Technical analysis of this week’s crypto trading market

The lukewarm sentiment in the cryptocurrency markets remains intact after the bitcoin touched just below the 8,600 levels over the weekend. Traders have been seeking clarity on the outlook of the prices, while many of the major cryptos have been traded sideways. OKEx’s BTCUSD Index started the week at around 8,500 levels. Although technical indicator suggests that a bitcoin price rebound could be insight, still it will be far from developing a trend reversal. Data from OKEx shows that active sellers have been slightly more than active buyers, indicating that BTC prices could still be under pressure.

In the Altcoin space, Ethereum has stolen the spotlight as the second-largest crypto by market cap outperformed BTC, suggesting that traders seem to favor ETH, and altcoin in general, at the time when bitcoin unable to show a clear direction. At the same time, Ethereum’s Istanbul hard fork is approaching, which is expected to introduce six key code changes to Ethereum. That could remain a major driver for ETH in the coming weeks.

What You Missed

  • We could see the prices of bitcoin hitting 25,000 levels by 2020, that’s according to Fundstrat’s Tom Lee. In an interview with CNBC, Lee said the leading crypto will rise to USD 25,000 if the number of its user doubles. “Cryptocurrencies are network value assets, meaning the more people hold the asset, the greater the value. It’s a log function — so if you double the users hold it, you get a quadrupling of value.” He believes that the number of bitcoin users will reach 1 million by 2022.
  • Libra’s testnet has booked more than 51,000 transactions since the September reset. Libra Association reported that it has developed 34 projects on the testnet, including 10 wallets and 11 blockchain explorers. The bloc also announced that it will launch a “pre-mainnet” soon, which will hold more testing and other experiments. The “pre-mainnet” now has 7 nodes in operation, with 14 more in process.
  • Bakkt’s retail investor app has entered the final stage of testing. The company said the new app is getting closer to launch. It will allow consumers to make everyday payments using bitcoin, and Starbucks is reported as one of its partners.
  • On the macro front, the BRICS countries plan to create a cryptocurrency for the payment settlement system. Russian media RBC reported that Brazil, Russia, India, China, and South Africa have been in the discussion of establishing a single payment system that able to settle transactions in a single cryptocurrency.

Price Analysis

BTCUSDT

  • The 3-hour chart shows BTCUSDT remains in the downtrend that started since late October, it poses another chance to test that resistance again.
  • The pair has been traded near the lower band of the Bollinger Bands, and a squeeze seems gradually in the making, which suggests volatility could increase in the short term.
  • Another reason that we could see a breakout is the RSI, which seems quietly form a bullish divergence after almost a month-long downtrend.
  • However, the OKEx BTC Long/Short remains at a high level, which suggests that the potential profit for short positions have been rising, increasing the chance of triggering a long squeeze.
  • CEM’s CoT Summary shows that short positions from leveraged accounts have dominated despite the overall number of positions that have decreased.
  • Key levels: 8790, 9135. A further downside could be possible if the pair fails to reclaim these levels.
Figure 1: BTCUSDT 3-Hour Chart (Source: OKEx; Tradingview)
Figure 2: OKEx BTC Long/Short Ratio (Source: OKEx)
Figure 3: CME’s BTC Commitment of Traders (Source: CME)

ETHUSDT

  • ETH has been one of the altcoins that outperformed BTC recently, ETHUSDT gained about 1% in the early Asia session Monday.
  • However, ETH bulls may want to wait a little further to enter a trade as the pair has approached the upper end of the triangle pattern. The MACD bearish crossover suggests that the price may not able to sustain at current levels, and the bias more on the downside.
  • The RSI also suggests that the momentum may not have much more room to grow, and it may retreat to the upper 40 handles before producing a triangle breakout.
  • Key levels: 194.54, 160.
Figure 4: ETHUSDT Daily Chart (Source: OKEx; Tradingview)

LINKUSDT

  • Chainlink has been one of the outperformers in the altcoin space since late September, surged about 64% against USDT in the period.
  • It’s possible that the pair could touch the 3.2 levels if the triangle pattern is unbroken.
  • However, both the RSI and the ultimate oscillator show a bearish divergence, suggesting that the rally momentum could be gradually running out of steam.
  • We would like to see both the RSI and the UO produce some higher highs before calling the rally is sustainable. However, the 20-day moving average seems decent support in the short-term.
  • Key levels: 2.778, 3.20.
Figure 5: LINKUSDT Daily Chart (Source: OKEx; Tradingview)

DASHUSDT

  • DASHUSDT has been approaching its lower end of the recent trading range, which formed since late September.
  • The pair has been largely moving in the range despite the effort of trying to break the lower end of the channel in late October, the price action has been corrected soon after the drop and back into the range.
  • As markets seem more favorable altcoins over bitcoin, the pair could have good support at near 66 levels and could target the 74 areas in the medium terms
  • Please Key levels: 66.7, 74.8, 61.2.
Figure 6: DASHUSDT 12-Hour Chart (Source: OKEx, Tradingview)

Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involves significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.


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