Crypto Frontline

Weekly Crypto Analysis May 20-26, 2024

Weekly Crypto Analysis May 20-26, 2024
May 20
09:05 2024

BTCUSD (Coinbase)

Source: TradingView

Bitcoin sentiment continued to improve during the last couple of days. No news is good news for risk assets, meaning in the absence of a major risk event, prices continued to rally. Looking at the chart above, we can see how the price is currently consolidating around $67k.

There have been some rejections off that level in the recent past, so some profit-taking is normal. We think there’s scope for further upside in the near term, given major stock market indices have reached new all-time highs. That’s indicative of a favorable risk appetite.

Based on that, if BTC manages to break and hold above $67k, the next major resistance line is $73k. That’s almost 10% away from the current level, but based on the past, prices can cover a lot of ground when the order flow is imbalanced.

We shouldn’t rule out a bearish scenario. First, the price needs to break and treat as resistance the 4h chart 20 Ema. The 200 SMA will follow as support after that. Lastly, we remain bullish until the market breaks below $59k. That will be the trigger for a bearish trend reversal.

ETHUSD (Kraken)

Source: TradingView

A bullish development occurred in ETH as well, with the breakout above the falling trend line + the 4h chart 200 SMA. Although the price action is currently consolidating, we believe this is a bullish sign and there’s scope for further upside in the upcoming days.

The 20 EMA is moving up and the price treats it as support. The RSI is also not yet in an overbought condition, so there is potential for the market to move higher before a major retracement occurs. Our upside targets remain the same: $3,300 and then $3,520.

We believe the first one might lead to some consolidation, but as things stand right now, it’s not ideal to consider shorting this market and waiting for a major drop. The market is up substantially for the year, but despite that, a bullish move can overextend beyond what we traders deem as rational.

AVAXUSD (Binance)

Source: TradingView

The consolidation in AVAX continues but, as stated last time, the area around $34-$31 is very hard to break on the downside. We remain confident dips towards that zone will be bought and eventually, the bottoming will be completed.

Until then, traders should play the range and as a result, if the bullish momentum resumes, the first resistance line to watch is $39. At this point, the price is retracing lower, but it continues to trade above the 200 SMA and a little below the 20 EMA.

That suggests the bearish momentum is quite weak and there is a high probability of a resumption of buying soon enough. Our bullish stance will be negated only if AVAX breaks and holds below $29. That will show sellers are back in control and buyers are unable to stage a comeback. Until that happens, we believe traders should be positioned for an upside move, especially if the broad market sentiment will continue to improve.


No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Write a Comment