TheCryptoVigilante Crypto Market Update – (September 4, 2020)
Digital Migration
Crypto Market Commentary & Outlook
Bitcoin (BTC) Technical Analysis & Outlook
It’s been a brutal couple of days for the BTC bulls as a string of bad news events, weakness in traditional markets, and technical exhaustion at $12,000 all combined into a perfect storm that took price briefly below the $10k level more than once over the past 24 hours. While we suggested that a downdraft back below $10,000 was possible over the past few weeks, we underestimated the effect of a stock market selloff which we think is the main driver of these recent moves, so now we’re having to reexamine the market under a new lens, one that is not quite as bullish for the time being.
TradingView Bitstamp BTC/USD 4-hour linear chart
We’ll take one more look at the 4-hour chart this week to survey the damage done over the past few days and we can see that price broke easily below all demand areas except for the lower one thus sparking new supply areas overhead in their place, not great news for the bulls over the near-term, and neither is the bearish market structure situation or the falling moving averages. The fact that the bulls are already struggling at the bottom of the new lower supply area also doesn’t instill much confidence in the current bounce, however the momentum oscillators are fully recharged and the volume indications are surprisingly encouraging so a hold of the new $9966 regional low through the upcoming holiday weekend (Labor Day – US) will likely be a sign that the correction is over and a recovery can begin.
TradingView Bitstamp BTC/USD daily linear chart
We’ll also revisit the daily chart for a view of the medium-term setup where we can see that following the failure at the bottom of the supply area on Tuesday price began to sell off culminating in a new regional low of $9966 earlier today which came right around the still rising 100 SMA, as well as in the new upper demand area that is coming off of previous resistance around $10k, no doubt a key area moving forward and a good sign for the bulls in terms of stopping the selling.
If the bulls can keep price above $9000 during this correction then medium-term market structure will remain intact, as will the 200 SMA, while the momentum and volume indications become more favorable, so we’d still be looking at this being a continuation of the bullish consolidation from the last few months that eventually results in a move into the $13,000’s this fall. If not, and $9k is broken to the downside, then there could be more troubles ahead for the bulls down to the $7 – $8k range which would certainly be discouraging given the current macro environment. At this point we’re seeing some early signs that we’re getting closer to a sustainable bottom in the high-$9000’s, although caution remains warranted until the bulls reclaim $11k with conviction.
Monero (XMR) Technical Analysis & Outlook
XMR/BTC
TradingView Binance XMR/BTC weekly linear chart
While we want to get more bullish on XMR/BTC given the beautiful bottoming formation on the weekly chart above, the supply area overhead combined with the falling longer-term moving averages are keeping us neutral over the coming days. The lackluster momentum and volume indications also suggest that we’re a ways off from a breakout into a new long-term bull market, however the 50 SMA below the market and the still intact long-term uptrend line both confirm that the bias is to the upside once this broad 0.0070 – 0.0090 trading range is broken.
XMR/USD
TradingView Bitfinex XMR/USD weekly linear chart
It’s been a rough week for the XMR/USD bulls as weakness in the BTC/USD pair has pulled price down below the lower supply area for the first time in a month on a bearish candle formation that is turning market structure heavy once again, all pretty bad signs for the bulls over the near-term. The fact that the momentum oscillators are turning lower while the moving averages remain mixed below the market also point to a bearish bias over the coming days, although the A/D line has stayed fairly steady and said moving averages should provide support in the mid to high-$60’s which we think is an attractive area for longer-term buys.
Bitcoin Cash (BCH) Technical Analysis & Outlook
BCH/BTC
TradingView Binance BCH/BTC daily linear chart
The last time we looked at BCH/BTC we warned that the technicals were looking very bearish and we were expecting a breakdown to new cycle lows in the not too distant future, and indeed that is what has materialized over the course of this week as price moved down to 0.0199 on suboptimal momentum and volume indications and still falling moving averages, all pointing to a still intact bearish bias moving forward. The fact that we also don’t have a convincing reversal candle/pattern yet is also suggesting more downside, although a retest and hold of the 0.0199 level on some bullish divergences would be a good sign for the bulls heading into next week and would likely spark at least a decent sized countertrend move back up to the 0.024 area.
BCH/USD
TradingView Coinbase BCH/USD daily linear chart
BCH/USD has been getting slaughtered recently reaching a new low yesterday very close to the $200 level on still recharging momentum oscillators and deteriorating moving averages, none of which is good news for the bulls, however price did bounce right at the bottom of the upper demand area while the volume indications suggest that this dip is being bought so we’re leaning towards the market being close to a sustainable bottom here in the $200 region.
PirateChain (ARRR) Technical Analysis & Outlook
ARRR/BTC
Coinigy TradeOgre ARRR/BTC daily linear chart
ARRR/BTC has continued its steady grind to the downside over the course of this week as the previous upper demand area and 78.6% Fibonacci level failed to act as support for the bulls, and it looks like the path of least resistance remains lower for now considering the descending channel as well as the not yet recharged RSI. Recent price action also suggests that the bears are still in control overall despite some longer-term support around current levels, however the rising moving averages and the demand area below the market are telling us that a buying opportunity is approaching, likely around the 50 SMA and bottom of the upper demand area in the mid-0.00000500’s.
Good Luck, Good Trading!
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