Market Commentary von Patrick Heusser, Crypto Finance AG
The market is still in a consolidation phase. And the upper and lower levels of the band are increasing in significance.
7.5k is the big resistance for all the bulls. There is still constant supply coming in as soon we start trading close to the upper band of our wide consolidation range of 4.9k - 7.5k.
There are always two ways to look at tested support/resistance levels. Some say multiple testing makes them weak, whereas others think the opposite. I believe that you have to look at additional indicators to get an idea of whether or not multiple testing weakens or strengthen the support/resistance line.
In the case of BTC$, I belive that multiple testing strengthens the line. This means that the bulls are getting tired of failing. My additional indicator is the Ichimoku cloud, which starts to feel the drag. The bullish body will probably start fading away with a few more sideways days, and then it will turn into a negative body (cloud).
The term futures market is also pointing to weakness with the curve being in backwardation up to Jun20, and flattish until Sep20. The situation is similar for the funding levels of most of the perpetual swaps out there.
If we break through the 6.6k level, I believe we have a good chance of dipping further into the high 5k area.
Here we see a more promising structure for the bulls. We made some new highs just below $190 after bouncing off of the $150 low. We also saw a healthy correction back down to the $170 area.
The setup is looking good for further strength to the upside. The Ichimoku cloud looks healthily bullish, and we formed another significant liquidity pool just around the $170 level.
In my view, this situation presents a nice risk/reward opportunity to go long at current levels with a stop just below $165, and a target of at least the recent high of $190.
The bullishness of ETH is also visible in the cross ETHBTC.
Let me point out once more that 0.025 is a very old (and in my view) important support/resistance flip line. We got screwed by the 12/13 March events and dipped below it, but we have now fully recovered. I am expecting to see prices in the 0.035 area over the next few weeks.
One last indication that the market is pretty positive on ETH comes from the ETCETH cross. You might remember that at the beginning of the year we mentioned that there was better buy interest in ETC as a hedge for the possible failure of the ETH 2.0 project.
That story has been completely forgotten, or people abandoned the trade. The price is even below the 2019 year end closing.
I believe we can narrow down the wide range to $200-$250. I am leaning towards the bearish side judging by the bearish Ichimoku cloud. The large liquidity pool around the $220 level seems to be working like a magnet at the moment and is keeping the price right in the middle of the range.
There is no clear trade setup, so play the range.