TheCryptoVigilante Crypto Market Update – (September 8, 2020)
Digital Migration
Crypto Market Commentary & Outlook
Bitcoin (BTC) Technical Analysis & Outlook
While the BTC bulls were unable to successfully defend the old $9966 regional low from late last week over the holiday weekend like we had hoped, they were able to keep price generally around $10k despite some brief spikes below $9900. This action has actually been encouraging considering the rather bearish shorter-term technicals that we discussed last week, and the strength that we are seeing today in the face of US equity weakness is also a good sign for the bulls moving forward. That said, we don’t think that the market is ready to start another leg of the bull market to new regional highs yet so more consolidation around current levels appears likely over the course of this week.
TradingView Bitstamp BTC/USD 6-hour linear chart
We’ll return to the 6-hour chart today for a view of the shorter-term technicals where we can see that price hit a new regional low of $9850 on Saturday but since then has been treading water generally above the upper demand area on favorable momentum and volume indications which is decent news for the bulls moving forward, as is the fact that support is building in the OTE long zone and around the psychological $10k level. On the other hand, all of the moving averages have been broken to the downside, the 50 and 100 SMA’s are now falling, and market structure is still bearish, so upside is limited and downside risks to ~$9600 remain fairly high for the time being.
TradingView Bitstamp BTC/USD monthly log chart
Given the rather unexpected weakness that we’ve seen over the past week or so we thought it would be helpful to zoom out to the monthly chart to see how the early part of this cycle compares to the previous one and in 2016 when price reached resistance at the bear market bull trap highs in the $700’s there was a significant pullback (-40%) before the next leg of the rally began in earnest. So far this time around we’ve seen a -21% correction which while notable is not nearly as dramatic as the 2016 selloff, therefore we’re cautious that a final move down to the $7 – 8k region is still possible before a resumption of the uptrend (and in fact a test of the uptrend line would be a great long-term buying opportunity moving forward).
Having said all of that, the moving averages are still steadily rising, the momentum oscillators remain favorable, the volume indications are fairly supportive, and market structure continues to improve so there is a chance that price is finding a sustainable bottom here in the high-$9000’s therefore nibbling longs on dips back below $10k with stops near the regional lows is a pretty good risk/reward proposition for the time being.
Monero (XMR) Technical Analysis & Outlook
XMR/BTC
TradingView Binance XMR/BTC daily linear chart
XMR/BTC is currently trading back around the 0.0080 level following a test of the 0.0075 area late last week and over the weekend, none of which comes as a surprise given our forecast from last Friday, and we expect this type of choppy, directionless action to continue over the coming days. The still mixed moving averages, lack of market structure, and the lack of near-term supply and demand areas around the market also suggest trendless conditions are likely moving forward, however the momentum and volume indications are improving for now so we’re currently expecting a slight bullish bias this week up to the 0.0083 – 0.0085 region.
XMR/USD
TradingView Bitfinex XMR/USD daily linear chart
The XMR/USD bulls have been trying to establish near-term support around the still rising 100 SMA all weekend and so far they appear to be succeeding as price is now $5 over said moving average while the momentum oscillators get close to recharged and the volume indications remain favorable. We also like the fact that support is building in an area with very little historical significance, showing the steadfastness of the bulls right now, although if we lose the 100 SMA then the 200 SMA would be the next target which currently sits in the high-$60’s.
Bitcoin SV (BSV) Technical Analysis & Outlook
BSV/BTC
TradingView OKEx BSV/BTC daily linear chart
BSV/BTC has been rallying off of the new cycle lows from late last week over the past several days which has helped the momentum oscillators to move higher while the volume indications improve slightly, so there are a few greens shoots for the bulls today, however price has hit resistance at the falling shorter-term moving averages thus keeping market structure firmly bearish so we will continue to wait for confirmation of a trend reversal before trying to buy dips in this one.
BSV/USD
TradingView OKEx BSV/USDT daily linear chart
Following a rough end to the week last week, BSV/BTC has been slowly recovering back to the upside over the long holiday weekend on improving momentum oscillators and still strong volume indications, good signs for the bulls moving forward. Conversely, the moving averages remain mixed to slightly bearish above the market so we think upside is limited to the $190 area implying a short-term trading range between ~$150 – $190 over the coming days.
ChainLink (LINK) Technical Analysis & Outlook
LINK/BTC
TradingView Binance LINK/BTC daily linear chart
Unfortunately for the LINK/BTC bulls, the bull trap and breakdown scenario that we discussed in our previous analysis won out over the bullish pennant that we were hoping for meaning that price has been under pressure to the downside over the past week or so. We can see that the magnitude of the drop has been fairly large and that the momentum oscillators are not yet fully recharged, not great news for the bulls moving forward, however we do have favorable volume indications and a slightly divergent MACD while an Elliot Wave ABC pattern (a corrective move down within a larger uptrend) tries to complete in the adjusted upper demand area so while we would not be getting aggressively long at these levels we would be looking for signs of a sustainable bottom on a retest of sub-0.0010 levels.
LINK/USD
TradingView Binance LINK/USD daily linear chart
The good news for the LINK/USD bulls right now is that it is in a similar position to the BTC pair above in that an ABC correction on fairly encouraging momentum and volume indications while the adjusted upper demand area provides support very well could be materializing as we speak. Having said that, we have no confirmation of this yet so we’ll stay patient for a retest of sub-$10 which if successful would signal that buyers have the all clear for the next leg higher.
Good Luck, Good Trading!
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