Cryptocurrencies abruptly u-turned over weekend sending most back to key technical levels as global macro worries intensified. BTC is now testing important support at 7.5-7.7K that needs to hold to keep its longer-term uptrend intact, while ETH is also testing a key level at 180.
BTC – Benefit of the doubt as BTC is oversold short-term at long-term trend support.
Last week, we highlighted BTC was likely starting a short-term rebound only to promptly see BTC collapse through the weekend back to key support at its 2015-2020 uptrend and 62% retracement of the 2H 2019 rebound. Given daily and 4-hour RSI is suitably oversold, we recommend giving BTC the benefit of the doubt it will hold current levels. While the technical backdrop should support a bounce, BTC’s next meaningful directional shift will likely be dependent on whether the broader macro backdrop for traditional assets can stabilize or not. Our expectation is that it will. However, a break below 7.5K would jeopardize the longer-term bullish trend for BTC with next critical support at the prior lows in Q4 2019 near 6.5K, followed by the rising 200-week sma at 5.5K.
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