BTC whipsaws but select Alts soldier higher following May break-outs
BTC’s temporary break out leaves it back in the box but Alts continue to trend higher. BTC, once again, whipsawed traders over the past few days temporarily gapping up above the widely watched 10K resistance level only to gap back down into its May trading range to test 9.1K support and settle back to where it all started near 9.5K. It all reminds us of the title to the Pharcyde’s classic 1992 debut album Bizarre Ride II. So while BTC’s near-term trading was somewhat bizarre, the overall technical outlook has not meaningfully changed. In fact, the more interesting development in crypto continues to be the positive divergence in the Alt space we have been highlighting here over the past three weeks.
Fundstrat proprietary FS CryptoFX Indices continue reflect improving crypto technical internals – Similar to BTC, the FS CrypoFX 10 large-cap, FX40 mid-cap and FX250 small-cap indices are challenging, but have yet to reverse, their 2018-2020 downtrends. A rally above their Q1 2020 highs will need to develop to confirm a new uptrend defined by at least one higher high. The FX40 is noteworthy given it is reversing the relative performance downtrend versus the FX 10 that has been in place since Q2 2019. In addition, we would continue to draw investor’s attention to the advance-decline lines for the FX10 and FX40 that have rallied above their Q1 2020 highs in late April and continue to have the profile of a longer-term bottom with higher lows and higher highs now in place.
BTC outlook unchanged: 10-10.5K key resistance, 9.1K followed by 8.6K then 8K key support – Our overall outlook remains unchanged with BTC yet to signal a new emerging uptrend by rallying above its 10-10.5K resistance to reverse the widely watched 2018-2020 downtrend. On the downside, 9.1K is again first trading support coinciding with BTC’s April-June uptrend with first trading support near by at its 50-dma (8.6K) followed by its 200-dma near 8K. Given the improvement incrementally developing in the Alt space we expect BTC to follow and eventually resolve its 2+ year trading range to the upside.
Alts incrementally breaking out above key trading resistance while BTC consolidates. As noted above the technical behavior in Alts is noteworthy with ETH, ADA and XLM examples of accelerating technical profiles. In the very short-term, a near-term pullback would not be surprising but overall the trend ‘structure’ is improving.
ETH – In contrast to BTC, ETH has accelerated through its May trading range highs (216-217) to next resistance at 252 and has begun to pause/consolidate. 216-227 is now support with a break-out above 252 likely to see a move toward next resistance at 289. Note: ETH’s relative performance vs BTC continue to trend to the upside above its 15-dma supporting an overweight position.
ADA – We have focused on ADA here over the past few weeks given its resiliency while BTC has chopped sideways under resistance. ADA continues lead to the upside breaking above its may highs in the past few weeks AND rallying above next important resistance at its Q1 highs this past week. Next resistance is near the summer 2019 highs at .1069 with support near .0723 followed by .0620.
XLM – Similar to ETH, XLM continues to show evidence of emerging/accelerating after breaking out above resistance at .0771. Next resistance is at .0899.
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