Crypto rebounds stalling at resistance – ETHBTC remains noteworthy
What’s changing technically for crypto currencies?
After rebounding from deeply oversold levels in March, most cryptocurrencies are stalling under technical resistance coinciding with declining 50- and 200-dma’s. Given the long-term uptrend for BTC remains intact, our expectation is for the current pullback to be relatively shallow over the coming 1-2 weeks.
BTC stalling under declining 50- and 200-dma’s
BTC is stalling short-term under heavy technical resistance between 7-8K which coincides with a 50-62% retracement of the Q1 collapse and declining 50- and 200-dma’s. Slide 5 Interestingly, a similar pattern is developing for many other risk assets, notably equities where the S&P 500 is showing early signs of pausing at its 50% retracement of the Q1 sell-off and many cyclical stocks pull back from declining 200-dma’s.
Bottom line – Expecting a shallow pullback
After an impressive oversold surge, most crypto currencies (and risk assets) have begun to retrace/consolidate their recent gains. Given the longer-term trend remains positive for BTC, our expectation is for a relatively shallow, 1-2 week pullback. First support begins at the 6.5K with next support between 5.8K and its rising 200-week (1000-dma) near 5.6K.
ETH vs BTC: Positive divergence continues
ETH, along with most ALTS, not surprisingly have similar profiles as oversold bounces begin to retrace recent gains. However, what remains noteworthy for ETH is that its relative performance versus BTC continues to positively diverge. In contrast to ETH’s USD price, ETH vs BTC did not make lower price lows in March. So far, during the most recent pause/pullback, ETH vs BTC remains in an uptrend above its 15-dma supporting overweighting ETH.
FS CrytpoFX indices highlights
The FS CrytoFX 10 and FX40 advance-decline lines remain range bound above their Q1 breakout. To confirm a positive trend shift both A-D lines will need to move above the Q1 highs.
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