Momentum Reversal Reinvigorates Crypto’s Bullish Outlook

[ad_1]

My studies last week increased the chances of us developing in a low-end environment. But this week’s aggressive rally re-energizes the bullish outlook, targeting new highs for the year in the weeks ahead.

Macro vs. TechniquesMy studies over the past week have increased the risks of us developing in a low-end environment. But this week’s aggressive rally re-energizes the bullish outlook, targeting new highs for the year in the weeks ahead. The macro backdrop has little effect at the moment, remaining negatively correlated. However, I would view a positive stock market as a tailwind for crypto now, when we would need to see an aggressive de-risking move in the Nasdaq to worry crypto markets.

Ethereum vs BitcoinThe outlook shifted to a more bearish stance last week, looking for a retest of the range lows after the failure to clear the range resistance at 0.0708. We are now in the low end. And while the momentum is oversold and suggests a rebound, the impulsive nature of the move towards this region suggests that the rebounds will be muted and we will fall to the next Fibonacci support around 0.057. A return to 0.065/0.066 is needed to nullify these downside risks and confirm that we are still in the current range environment.

Bitcoin

The breakdown last week via pivot support at 25,350 has thrown a bit of a curveball, suggesting we may just be range bound. However, we still hold channel support and the underlying wave count remained bullish. But the 15+% rally in a few days was impressive, to say the least. This reinvigorates the bullish outlook with the break of channel resistance and momentum in bullish mode. Pullbacks should remain jerky and corrective in nature. They shouldn’t come back down to 27,000 at this point. Above this support, we should see an extension into the 33,000-36,000 resistance window and then revisit.

Longer term, my studies suggest the bearish cycle from the 2021 highs hit last year around 15,500. Early targets and upside resistance are in the 33,000 region, but the main target is of 36,000 (i.e. Fibonacci and head and shoulders projection). I suspect we see this region holding the first test, but the very long term targets are 42,000-48,000. To change this long term outlook, we would need a drop down to 19,500. Such movement would suggest that we are in a choppy range between 15,000 and 30,000 for several months.

EthereumAs with Bitcoin, the breakdown between 1740 and 1714 has created concerns about the short/medium term outlook and whether we are actually in a longer range. The impulsive bounce through the wedge resistance re-energizes the underlying bullish outlook.

However, as Bitcoin targets new highs, it is less clear at this stage whether Ethereum will make it. Watch the low end in the spread for guidance on this. For now, however, with support above 1765, we should see further movement to the next resistance in the 2050 area, if not a test of the highs.

From a longer term perspective, the reversal from last year’s lows targets resistance around 2400/2450, but may extend to 3000-3300. A drop to 1370 negating this broader outlook, signaling that the gains have just been another 3 wave correction and we are now in a broad but lower choppy range, potentially through the end of 2023.

Robin is a global market veteran, with over 30 years of buy and sell side experience, as a strategist and trader. He now provides strategic trading and investment advice to hedge funds, family offices, high net worth individuals and dealing desks around the world. Photo Credit: depositphotos.com (The commentary in the above article does not constitute an offer, solicitation or recommendation to make or liquidate an investment or to effect any other transaction. to any investment or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.) Enter your email to read this exclusive Macro Hive

OR

START A 30 DAY FREE TRIAL

Already have a Macro Hive Prime account? Login

[ad_2]