities are in favor of a break and continuation lower.

In case that will happen, then 35 cents is the next likely target for ADA. However, we don’t advise selling at this point, since dip buyers could be entering at the lows. Wait for a break and retest of the range to have a confirmation that sellers are still in control

Once again we would like to emphasize this will be a very volatile week and anything can happen with crypto. A surge towards 64 cents, where the upper side of the channel is located, should not be excluded. Breaking above the structure, followed by little selling, would be a sign of improved risk appetite and ADA could rotate higher, erasing more of the losses. This is an emotional market and technical levels matter more than you think.