The importance of 8K and 10K for BTC – Key levels for ETH and ADA
Bullish news but a volatile technical response – Despite the past week’s quick sell-off from resistance that saw most crypto currencies break below rising 15-dma’s, most coins remain in uptrends supporting long side exposure. As always, we find it noteworthy that despite seemingly bullish expectations regarding BTC’s halving, Paul Tudor Jones’ endorsement and news JP Morgan is increasingly engaging with crypto, BTC and ETH ping ponged between key technical resistance and support the past week. So now what?
A balanced read of BTC’s technicals leaves ammunition for both bull and bears – Why? The bears can point to BTC’s 2018-2020 downtrend being intact with resistance near 10-10.5K which is effectively where BTC reversed from last week. This is a valid point and BTC will need to rally above that resistance level to reverse the downtrend and establish a higher high to confirm a new uptrend. Conversely, for the bulls, BTC’s longer-term uptrend near its rising 200-week remains intact, and one has to respect the quick upside snap back from its 200-dma this week. In effect, BTC is in the middle of two key important technical levels between 8K and 10-10.5K that will need to be exceeded to signal BTC’s next direction move. We continue to view BTC’s longer-term profile as bullish and would need to see BTC break below 8K to take a more cautious tactical view.
BTC’s tactical uptrends intact versus the S&P, gold and the TLT bond ETF – We continue to monitor BTC’s relative performance highs and lows of the past week to the S&P 500, gold and bonds as a signal for BTC’s next directional move. Currently, BTC remains in uptrends to all three asset classes, supporting overweighting BTC with a break below last week’s relative lows needed to signal a short-term downside trend reversal.
Alts: ETH continues to parallel BTC but ADA is technically noteworthy challenging last week’s highs – Similar to BTC and most coins, ETH stalled at resistance only to snap back from its 200-dma. ETH has yet to recapture its 15-dma (205) and continues to face short-term by the 62% retracement (212) and recent highs at 227. A break below the recent lows at the 50- and 200-dma (174-175) would be needed to signal a downside trend reversal.
ADA is noteworthy technically within the Alt space given it has quickly snapped back to its recent highs. A breakout to the upside above .054 would be a bullish break-out and positive signal some Alts are reaccelerating.
Fundstrat CryptoFX indices and A-D lines – Not surprisingly short-term pullbacks across most coins pulled all three of the FS CryptoFX A-D lines with the FX10 the most interesting pulling back and beginning to bounce from its Q4 highs. To signal a longer-term bullish trend reversal, all three market cap indices (FX10, FX40 and FX 250) will need break above resistance near current levels defined by their 2018-2020 downtrends.
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