crypto market analysis

Hi Crypto Network,

Last week, the total crypto market capitalization jumped from a low of about $223 billion on April 28 to a high of over $263 billion on April 30. That is a jump of about $40 billion within a short time. However, the momentum could not be sustained as profit booking was seen at higher levels.

Though the several stimulus measures announced by central banks and governments are positive for crypto, the uncertain economic environment is compelling traders to book profits after every sharp up move.

However, the “whales” who are known to hold Bitcoin for a long time are unfazed by the volatility. They have been adding Bitcoin on dips. As a result, the number of addresses holding 10,000 bitcoins or more has risen to the highest level since August 2019, according to Glassnode. This increase might be because of the long-term hodlers adding to their holdings and some institutional clients diversifying into Bitcoin due to the current crisis.

Pantera Capital Founder and CEO Dan Morehead expects Bitcoin to follow the trajectory of the previous halvings and surge to over $500,000 by August 2021. Moreahead gives this a 50-50 chance of occurring. He also pointed out that Bitcoin has been outperforming gold year-to-date. According to Morehead, the yellow metal might be losing some of its lustre.

While we do agree that the previous halvings have led to huge increases in price, we believe that the current situation is different. If the speculators buy expecting a huge uptick in price after halving, they are likely to be disappointed. This could result in liquidation following halving, which can lead to a correction. However, as the trajectory and fundamentals of Bitcoin remain positive, the traders should view the dip as a buying opportunity.

 

BTC/USD

Bitcoin surged on April 29. That was followed by another move higher on the next day but the bulls could not sustain the breakout above $9,214.67. This suggests selling by the bears at higher levels.

However, the positive thing is that the bulls have not allowed the price to dip below $8,400. Currently, the leading cryptocurrency has formed a bullish pennant, which is a continuation pattern. If the bulls can breakout and close (UTC time) above the pennant, the uptrend is likely to resume.

The pattern target of this bullish setup is $10,071.66. If the momentum can carry the price above this level, the up move can extend to $10,522.51. The upsloping moving averages and the RSI in the overbought zone suggest that bulls have the upper hand.

Conversely, if the price turns down from the current levels and breaks below the pennant, it will be a bearish sign. The first support on the downside is the 20-day EMA. If this support holds, the bulls might make one more attempt to resume the up move but if the bears sink the price below the 20-day EMA, a drop to $7,466 is likely.

Due to the uncertainty regarding the halving event, traders can avoid taking positional trades and stick to short-term trading.

 

ETH/USD

Ether broke above the channel on April 29 and 30. On both occasions, the bulls could not sustain the higher levels. This suggests aggressive selling by the bears above the channel. As a result, the price quickly dipped back into the channel.

The failure to scale the price above the channel attracted profit booking that dragged the altcoin to the 20-day EMA, which acted as a strong support, as suggested in our previous analysis.

As long as the price remains inside the upper half of the ascending channel and the 20-day EMA slopes up, the bulls will continue to support the 20-day EMA. If the bulls can push the price above the downtrend line, a rally to the resistance line of the channel is possible.

If the bulls can push the price above the channel, the momentum is likely to pick up. Conversely, if the bulls fail to push the price above the downtrend line, the bears will make another attempt to sink the ETH to USD pair below the 20-day EMA.

If successful, a drop to the support line of the channel is possible. A break below the channel will tilt the advantage in favour of the bears.

 

XRP/USD

Though XRP broke above the $0.20524-$0.21629 resistance zone, it could not reach its target objective of $0.25. On April 30, the altcoin turned around from $0.23571 and dipped to a low of $0.20820.

However, the positive thing is that the bulls have defended the support at $0.20524. Both moving averages are sloping up and the RSI is trading above 60 levels, which suggests that bulls have the upper hand.

If the bulls can push the price above the downtrend line, a rally to $0.25 is possible. The bears might defend this level aggressively but if the momentum can carry the XRP to USD pair above this resistance, a move to $0.285 is likely.

This bullish view will be invalidated if the pair turns down from the current levels and plummets below $0.20524. If that happens, a deeper pullback to $0.17426 is possible.

 

BCH/USD

Bitcoin Cash rallied to $275.95 on April 30 but could not break out of the resistance of the range at $280. Therefore, the altcoin is now likely to extend its stay inside the large range of $200-$280.

When an asset is in a large range, it can be traded by buying the dips to the support of the range and closing the position near the resistance. Another possible trade setup is to buy after the price breaks out of the range.

Currently, the price is close to the midpoint of the range. If the BCH to USD pair bounces off the current levels, the bulls will make another attempt to scale the price above the $280-$286 resistance zone. If successful, the momentum is likely to pick up. The target objective on the upside is $350.

Conversely, if the bears sink the price below the moving averages, a drop to $200 is possible. A bounce off this level can also offer a buying opportunity to the traders.

 

BSV/USD

As suggested in the previous analysis, Bitcoin SV reached the overhead resistance at $227. However, the bulls could not push the price above this resistance. This suggests that the altcoin is likely to remain range-bound between $170-$227 for a few more days.

Both moving averages are flattening out and the RSI is just above the midpoint, which indicates a balance between supply and demand.

The advantage will tilt in favour of the bulls if BSV to USD pair breaks out of $227. Above this level, the rally can extend to $268.842 and above it $319.424. Therefore, traders can buy after the price sustains above $227 for more than four hours.

Another buying opportunity will crop up if the price bounces off the support at $170. However, if the price slips below $170, it will indicate an advantage to the bears.

Hopefully, you have enjoyed today’s article. Thanks for reading!

Have a fantastic day!

Live from the Platinum Crypto Trading Floor.

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