BTC consolidating at resistance but ADA breaks out, ETH likely to follow

Over the past week BTC broke below near-term support levels at its 15-dma and then a key level 9.1K coinciding with its March-May uptrend, only to bounce back over the past three days. In fact, while the very short-term volatility violated near-term support raising trading concerns BTC was potentially into a corrective phase, the rebound this week was from a secondary uptrend line joining the late March and April lows. 

The bottom line is that 8.6K is a new tactical line in the sand for BTC given higher lows remain in place for BTC. So, for now, BTC’s consolidation continues under the important, widely watched 10-10.5K resistance band coinciding with longer-term downtrend joining the 2018-2019 and Q1 highs.

Although BTC has yet to confirm its next major direction move by moving through the 8.6 and 10.5K technical thresholds, there are other encouraging technical developments underway notably:

FS CryptoFX Advance-Decline for the FX10 large-cap and FX40 mid-cap indices have completed bottoming patterns over the past few months reversing the 2H 2019 downtrend followed by a series of higher highs. Unless a downside move below the Q1 high develops, and more importantly below the Q1 lows, we judge the current advance-decline technical structure to be bullish. Granted, similar to BTC, the absolute price of the FX10, FX 40 and FX 250 have yet to break above their 2018-2020 downtrends but all three are currently challenging those levels.

BTC versus the S&P, Gold and Bonds (TLT) is also consolidating just below important resistance with BTC vs Gold and the TLT bond ETF testing its 2018-2020 downtrends.  A major reversal has not yet to be confirmed but it wouldn’t take much for new relative performance highs that should it develop (our view), will likely trigger further momentum buying.

Alts – Select Alts are improving with ETH trading in a tight trading range just below its late April-early May highs between 216-227 with relative performance vs BTC trending positively above a rising 15-dma. Next resistance above 227 is at 252 then 289. A break below ETH’s 50-dma sma at 193 would be needed to turn the tactical.

ADA – We have featured ADA in this weekly note over the past few week’s given it has been positively diverging from BTC and most Alts. Although ADA has not been consolidating below its Q1 highs in the same way BTC and ETH has, it did break out above the late April highs and resiliently consolidate above the break-out into late May and surged again to new recovery highs today.

XLM is also at a key near-term inflection point having pulled back to its rising 50-dma with early signs relative performance is improving. .0771 remains next important resistance.