ETH price action currently focuses on a key line in the sand for Ethereum short-term holders.
Ethereum's Ether (ETH) has “underperformed” compared to Bitcoin (BTC) this cycle, and new holders now risk falling into losses.
In the latest edition of its newsletter, “The Week On-Chain” on May 7, analytics firm Glassnode revealed the role of speculators in ETH price support.
Both Bitcoin and Ether have seen downside price action following the former’s latest block subsidy halving in April.
ETH price has underperformed Bitcoin, but Glassnode analysts say data suggests the crypto market remains in the “early stages of a macro uptrend.”
Etheruem's (ETH) price continues to underperform compared to Bitcoin’s 2024 gains, but Glassnode analysts suggest that brighter days could lie ahead.
Data from Cointelegraph Markets Pro and TradingView shows that Ethereum has been underperforming Bitcoin over the last two years, resulting in a weaker ETH/BTC ratio, which reached a low of $0.04622 on May 1, the lowest since April 2021.
Glassnode said Ethereum’s under-performance this cycle relative to Bitcoin is due to a “measurable lag in speculative interest” from the STH cohort.
Bitcoin ETF and halving buzz have boosted BTC's demand compared to Ethereum in recent weeks.
The price of Ethereum's native token, Ether (ETH), is trading around a 15-month low versus Bitcoin (BTC), and the lowest since Ethereum switched to proof-of-stake (PoS).
Will it continue to weaken for the remainder of 2023? Let's take a closer look at the charts.
The ETH/BTC pair dropped to as low as 0.056 BTC earlier this week. In doing so, the pair broke below its 200-week exponential moving average (200-week EMA; the blue wave) near 0.058 BTC, raising downside risks further into 2023.
The 200-week EMA has historically served as a reliable support level for ETH/BTC bulls. For instance, the pair rebounded 75% three months after testing the wave support in July 2022. Conversely, it dropped over 25% after losing the same support in October 2020.
ETH/BTC stares at similar selloff risks in 2023 after losing its 200-week EMA as support. In this case, the next downside target looks to be around its 0.5 Fib line near 0.051 BTC in 2023, down about 9.5% from current price levels.
Conversely, ETH price may rebound toward its 50-week EMA (the red wave) near 0.065 BTC if it reclaims the 200-week EMA as support.
Ethereum's persistent weakness versus Bitcoin is reflected in institutional capital flow data.
For instance, as of Oct. 6, Bitcoin-specific investment funds had attracted $246 million year-to-date (YTD), according to CoinShares. On the other hand, Ethereum funds have lost capital, witnessing outflows worth $104 million in the same period.
The discrepancy is likely due to growing buzz about a potential spot Bitcoin exchange-traded product (ETF) approval in the U.S.
Trade pundits argue that a spot Bitcoin ETF launch will attract $600 billion. In addition, Bitcoin's fourth halving on April 24, 2024, is also acting as a tailwind versus the altcoin market.
Related: Bitcoin price gets new $25K target as SEC decision day boosts GBTC
The halving will reduce the Bitcoin miners' block reward from 6.25 BTC to 3.125 BTC, a bullish case based on historical precedent that cuts new supply in half.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
A bearish Ethereum fractal meets lower network activity as Ether's price struggles to break above $2,000.
The price of Ethereum's native token, Ether (ETH), has gained around 35% so far in 2023. But its attempts to break above $2,000, a psychological resistance level, have witnessed strong bearish rejections multiple times.
Let's take a closer looks at the three likely reasons why Ethereum price has failed to decisively retake $2,000 since May 2022.
Ethereum's inability to cross above $2,000 in 2023 resembles the bearish rejection near $425 in 2018-2019.
In both cases, Ether appears to be in a recovery phase while eying close above its 0.236 Fib line of the Fibonacci retracement graph.
In 2018-2019, the 0.236 Fib line was near $425 and was instrumental in limiting Ether's recovery attempts. In 2023, the same line is near $2,000, enforcing itself again as a selling area and, thus, pressuring ETH's price lower.
A strengthening U.S. dollar has dampened demand for Ethereum in recent months, thus reducing its ability to close decisively above $2,000.
The prevailing negative correlation between top cryptocurrencies and the dollar has been the main culprit. In 2023, in particular, the weekly correlation coefficient between Ether and the U.S. dollar index (DXY) has been consistently negative, as shown below.
Meanwhile, Ethereum has largely underperformed Bitcoin in 2023 due to the ongoing spot Bitcoin ETF hype. For instance, the widely-tracked ETH/BTC pair is down 20% year-to-date (YTD).
Additionally, the net capital held by Ethereum-tied investment funds has dropped by $114 million so far in 2023, according to CoinShares' weekly report. In comparison, Bitcoin-based funds have attracted $168 million in the same period.
Related: Time to ‘pull the brakes’ on Ethereum and rotate back to Bitcoin: K33 report
The total-value-locked (TVL) across the Ethereum ecosystem has dropped from 18.41 million ETH to 12.79 million ETH so far in 2023. That underscores a reduced availability of funds, resulting in lower yields for investors, as JP Morgan analysts also warned recently.
The declining TVL has accompanied a drop in the Ethereum network's gas fees, which reached a yearly low on Oct. 5.
#Ethereum's network has been particularly cheap to use, and this week's average fee level of $1.13 is the lowest since November, 2022. Though not a perfect signal by any means, lower $ETH costs generally lead to a rise in utility and price rebound. https://t.co/ymXFwGJh49 pic.twitter.com/PEGpXMmZ3q
— Santiment (@santimentfeed) October 4, 2023
Ethereum's NFT volumes and unique active wallets have also dropped by 30% and 16.5% in the last 30 days, according to Dapp Radar.
That includes declines in the key metrics of popular apps, including decentralized exchange Uniswap V2, DEX aggregator 1inch Network, Ethereum staking provider Lido, and others.
Ethereum price technicals meanwhile show a potential rebound toward its 50-day exponential moving average (50-day EMA; the red wave) near $1,665.
However, looking broadly, ETH/USD has been paining a bearish continuation pattern called an ascending triangle.
As a result, a break below the triangle's lower trendline risks crashing the price by as much as the pattern's maximum height. In this case, ETH's price can drop to $1,465 and $1,560 in October 2023, depending on the breakdown point.
Short-term, a break above the 50-day EMA could have ETH's price rise toward the triangle's upper trendline near $1,730 in October 2023, coinciding with the 200-day EMA (the blue wave).
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Bitcoin price is range-bound but several major altcoins such as XRP are showing signs of a potential breakdown.
The United States' equities markets are on a recovery path. The S&P 500 Index (SPX) surged 2.50% last week to record its best week since June. Even though Bitcoin (BTC) also attempted a relief rally, the bulls could not sustain the higher levels. In the end, Bitcoin finished the week with a marginal loss of 0.5%.
One of the main reasons Bitcoin gave back its gains was because the Securities and Exchange Commission delayed its decision on all spot Bitcoin exchange-traded fund applications. However, this has not dented the expectations of analysts.
In a recent note, JPMorgan analysts said that the regulator will eventually approve several Bitcoin ETFs.
The short-term price action in Bitcoin remains in flu. But that has not deterred the long-term investors who have held onto their stockpile. Glassnode data shows that the currently mined supply dormant for three years or more has hit a new high of 40.538%.
Could Bitcoin break out of its range in the next few days? What are the important levels to watch out for? Let’s analyze the charts to find out.
The S&P 500 Index broke above the moving averages on Aug. 29, indicating that bulls have started a strong relief rally.
If buyers sustain the price above the moving averages, it will suggest that the sentiment remains positive and traders are buying on minor dips. That will enhance the prospects of a rally above the overhead resistance at 4,607. If this level is conquered, the index will try to rise to 4,650 and subsequently to 4,800.
Resuming the uptrend is likely to be a difficult task as the bears will try to yank the price below the moving averages. If they do that, the pair may slump to the strong support at 4,325. The bears will have to break this level to start a new downtrend.
The U.S. dollar index (DXY) bounced off the downtrend line on Aug. 30 and 31, indicating that the bulls have flipped the level into support.
The bulls will next try to propel the price above 104.45 and start a rally to the overhead resistance at 106. This level is likely to witness aggressive selling by the bears because a break above it will indicate that the downtrend may be over. The index could then ri to 108.
The important support to watch for on the downside is the downtrend line. If this support crumbles, the index ma descend to the 50-day SMA (102.41) and eventually to the critical support at 100.82.
Bitcoin is trading near the support of the large range between $24,800 and $31,000. When the price trades inside a range, bulls generally purchase the drop near the support and sell close to the resistance.
The $24,800 level will witness an intense battle between the bulls and the bears. If this level gives way, the selling is likely to accelerate and the BTC/USDT pair could nosedive to the crucial support at $20,000. There is a minor support at $24,000, but it may not hold for long.
Another possibility is that the price turns up from the current level. If bulls surmount the barrier at $26,833, the pair could accelerate to the 50-day SMA ($28,221). Such a move will suggest that the pair may extend its stay inside the $24,800 to $31,000 range for even longer.
Ether (ETH) dipped below the strong support at $1,626 on Sep. 1 but the long tail on the candlestick shows solid buying at lower levels.
The bulls are trying to salvage the situation but are struggling to start a rebound. This suggests a lack of demand at higher levels. Both moving averages are sloping down and the RSI is in the negative territory, indicating that the bears remain in command.
If sellers drag the price below $1,600, the ETH/USDT pair could dive to the Aug. 17 intraday low of $1,550. This is the pivot level in the near term because a fall below it may open the gates for a decline to $1,368.
The first sign of strength will be a break above the 20-day EMA ($1,684). The pair could then rise to the overhead resistance at $1,750.
BNB (BNB) has been trading below the breakdown level of $220 for the past few days but the bears have not been able to build upon their advantage.
The failure to sink the price below the psychological level of $200 could embolden the bulls who will try to start a recovery. The first hurdle on the upside is at $220 and then at the resistance line. Buyers will have to thrust the price above the resistance line to indicate that the downtrend may be ending.
Contrarily, if the price turns down and breaks below $200, it will suggest the start of the next leg of the downtrend. The BNB/USDT pair then risks sliding to the next major support at $183.
The bears yanked XRP (XRP) price below $0.50 on Sep. 1 but they could not sustain the lower levels as seen from the long tail on the day’s candlestick.
The bears kept up the pressure and have not allowed the bulls to start a strong rebound off the $0.50 level. This increases the possibility of a downside break. If that happens, the XRP/USDT pair is in danger of plunging to $0.41.
Contrary to this assumption, if the price turns up from the current level and breaks above the 20-day EMA ($0.53), it will signal that the bulls are attempting a comeback. The pair may then shoot up to $0.56. Buyers will have to overcome this barrier to indicate the start of a new up-move to $0.65.
Cardano (ADA) has been consolidating between $0.24 and $0.28 for the past few days, indicating indecision between the bulls and the bears.
The downsloping 20-day EMA ($0.26) and the RSI below 38 suggest a slight advantage to the bears. If the price turns down from the 20-day EMA, the likelihood of a drop to $0.24 increases. A break below this level may start the next leg of the downtrend to $0.22 and subsequently to $0.20.
Contrarily, if bulls push the price above the 20-day EMA, the ADA/USDT pair could challenge the resistance at the 50-day SMA ($0.28). If this level is scaled, the pair is likely to rise to $0.32.
Related: Bitcoin ETF applications: Who is filing and when the SEC may decide
Buyers tried to push Dogecoin (DOGE) above the 20-day EMA ($0.07) on Sep. 2 but the bears held their ground.
That keeps the DOGE/USDT pair stuck between the 20-day EMA and the important support at $0.06. The downsloping 20-day EMA and the RSI in the negative zone indicate advantage to sellers. If the price breaks below $0.06, the selling could intensify and the pair may plummet to the next support at $0.055.
If bulls want to prevent the decline, they will have to quickly drive the price above the 20-day EMA. If they succeed, the pair can jump to the 50-day SMA ($0.07) and later surge to $0.08.
Solana (SOL) is in a strong corrective phase. Buyers are trying to start a relief rally but it is likely to face selling at the downtrend line.
If the price turns down sharply from the current level or the downtrend line, it will suggest that the sentiment remains negative and traders are selling on rallies. That may pull the price to $18.32 and thereafter to $16.
This negative view could invalidate in the near term if bulls kick the price above the downtrend line. The SOL/USDT pair can then attempt a rally to $22.30 where the bears will likely mount a strong defense.
Toncoin’s (TON) rally has stalled near the overhead resistance at $2.07 but a minor positive is that the bulls have not ceded much ground to the bears. This suggests that the bulls are holding on to their positions.
The overbought levels on the RSI suggest a possible correction or consolidation in the near term. The important support to watch on the downside is the 20-day EMA ($1.61) because a break below it could drag the price to $1.53 and later to the 50-day SMA ($1.40).
On the upside, the bulls will have to clear the hurdle at $2.07. If they manage to do that, the TON/USDT pair could indicate the resumption of the uptrend. The pair may then attempt a rally to the $2.40-2.60 overhead zone.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Weak derivatives metrics, and declining TVL and DApps use, put Ethereum bears in a better position to keep ETH price below $2,000.
The price of Ether (ETH) faced strong resistance at $1,920 after a 17.5% rally between June 15 and June 22. Several factors contributed to the limited upside, including worsening macroeconomic conditions, the regulatory cryptocurrency environment and weaker demand for decentralized applications (DApps) on the Ethereum network.
On June 26, a federal judge denied a motion from Binance that could have stopped the United States Securities and Exchange Commission (SEC) from issuing public statements related to the case.
In addition, in its mid-year outlook, HSBC Asset Management’s report warned of an economic downturn in the U.S. in the fourth quarter, followed by a “year of contraction and a European recession in 2024”. The report also noted that “corporate defaults have started to creep up.”
Finally, International Monetary Fund chief economist Gita Gopinath told CNBC on June 27 that central bankers should “continue tightening” by keeping interest rates high for longer than expected.
Usage of DApps on the Ethereum network failed to gain momentum as gas fees dropped 60%. Notably, the seven-day average transaction cost dropped to $3.7 on June 26, down from $9 four weeks prior.
DApp active addresses also declined by 27% in the same period.
A large chunk of the decline was concentrated on Uniswap and MetaMask Swap, while most nonfungible token (NFT) marketplaces saw a surge in their unique active wallets (UAW).
Despite UNiswap NFT Aggregator's lackluster performance, the sector faced a decent influx of users on OpenSea, Blur, Manifold, LooksRare and Unick.
More concerningly, however, is that the total value locked (TVL), measuring the deposits locked in Ethereum's smart contracts, reached its lowest level since August 2020. The indicator declined by 6.9% between April 28 and June 28 to 13.9 million ETH, according to DefiLlama.
So how are professional traders positioned for the next ETH price move? Let's take a lot at Ether futures to gauge the odds of ETH/USD breaking above the $1,920 resistance.
ETH quarterly futures are the preferred instruments of whales and arbitrage desks. However, these fixed-month contracts usually trade at a slight premium to spot markets as they demand an additional fee to postpone settlement.
As a result, in healthy markets, ETH futures contracts should trade at a 5 to 10% annualized premium, a situation known as contango.
According to the futures premium, known as the basis indicator, professional traders have been avoiding leveraged longs (bullish bets). Despite the modest improvement to 3%, the metric remains far from the neutral 5% threshold.
To exclude externalities that might have solely impacted the Ether futures, one should analyze the ETH options markets. The 25% delta skew indicator compares similar call (buy) and put (sell) options and will turn positive when fear is prevalent because the protective put option premium is higher than the call options.
The skew indicator will move above 8% if traders fear an Ether price crash. On the other hand, generalized excitement reflects a negative 8% skew.
As displayed above, the delta skew has been flirting with moderate optimism since June 22 but has been unable to sustain it for long. Presently, the negative 2% metric displays a balanced demand for options.
Judging by the ETH derivatives metrics, declining TVL and Dapps use, bears are in a better position to defend the $1,920 resistance. Moreover, the worsening macroeconomic conditions and the cryptocurrency regulatory news flow confirm the moderate pessimism for risk-on assets, including Ether.
Related: 3 reasons why Ethereum’s market cap dominance is on the rise
That does not necessarily mean that Ether is bound to retest $1,750, but it certainly presents an enormous hurdle for ETH bulls after failing to break the $1,920 level on three occasions between June 21 and June 25.
Consequently, at least for the short term, Ethereum bears have better odds of successfully defending this important price level.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Given the uncertainty in the macroeconomic environment, Bitcoin price bulls have no reason to bet against a six-week descending wedge pattern.
A bearish market structure has been pressuring cryptocurrencies’ prices for the past six weeks, driving the total market capitalization to its lowest level in two months at $1.13 trillion. According to two derivative metrics, crypto bulls will have a hard time to break the downtrend, even though analyzing a shorter timeframe provides a neutral view with Bitcoin (BTC), Ether (ETH) and BNB, on average, gaining 0.3% between May 12 and May 19.
Notice that the descending wedge formation initiated in mid-April could last until July, indicating that an eventual break to the upside would require an extra effort from the bulls.
Furthermore, there’s the impending U.S. debt ceiling standoff, as the U.S. Treasury is quickly running out of cash.
Even if the majority of investors believe that the Biden administration will be able to strike a deal before the effective default of its debt, no one can exclude the possibility of a government shutdown and subsequent default.
Not even gold, which used to be considered the world’s safest asset class, has been immune to the recent correction, as the precious metal traded down from $2,050 on May 4 to the present $1,980 level.
Related: Bitcoin, gold and the debt ceiling — Does something have to give?
Circle, the company behind the USDC stablecoin, has ditched $8.7 billion in Treasuries maturing in longer than 30 days for short-term bonds and collateralized loans at banking giants such as Goldman Sachs and Royal Bank of Canada.
According to Markets Insider, a Circle representative stated that:
“The inclusion of these highly liquid assets also provides additional protection for the USDC reserve in the unlikely event of a U.S. debt default.”
The stablecoin DAI, managed by the decentralized organization MakerDAO, approved in March an increase to its portfolio holdings of the U.S. Treasuries to $1.25 billion to “take advantage of the current yield environment and generate further revenue”.
Perpetual contracts, also known as inverse swaps, have an embedded rate that is usually charged every eight hours.
A positive funding rate indicates that longs (buyers) demand more leverage. Still, the opposite situation occurs when shorts (sellers) require additional leverage, causing the funding rate to turn negative.
The seven-day funding rate for BTC and ETH was neutral, indicating balanced demand from leveraged longs (buyers) and shorts (sellers) using perpetual futures contracts. Curiously, even Litecoin (LTC) displayed no excessive long demand after a 14.5% weekly rally.
To exclude externalities that might have solely impacted futures markets, traders can gauge the market’s sentiment by measuring whether more activity is going through call (buy) options or put (sell) options.
The expiration of options can add volatility to Bitcoin’s price, which resulted in an $80-million advantage for bears in the latest May 19 expiry.
A 0.70 put-to-call ratio indicates that put option open interest lags the more bullish calls and is, therefore, bullish. In contrast, a 1.40 indicator favors put options, which can be deemed bearish.
The put-to-call ratio for Bitcoin options volume has been below 1.0 for the past couple of weeks, indicating a higher preference for neutral-to-bullish call options. More importantly, even as Bitcoin briefly corrected down to $26,800 on May 12, there was no significant surge in demand for the protective put options.
The options market shows whales and market makers unwilling to take protective puts even after Bitcoin crashed 8.3% between May 10 and May 12.
However, given the balanced demand on futures markets, traders seem hesitant to place additional bets until there’s more clarity on the U.S. debt standoff.
Less than two weeks remain until June 1, when the U.S. Treasury Department has warned that the federal government could be unable to pay its debts.
Related: U.S. debt ceiling crisis: bullish or bearish for Bitcoin?
It is unclear whether the total market capitalization will be able to break from the descending wedge formation. From an optimistic perspective, professional traders are not using derivatives to bet on a catastrophic scenario.
On the other hand, there seems to be no rationale for th bulls to jump the gun and place bets on a speedy crypto market recovery given the uncertainty in the macroeconomic environment. So, ultimately, bears are in a comfortable place according to derivatives metrics.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Bitcoin and select cryptocurrencies are trying to start a rebound following the CPI data release but bulls may find it difficult to continue the recovery at higher levels.
The United States consumer price index rose 4.9% annually, which was slightly less than estimates of a 5% increase. The CPI’s monthly rise of 0.4% in April was in line with expectations.
Although inflation remains stubbornly higher than the Federal Reserve’s 2% target range, traders will take comfort from the slower pace of increase. That suggests the Fed rate hikes are having their effect and further rate hikes may not be necessary.
If the Fed pivots and starts to cut rates as the FedWatch Tool projects, that may be positive for risky assets such as equities and cryptocurrencies. Bitcoin (BTC) has responded positively to the CPI data and has risen above $28,000 on May 10.
While the downside looks limited, the bulls may not have it easy at higher levels because of the high risk of a recession and the possibility of the banking crisis erupting again. That may keep the price stuck inside a range, which may act as a base for the next leg of the rally when that happens.
What are the important support and resistance levels to watch out for on Bitcoin and the major altcoins? Let’s study the charts of the top-10 cryptocurrencies to find out.
Bitcoin broke below the moving averages on May 7 and nosedived to the support line of the symmetrical triangle pattern on May 8. The bulls are trying to defend this level with vigor but the recovery may face difficulties at higher levels.
The bears will try to aggressively defend the zone between the moving averages and the resistance line. If the price turns down and breaks below the support line, the BTC/USDT pair could descend to the breakout level of $25,250.
This is an important level to keep an eye on because if it cracks, the selling could intensify and BTC price can plunge to the psychologically important level of $20,000.
Conversely, if bulls thrust the price above the resistance line, it will suggest that the corrective phase may be over. The pair could first rally to $30,000 and then attempt an up-move to $32,400.
Ether (ETH) has been stuck between the 20-day EMA ($1,887) and the support line for the past two days but this tight-range trading is unlikely to continue for long.
If the price clears the hurdle at the moving averages, it will indicate strong buying at lower levels. The ETH/USDT pair will then try to climb to the psychological resistance at $2,000. The bears are expected to fiercely defend this level but if bulls overcome this barrier, ETH price may soar to $2,200.
Contrarily, if the price fails to sustain above the moving averages, it will suggest that bears are pouncing on every minor rally. A break below the support line could start a down move that may reach the 61.8% Fibonacci retracement level of $1,663.
BNB (BNB) broke below the triangle on May 7, indicating that the uncertainty resolved in favor of the bears.
The selling intensified on May 8 and the BNB/USDT pair started its journey toward psychological support at $300. This level may attract buying, which could start a recovery to the 20-day EMA ($322).
If the price turns down from this level, it will enhance the prospects of a break below $300. The next support is at $280.
If bulls want to prevent the decline, they will have to push BNB price back above the 20-day EMA. If they are successful, the pair may reach the overhead resistance at $338.
XRP (XRP) crashed below the $0.43 support on May 8 but the long tail on the candlestick shows strong buying at lower levels.
The XRP/USDT pair is witnessing a tough battle near the breakdown level of $0.43. The bears are trying to flip the level into resistance while the bulls are attempting to push the price above it.
If XRP price turns down from the current level and breaks below $0.40, the bearish momentum may pick up and the pair could drop to $0.36. This negative view will be invalidated in the short term if bulls kick the price above the resistance line.
Cardano (ADA) plummeted below the $0.37 support on May 8, indicating that bears are trying to seize control.
The bulls are trying to stall the decline near the uptrend line but they are likely to face stiff resistance at the breakdown level of $0.37. If the price turns down from this level, it will suggest that the bears have flipped $0.37 into resistance.
That will enhance the prospects of a break below the uptrend line. The ADA/USDT pair may then start its decline to $0.33 and later to $0.30. The first sign of strength will be a break and close above the moving averages. That will open the doors for a rally to $0.42.
Dogecoin (DOGE) continued its downward journey and touched the solid support at $0.07 on May 8. The bulls are trying to achieve a bounce off this level.
The relief rally is likely to reach the downtrend line where the bears are expected to mount a strong defense. If the price turns down from this level, the bears will again try to sink the DOGE/USDT pair below the support at $0.07. If they succeed, the pair may plunge to $0.06, which is not major support. If this level gives way, the pair may collapse to $0.05.
Conversely, if buyers thrust the price above the downtrend line, it will signal the start of a stronger recovery. DOGE pric may then rise to the overhead resistance zone of $0.10 to $0.11.
Polygon (MATIC) nosedived below the vital support at $0.94 on May 8, indicating that the bears are in command.
The sharp fall of the past few days pulled the RSI into the oversold territory, suggesting that a recovery is possible. The sellers will try to pounce on any relief rally and keep the price below the $0.94 level. If they do that, the MATIC/USDT pair could start its journey toward the strong support at $0.69.
Contrarily, a break and close above the 20-day EMA ($0.98) will suggest that lower levels are attracting solid buying. That may trap several aggressive bears and propel MATIC price toward the resistance line.
Related: Pepe vs. Doge: How memecoins performed first time hitting $1B market cap
Solana (SOL) turned down from the downtrend line on May 6 and fell to the strong support at $19.85 on May 8.
The bulls are trying to start a recovery but the rebound lacks conviction. If Solana price turns down from the current level and plunges below $19.85, the SOL/USDT pair may fall to $18.70. This level may again act as a strong support.
If bulls want to prevent a decline, they will have to quickly drive the price above the downtrend line. If they manage to do that, SOL price could rise to $24 and subsequently to the overhead resistance at $27.12.
The bulls are trying to protect the strong support at $5.15 as seen from the long tail on Polkadot’s (DOT) May 8 candlestick.
The recovery is likely to face stiff resistance at the 20-day EMA ($5.77) as the bears have been guarding this level with vigor. If the price turns down from the current level or the 20-day EMA, the bears will make another attempt to sink the DOT/USDT pair below $5.15. If they can pull it off, Polkadot price risks a drop to $4.50.
Contrarily, if the relief rally pierces the 20-day EMA, DOT price may rise to the 50-day SMA ($6.10) and later reach the downtrend line. A break and close above this level will suggest that the bulls are on a comeback.
Litecoin (LTC) rebounded off the crucial support at $75 on May 8, indicating that the bulls are trying to arrest the decline at this level.
The downsloping 20-day EMA ($86) and the RSI in the negative territory indicate that bears are in command. Any recovery attempt is likely to face selling at the 20-day EMA. If Litecoin price turns down from this level, it will increase the likelihood of a break below $75. If that happens, the LTC/USDT pair could tumble to $65.
Contrary to this assumption, if bulls drive LTC price above the 20-day EMA, it will suggest that bearish pressure is reducing. The pair may first recover to the 50-day SMA ($90) and thereafter dash toward $96.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Bitcoin and Ethereum's ETH are finding buyers at lower levels, which may be a bullish sign for XMR, OKB and RPL.
Bitcoin’s (BTC) volatility has shrunk further this week and it is on track to form an inside-bar pattern on the weekly chart. Although the bulls are finding it difficult to clear the overhead hurdle in the $30,000 to $31,000 zone, a positive sign is that they have not ceded ground to the bears.
It is not only cryptocurrencies, even the S&P 500 Index has been oscillating inside a range for the past few days. This indicates that markets are awaiting a trigger to start the next directional move.
While the short-term price action is uncertain, analysts are getting bullish for the long term. Trader Titan of Crypto highlighted a potential signal on the Bollinger Bands monthly chart, which projects a rally to $63,500 in about a year.
While most major cryptocurrencies gave up some ground over the past week there are still some pockets of strength. Let’s analyze the charts of five cryptocurrencies that may turn up in the short term.
Bitcoin turned down sharply from the resistance line of the symmetrical triangle pattern on May 6, indicating that the bears are not willing to let the bulls through. A minor positive is that the bulls have been buying the dips to the support line of the triangle as seen from the long tail on the day’s candlestick.
The flattish 20-day exponential moving average ($28,819) and the relative strength index (RSI) near the midpoint do not signal a clear advantage either to the bulls or the bears.
If the price breaks below the triangle, it will suggest that bears are trying to seize control. The BTC/USDT pair may first fall to $26,942 and then to $25,250.
On the other hand, a break and close above the triangle will suggest that the bulls have absorbed the supply. That may start a rally to $32,400 where the bears are again expected to mount a strong defense.
Buyers nudged the price above the triangle but the long wick on the candlestick shows that the breakout turned out to be a bull trap in the near term. BTC price turned down sharply and plunged to the support line of the triangle.
The bounce off this level has reached the moving averages, which is a key short-term level to watch out for. If Bitcoin's price turns down from the current level, it will raise the chances of a break below the support line.
Contrarily, if buyers kick the price above the moving averages, the pair may rise to the resistance line. The bulls will have to drive and sustain the price above this level to start an up-move.
Ether (ETH) faced a strong rejection above the psychological resistance at $2,000 on May 7. This indicates that the bears have not given up and they continue to protect the overhead resistance levels.
The 20-day EMA ($1,903) has flattened out and the RSI is near the midpoint, indicating that the ETH/USDT pair may remain range-bound in the near term. The boundaries of the range could be between $2,000 and $1,785.
A consolidation just below the local high is a positive sign. It shows that the bulls are in no hurry to book profits, increasing the possibility of a break above $2,200.
On the contrary, if the price plunges below $1,785, it will suggest that bears have seized control. That could start a fall to $1,619.
The 4-hour chart shows that the bears could not build upon the break below the 50-simple moving average. This shows that the selling pressure reduces at lower levels. The bulls are trying to stage a recovery by sustaining the price above the 20-EMA. If they can pull it off, the pair will again try to retest the crucial resistance at $2,000.
On the contrary, if ETH price turns down from the current level and breaks below the 50-SMA, it will suggest that the bears are in command. That could sink the pair to the support line.
Monero (XMR) is trying to stay above the moving averages, indicating that the bulls are attempting a comeback.
The flattish 20-day EMA ($156) and the RSI just above the midpoint indicate a balance between supply and demand. If buyers thrust XMR price above the neckline of the inverse head and shoulders pattern, the advantage will tilt in their favor.
The XMR/USDT pair may then start a new up-move. There is a minor resistance at $181 but if that is crossed, the pair may reach $187.
Instead, if the price turns down from the current level or the neckline, it will suggest that the bears remain active at higher levels. The sellers will then try to yank the price below the $149-support, opening the door for a decline to $130.
The 4-hour chart shows that the price rebounded off the 50-SMA but the bulls could not pierce the resistance line. This shows that the bears are selling on rallies. If the price snaps back from the 20-EMA, it will suggest that the sentiment is turning positive and traders are buying on dips.
The bulls will then make another attempt to clear the overhead hurdle. If they manage to do that, the pair could first rise to $162 and then to $164.
Alternatively, if the price turns down and breaks below the 50-SMA, it will suggest that bears are in control. That will increase the likelihood of a retest of the support line.
Related: The Ethereum Foundation just sold $30M in Ether — But will ETH price fall this time?
OKB (OKB) is trading inside a large symmetrical triangle pattern. Generally, in this setup, traders buy near the support line and sell near the resistance.
The bears are trying to maintain OKB price below the 50-day SMA ($45.57) while the bulls are attempting to reclaim the level. If the price turns up from the current level or rebounds off the support line, it will suggest demand at lower levels.
If buyers shove the price above the 20-day EMA ($46.87), it will suggest that the OKB/USDT pair may prolong its stay inside the triangle for some more time.
Contrary to this assumption, if bears sink the price below the triangle, it will suggest that the setup has behaved as a reversal pattern. That could start a new downtrend which is likely to pull the pair to $37.
The 4-hour chart shows that the bulls are trying to defend the horizontal support near $44.35 but they have not been able to propel the price above the moving averages. This suggests that every minor relief rally is being sold into. If the price turns down from the current level and plummets below $44.35, the pair may slump to $41.70.
Conversely, if the price rises above the moving averages, it will signal accumulation at lower levels. The pair could first rise to $49.50 and thereafter attempt a rally to $53.
Rocket Pool (RPL) is looking strong as it is trading above the moving averages. This shows that the bulls are buying on dips.
The bulls will have to propel the price above the overhead resistance at $53.45 to signal that the corrective phase may be over. The RPL/USDT pair may thereafter attempt a rally to $58.
Another possibility is that RPL price rises from the 20-day EMA ($48.36) but turns down from $53.45. That will indicate a possible range-bound action between the 50-day SMA ($46.13) and $53.45 for some time.
A break and close below the 50-day SMA will be the first indication that the bears are in command. That will open the doors for a potential decline to $37.
The 4-hour chart shows that the bears are trying to sustain the price below the 20-EMA while the bulls are trying to push the price above it. If buyers succeed, the pair may rise to the downtrend line. This is the key short-term level to watch for. If this resistance is overcome, the pair may rally to $53.45.
Contrarily, if the price turns down from the current level and breaks below the 50-SMA, the price risks dropping to the support line. The bulls are likely to defend this level fiercely.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
Ethereum Foundation's previous big sale of ETH preceded a bear market, but there's little evidence that such sales affect the general market trend.
On May 6, Ethereum Foundation transferred nearly $30 million in Ether (ETH) to the Kraken cryptocurrency exchange, causing jitters in the market about a potential selloff event.
ETH price fell 4.8% to $1,900 on the day, but the decline has been negligible so far amid a wider recovery trend.
Ether's price recovered modestly to $1,920 on May 7 after testing its 50-day exponential moving average (50-day EMA; the red wave) near $1,850 as support a day ago.
Moreover, the price volatility dropped on Kraken in the said period, per the contracting Bollinger Bands Width in the chart below. That further shows traders' calm amid the Ethereum Foundation transfer.
Notably, the 50-day EMA has capped Ether's downside attempts so far in 2023, barring the early March selloff that saw the price briefly falling below the red wave. Meanwhile, testing it as support has prompted the ETH price to pursue a breakout above $2,000.
As a result of this support, ETH bulls may attempt to take the price above $2,000 again.
Conversely, a drop below the 50-day EMA could have traders eye a support confluence comprising a multi-month ascending trendline and the 200-day EMA (the blue wave) near $1,700 as the next downside target, down about 13% from current price levels.
Even with a larger decline, ETH would be maintaining its overall recovery trend when measured from its June 2022 bottom of $880.
A rising exchange balance suggests potential selling pressure rising and vice versa. In Ethereum's case, the balance remained lower across all the exchanges despite the Ethereum Foundation's transferring $30 million in to Kraken.
For instance, Kraken's Ether balance increased to 1.84 million ETH on May 6 from 1.83 million a day ago.
Nevertheless, the balance across all exchanges actually dropped to 18.15 million ETH from 18.22 million ETH on the day, indicating that any potential sell-pressure from the Ethereum Foundation can easily be absorbed.
The Ethereum Foundation's last big transfer was 20,000 ETH in November 2021, when the price topped around $4,850, and declining 80% thereafter. Similarly, the foundation sold 35,053 ETH at the local market top of around $3,500 in May 2021.
Related: Ethereum up 20% in April while Markets Pro sees 379% gain in one day
Many analysts treated these fractals as a sign of another possible market top formation near $2,000, arguing that the price may fall in the coming sessions.
Ethereum Foundation sold another 20,000 Ethereum at the recent local top.
— Brad Mills ⚡️ (@bradmillscan) January 28, 2022
Every time the eth foundation / Vitalik / Consensys dumps a massive presale bag it marks the top.
What’s the difference between ripple dumping hundreds of millions on retail vs ETH founders doing it? https://t.co/pw8ukMiR8v
But broader data suggests otherwise. For instance, Ethereum Foundation's large ETH sales occurred also during the 2020-2021 bull cycle, boosted by growing demand for risk-on assets in a lower interest rate macro environment.
In other words, there's little evidence to suggest that the Ethereum Foundation's sales have any impact on Ethereum's price trend. Instead, the cryptocurrency market is currently taking cues from the U.S. banking crisis and whether this will force the Federal Reserve to stop hiking and cut interest rates.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
