BTC remains range bound as select Alts showing signs of bottoming

Jun 17, 2020 • 3 Min Read

A pullback for BTC along with most risk assets but a few key Alts showing early signs of bottoming  at support – Cryptocurrencies, faded over the past week, with BTC dropping from just under 10K resistance last Tuesday in conjunction with most other risk assets, with short-term lows developing this past Monday. Overall BTC remains in a broad trading range above key support between 8.6-9.1K BUT it is the technical behavior of a handful of Alts that has our attention technically notably for ETH, ADA, NEO and XLM.

Key levels for our FS CryptoFX indices and advance-decline lines – From a top down index perspective, there are a number of noteworthy levels to pay attention to within the Fundstrat FS CryptoFX indices. First, the FS CryptoFX Advance-Decline lines for the FX10 large- and mid-cap indices are pulling back after completing an important multi-month bottoming pattern. As a reminder, while BTC collapsed to new 2020 price lows in March, our FX10 large-cap and FX 40 mid-cap advance-decline lines bottomed in January of this year and have progressively made higher lows and higher highs, the definition of an uptrend, through this year. Provided the recent pullback is able to hold above the Q1 highs, we continue to view the overall trend as positive. Secondly, the absolute price of the FX10, 40 and 250 indices will need to rally above their Q1 highs to confirm a new, longer-term upside trend reversal.

Cross asset trends – BTC relative to the S&P, Gold and the TLT Bond ETF – We continue to monitor BTC’s relative performance vs other asset classes as one catalyst likely to draw fund flows toward BTC. After an impressive Q2 rebound, BTC relative performance has stalled over the past few weeks, and while it has broken the linear uptrend from the March lows, it remains above key support defined by the late April-June trading range lows. To signal a downside reversal, BTC would need to break below the May-June trading range lows. Conversely, an upside break-out above the May-June relative performance trading would be a bullish signal of a new long-term uptrend developing versus other assets classes. The next few weeks will be telling. Stay tuned.

BTC remains range bound as select Alts showing signs of bottoming

BTC – As noted above BTC remains confined by its May-June trading and has to signal its next directional shift but resolving that narrow consolidation in one direction or the other. Our expectation continues to be BTC will ultimately resolve to the upside but continue to stress the importance of waiting for confirmation and not pre-prejudging technical patterns. Key downside support is between 8.6-9.1K with major downtrend resistance between 10-10.5K. Next support is at 8.2K at BTC’s 200-dma followed by 7.9K at the 38.2% retracement. 

ETH has made very little absolute price headway over the past week after rallying almost exactly to its March 7th highs at 252. Short-term momentum (RSI) is overbought but ETH has yet to show any evidence of failing as it consolidates in a tight range below 252 resistance. A push above 252 would support a move toward the Q2 2020 highs at 289. Slide 10

BTC remains range bound as select Alts showing signs of bottoming

ADA remains of interest given it led BTC off the March lows rallying above its Q1 2020 highs at .0723.  ADA began to pause/pullback with most other tokens BUT is showing early signs of firming above .0728 support at its 62% retracement. Note ADA’s relative performance vs BTC continues to lead to the upside – Remain overweight vs BTC tactically until ADABTC breaks below the June lows at .0693. Next support is at the 50% retracement at .0623.

NEO and XLM have similar technical profiles having pulled back over the past two weeks back to support with VERY early signs of firming near rising 50-dma’s. Daily RSI now back marginally below neutral, unwinding much of the overbought condition that developed into the early June highs.

BTC remains range bound as select Alts showing signs of bottoming

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