Technical Analysis
Good Morning!
When the boogyman comes around, it is sensible to zoom out and first take a look at the big picture.
Bitcoin BTC$ (weekly)
It was a tough week for the bulls. The selling waves kept coming in and pushed the price down by 20%.
The weekly chart is still a beauty for the bulls. The Ichimoku cloud finally turned bullish, which has not happened since Dec 31, 2018.
It is clear that in order for the bulls to regain control we need to break above the 12.5k level. The bears need to see a break below 8.5k.
Bitcoin BTC$ (daily)
The break below the 10.5k level dampened my bullish outlook. It has now also become a pretty tough resistance line for the bulls to break.
The Ichimoku cloud remains bullish, but the gap is closing quickly. The uncertainty in the market is pretty high in terms of which way the next bigger move will go. It could be an indication that the next move has some proper legs driven from spot buying. I believe that with the large drop in OI on the futures side, the leverage in derivatives has become rather subdued.
I approached last week's price action with buy orders on the way down. In case we move another leg lower, I will start to go leveraged long with a stop at 8.5k for the leveraged position. First alarm bells will go off when we approach the 9k level.
In terms of the topside, I need to see the 10.5k level being taken out, but I will only add to my long position when we take out the local high of 12.5k.
Bitcoin BTC$ (4h)
I have to admit that this does not look pretty at all. On the back of what I saw on the daily chart, I can merely repeat myself. 10.5k needs to be taken out for the bulls, otherwise things are looking dire.
Ethereum ETH$ (weekly)
There was a massive rejection just below the $500 level. This was accompanied by surprisingly large liquidations and spot selling on the back of a first pop in the DeFi hype.
But the overall bullish sentiment is still alive. The market corrected from the breakout point at around $230 with no violation done to the wave structure. When we measure the correction with Fibonacci levels, we corrected just a bit lower than the 61.8% retracement level (which still counts as a healthy correction).
Everything above $290 is still bullish in my view.
Ethereum ETH$ (daily)
The $380 level proved yet again to be an important support/resistance line. When it broke for good to the downside, the speed accelerated after the retest. The base line (blue line) of the Ichimoku cloud currently seems to be playing a larger role than usual. It was support on the first wick to the downside and is now resistance on the upside. The line comes in at around $360.
Current support seems to be the upper band of the Ichimoku cloud, which, by the way, is still bullish (green). I would like to see a break to the upside through the base line, or $360, with a followthrough above $380. Only then will I add more longs.
On the way down, I see an opportunity to go leveraged long just above $290, with a tight stop below. There is a chance that we will see a swift move down to $250 if we break $290.
Ethereum ETH$ (4h)
The picture here is very similar to what we see for Bitcoin on the 4h chart. However, one thing that looks promising for the bulls is that the lows of the 4h candles over the past three days have been consecutively higher. The last low was at $342.
The topside of $360 needs to get taken out to generate some bullish momentum. On the downside, I regard the $320 level as the danger zone.
Ethereum/Bitcoin ETHBTC (weekly)
So far so good, I would say. As long we are able to hold above the 0.0310 level I feel very comfortable being long. When I measure the upmove, starting from the breakout of the second symmetrical triangle, then 0.0310 is a 61.8% Fibonacci retracement.
Ethereum/Bitcoin ETHBTC (daily)
We are still in a bullish setup. We are above the base line, above the cloud, and the cloud is green.
From a wave structure point of view, we have a little break here. When we traded below 0.0330, the structure of consecutive higher highs and higher lows broke.
I will start getting slightly concerned when we break below 0.0325. At that point, I will reconsider my longs below 0.0310.
Ethereum/Bitcoin ETHBTC (4h)
There is not much to add here. The two support levels of 0.0325 and 0.0310 look as important here as they do on the daily chart.
Technical Analysis DeFi Coins
Now, let us move on to the bloodbath section...
ATOM$ (4h) - Cosmos
Back to square one. We almost reached levels that we saw before the whole DeFi hype started.
For what it's worth, going long now with a stop below 4.50 looks like a good risk reward trade.
BAND$ (4h) - Band Protocol
It was not meant to be. $17 was the local top, and after that the elevator went down quicker than you could say "sell my bags".
I am doing the same here as for Atom, and am looking back to where the price was before the DeFi hype. In terms of the Fibonacci level, we saw a very deep correction, but seem to have found a distribution zone around 61.8%.
There is no immediate trade to take here I'm afraid.
LINK$ (4h) - Chainlink
This chart looks nearly identical to that of BAND$. For once this makes sense since they are competitors and offering the same service (oracle).
The distribution zone is around $12, which is also the 61.8% Fibonacci retracement level. There is no immediate trade to take.
LEND$ (4h) - Aave
The sell-off in the DeFi space seems to have affected most assets in roughly the same way. Here, too, we corrected around 61.8%, and also found a distribution zone just above it.
Here, as well, there is no immediate trade to take.
