Technical Analysis
Good Morning!
Currently, many tokens are trading in a wide price range, but the uptrend is still intact. Nevertheless, during the last two weeks, the entire crypto market seems to have lost momentum. However, the crypto market is not alone. Traditional stock markets are also behaving cautiously, and, according to surveys, three quarters of investors see potential price setbacks of 5% - 10%.
I see the current consolidation more as a healthy pause before a potential Christmas rally. As soon as the September expiries in futures and options are over, we could see further price rises. I also see the monetary policy side as supportive until the end of the year. The central banks are currently making little effort to tighten the money supply.
But let us now move on to our TA-Tuesday, and the tactical levels and signals.
Bitcoin BTC (4h)
The price is currently moving in a broad range between 43'000 and 53'000. Interesting trading setups could arise if the price breaks out of this range. If the price breaks through the 43'000 level, 41'000 forms the next support. In the event of an upward breakout, 60'000 will be the next important resistance.
Ethereum ETH (4h)
A similar picture can be seen in ETH. Here the price range is between 2'930 and 4'000. After a breakout, 2'350 is the important next support, and 4'370 is the next resistance to the upside.
Solana SOL (4h)
An interesting trading setup seems to be forming against USD in everybody’s darling: SOL. No, I do not see any new all-time highs in the medium to short term, but rather a potential price loss of 20% (or even 35%) should the overall market show weakness.
SOL has shot up from $22.5 to $215 within two months. Currently trading at $167, Solana is rightly seen as a potential ETH killer. Nevertheless, the speed of the price increase is not sustainable. On the one hand, there are currently technical differences that could make a price decline likely. Since mid-August, for example, the RSI has formed a striking technical divergence from the actual price trend. We are also seeing FOMO tendencies. I use Google search interest as a proxy indicator.
You can see how the search interest in Solana has risen sharply in the last two months, and is currently even higher than the search interest in ETH and ADA. Moreover, the search interest is currently at a similar level as “BITCOIN CRYPTO”. If we look at the search interest at a higher frequency (past 90 days), we see that the momentum is now turning in SOLANA. The level of the FOMO proxy against other tokens and the recent weakening of this indicator in combination with the technical divergence in the RSI leads me to formulate the following scenarios.
Overall market bullish: price target $140; Overall market neutral/negative: $110; I’m off the mark: breakout above USD 210.
Happy Trading!
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