Financial Research

Crypto Technical Analysis

Crypto Technical Analysis

Click Here for the full copy of this report in PDF format. BTC surges through 13.8K resistance = another long-term bullish technical development in BTC’s favor.  BTC’s recent surge through the June 2019 resistance highs at 13.8K is yet another bullish check mark confirming a new bull cycle. While a very short-term pause appears likely (see below) we encourage investors to remain focused on the longer-term bullish technical profile developing and look to near-term pauses and pullbacks as opportunities to increase exposure notably: Active traders – Expect a pause but don’t lose sight of the longer-term emerging uptrend For the very active trader, a pause at current levels is likely to develop as BTC rallies into the upper end of its October uptrend channel. While the trend channel is obviously not textbook perfect, it does serve as a proxy for BTC’s multi-week uptrend. With 4-hour RSI pushing into overbought territory, we would expect BTC to begin a shallow consolidation near current levels. Rather than attempt to micromanage a pullback by selling and looking to perfectly time the next intra-day low, we continue to recommend holding at current levels and increasing exposure on near-term pullback toward support between 13-14K near the rising 15-day moving average. Long-term bullish charts to keep in focus during any pending pullback BTC’s weekly chart continues to build positively – 17-19.6K next major resistance -  BTCs break-out above 10.5K in August, 12-12.5K in late October, and 13.8K in November establishes a series of higher highs confirming BTC’s emerging bull cycle uptrend. Weekly RSI (77) is building toward overbought level, but if history is a guide, we would expect RSI to continue building to the upside toward 85-90 before an intermediate-term pause/pullback develops. Next major resistance is between 17-19.6K near the 2017-2018 highs. 1. BTC's relative performance vs equities, golds and bonds continues to trend to the upside. As the best performing asset class most years, BTCs relative performance reacceleration vs the S&P 500, Gold and the TLT Bond ETF remains one of the more important asset allocation trends underway. While risk assets in general have recovered into, and through, the US election, BTCs surge stands out as one of the leading asset classes for investors to maintain some exposure to. 2. Breadth/participation eroding for small and mid-caps – While BTC surges, participation is decaying in smaller cap cryptos. The Fundstrat FS CryptoFX advance-decline lines for the FX40 mid-cap universe has round tripped back to the April-June 2020 levels while the FX250 small-cap A-D line has just broken to new lows below its 2020 trading range. Remain focused on larger-cap cryptos until breadth shows evidence of improving.  Key slides from this report Resuming its longer-term uptrend – 17-19.6K next resistance (Slide 5)... BTC extends its leadership to the S&P, Gold and TLT ETF (Slide 6)... BTC – Overbought short-term – Expecting shallow pullbacks (Slide 3)... Participation decaying in mid and small cap cryptos (Slide 7)...

BTC tests 15K – Now what? – Buying pullbacks in an emerging bull cycle
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BTC collapses but holds 200-week sma, ETH vs BTC holds .22

Heavy technical damage but a few silver liningsLast week’s collapse in cryptocurrencies has left most chart patterns badly compromised with BTC breaking below its 2015-2020 uptrend. However, despite the technical damage that is now in place there are some silver linings developing notably that BTC has held and rallied from its 200-week sma, ETH has recaptured its Q4 2019 lows and ETH vs BTC has held key support at .22. BTCAt the risk of stating the obvious, the crypto break down over the past week mirrored the ‘get me out of everything’ panic that dominated all asset classes whether they were defensive (bonds and gold) or not (equities). Lower highs and lower lows are in place for BTC leaving in a compromised, potentially vulnerable longer-term profile. However, while BTC has broken a 4-year linear uptrend it has stabilized, and bounced, from support at its 200-week sma.  We have found the 200-week sma to be an important long-term structural support level for most asset classes and was the case for BTC in 2015 and again in 2018. In addition,Fundstrat’s Digital Asset Strategist, David Grider, noted earlier this week, prior to today’s rally, that at 5.5K (BTC’s 200-week sma) BTC represented an attractive valuation. Bitcoin is trading around a 5.5x Market Cap / Cumulative Mining Revenue ratio. It has not been this cheap on a relative fundamental basis, since it last bottomed out in December 2019 at $3,400 and before that, in December 2016 at $700 leading into the last bull marketSo, for now, technically we will again give BTC the benefit of the doubt that it is attempting to bottom but recognize BTC will likely need months of consolidation to repair the technical damage now in place. In addition, despite our longer-term positive disposition toward BTC, a break back below 5.5K would be concern despite the recent capitulation lows being at 3.8K. On the positive side, daily momentum is suitably oversold to expect BTC to attempt further upside recognizing today’s surge has already pushed BTC toward trading resistance between 6.4-6.8K just below its declining 15-dma at 6.9K. ETH – Similar to BTC, damaged but also recapturing a key level at its Q4 2019 lows near 116ETH’s failed under heavy resistance near 300 only to retrace almost all of the 2018-2020 range. Despite the damaged technical profile, ETH has snapped back above a key level defined by its Q4 lows. Daily RSI is suitably oversold to support further upside with resistance near the 200-dma at 177 up to the 50-60% retracements near 188-212 ETH-BTCDespite all the technical destruction across most asset classes, ETH vs BTC has held important support near .22 and is showing evidence of bottoming Fundstrat FS CryptoFX index highlightsAlthough the price profiles of the FS CryptoFX10, 40 and 250 collapsed over the past week the Advance-Decline lines for the FX10 large-cap and FX40 mid-cap are showing signs of bottoming above a key technical level defined by their Q1 break-out levels.

What next after BTC’s surge toward next resistance near 13.8K?

For a full copy of this report in PDF format click this link. After surging through resistance at the August highs near 12.5K  over the past week, BTC is closing in on next major resistance near June 2019 highs at 13.8K. With short-term trading indicators pushing into overbought territory, traders are understandably questioning whether they should reduce exposure. We disagree. Sure, a near-term dip or pause is likely given the recent rally, BUT the longer-term term technical structure continues to improve suggesting pullbacks are likely to be short lived and relatively shallow. Based on the following bullets and accompanying charts, we remain bullish on BTC’s longer-term prospects and rather than attempting to micro manage trading position, maintain exposure using pullbacks and pauses to further increase exposure.  Key technical developments Improving long-term price structure following 2018-2020 consolidation – BTC’s price structure is incrementally transitioning into a new long-term uptrend following its very broad 2018-2020 consolidation above its long-term structural uptrend defined by the 200-week sma. BTC has reversed its 2018-2020 downtrend with a series of higher highs and lows following the March collapse in all risk assets. Bottom line: BTC’s price pattern is in the early stages of a new longer-term uptrend with the June 2019 highs at 13.8K its next key resistance hurdle followed by 20K. While a pause/consolidation between current levels and 13.8 is likely, our recommendation is for longer-term investors to stay focused on the improving longer-term technical structure and to not be unnerved by tactical pullbacks and consolidations. Slide 3Relative performance trends vs equities, golds and bonds is beginning to trend to the upside. In our opinion, the most more noteworthy chart for investors to focus on is BTC’s relative performance versus the S&P 500, Gold and the TLT Bond ETF. BTC is likely in the early stages of assuming leadership to all three asset classes. This appears to be an almost textbook perfect bearish to bullish transition as BTC emerges from 6-mnonth trading range/pause following its 2019-2020 downtrend reversal. Asset allocators take note! Slide 4Daily chart is becoming overbought but expect pullbacks to be shallow and short lived. Momentum indicators are becoming overbought on BTC’s daily chart but they are by no means extreme yet. Our expectation is that pullbacks are likely to be shallow given the bullish higher weekly time frame chart discussed above.  Slide 5Intra-day 4 hour chart IS very overbought – Given BTC’s impressive surge over the past few days, it is hardly surprising its 4-hour RSI momentum indicators are very overbought. However, rather than attempting to micro manage the trade by selling in hopes of also identifying the exact pullback low, we recommend maintaining exposure at current levels and using near-term pauses and consolidations to further build BTC exposure. Slide 6Too early to rotate to small-caps – Participation remains concentrated in larger-caps – Our Fundstrat FS CryptoFX advance-decline lines for large-caps (FX 10), mid-caps (FX40) and small-caps (FX250) illustrate that upside participation is concentrated in larger-cap cryptos. As such, we recommend investors focus exposure in larger-caps, until we see breadth improve into smaller-caps. Slide 7 Resuming its longer-term uptrend – 13.8K next resistance (Slide 3)... BTC emerging vs the S&P, Gold and TLT bond ETF (Slide 4)... BTC – Overbought short-term – Expecting shallow pullbacks (Slide 6)... Participation remains concentrated in large-caps (FX 10) (Slide 7)...

Crypto sells off with risk assets but is holding above first key support

Crypto sell off with most risk assets – Cryptocurrencies broadly sold off today along with most risk assets raising the question of whether a bigger correction is developing. While a deeper correction is always possible it is premature to technically conclude BTC’s May-June trading range is morphing into a downtrend. Key technical levels for BTC – The long-term trend for BTC remains positive with a move above 10-10.5K resistance needed to signal a new upside acceleration taking hold. From a short-term trading standpoint, today’s reversal was obviously not encouraging, particularly given BTC, along with many Alts, were in the early stages of bottoming/rebounding from support following last week’s pullback. However, BTC remains in a broad sideways trading range between 10-10.5K resistance and a key support band at 8.6-9.1K. A break below 8.6K would be needed signal a breakdown and downside trend reversal by establishing the first lower low since the March bottom. Next support is at the 200-dma (8.3K) followed by the 50% retracement (7.1K) of the Q1 sell-off.  ETH sells off but also holds above first support – Similar to BTC, ETH reversed to the downside today after bottoming above a broad support band between 216-227 near its 62% retracement of the Q1 decline. We have expected ETH to break-out above 252, which will be needed to signal a new upside acceleration developing. Next resistance is at 289. However, should ETH break below support between 216-227, near its 50-dma at 221, a downside move to 188 is likely, coinciding with its rising 200-dma. ETHBTC remains noteworthy as an emerging uptrend – ETHBTC has rallied back to resistance at .026, just above its 62% retracement level (.0253) of the Q1 sell-off. We expect ETHBTC to rally above  .0265 with next resistance at .0285. ADA remains resilient – ADA has pulled back with other most other tokens this week, but for ADA, only marginally so. ADA would need to break below its 50-dma at .07 to signal a meaningful trend reversal. Next resistance above .088 is at the summer 2019 highs at .1069. ADA’s relative performance vs BTC remains resilient supporting an overweight vs BTC. Fundstrat FS CryptoFX index highlights. The FS Crypto Advance-Decline line for the FX 10 large-cap and FX40 mid-cap indices has pulled back to the next key technical  level near the April 2020 breakout highs. While it is early to conclude these A-D line are bottoming, doing so near current levels would be a bullish indication and reinforce the longer-term uptrend developing defined by higher highs and lows. In addition, the FS Crypto40 mid-cap index continues to show evidence of emerging in relative to the FS CryptoFX 10 large-cap index. 

BTC remains range bound as select Alts showing signs of bottoming

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 – 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 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.

Crypto break-outs pending? Tight consolidations look bullish

Seeing is believing for many TA’s but traders and investors don’t always have that luxury – Many technical analysts understandably prefer to see technical patterns resolve in one direction or another before committing new capital to a developing trend. We  have said it before, pre-judging technical patterns before they resolve can be detrimental to one’s  financial health. That’s all fine for starting new positions but most investors are already committed to positions that need to be managed. The alternative approach is to be positioned with an expectation a pattern will resolve in a specific direction and managing the uncertainty with stop losses should the pattern resolve in the opposite direction. Given the volatility within digital assets, that approach may very well prove to be a better tactic in the coming weeks.  Why is this discussion likely important now for digital assets now? Over the past few weeks, most digital assets have traded in increasingly narrow ranges head faking every few days in one direction or the other. Our expectation is many cryptocurrencies will resolve to the upside in the coming weeks given their underlying trend since the March lows remains positive and in the case of BTC, its longer-term trend remains positive. In short, we want to be positioned in the direction of the longer-term trend and expect another upside move to develop shortly.  Noteworthy technical improvement developing within the Fundstrat FS CryptoFX A-D lines and indices. Supporting our positive outlook is the ongoing improvement in our A-D lines trending higher along with the H2 2019-2020 downtrend reversals that are now in place for the FS CryptoFX 10 large-cap, FX40 mid-cap and FX 250 small-cap index. In addition, relative performance of the FS Crypto40 mid-cap continues to improve versus the FX10 large-cap index. BTC – Very little has changed this week with BTC consolidating above 9-9.5K support just below the widely watched 10K and 10.5K resistance levels. BTC continues to edge higher along its 2-month uptrend and we expect it breaks above 10K in the coming 1-2 weeks, possibly sooner, to challenge next resistance near 10.5K. We continue to view the longer-term trend as bullish with the 2017-2020 downtrend near 10.5K defining a resistance level in the cross hairs for anyone watching BTC’s chart. It is the first level that will need to be exceeded to signal the early stages of a new uptrend followed by 13.8K.  On the downside, 9.1-9.5K just above the rising 50-dmam remains short-term support and a stop loss/reversal level. 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. ADA – Over the past few weeks, we have featured ADA as one of a handful of Alts exhibiting impressive technical strength, breaking above resistance levels ahead of most other cryptocurrencies. After an impressive surge, ADA is beginning to pause but has yet to show evidence of reversing its relative uptrend vs BTC. XMR is illustrated as a proxy for the tight consolidations developing in the ALT space. Our expectation is XMR is poised to break-out of its May-June trading range which should ripple through to many other Alts.  Could we be wrong? Of course, but the benefit of technical analysis is that we will know our trading view is incorrect very quickly on a break below the consolidation lows of the past two weeks.

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.

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.

10K remains key resistance for BTC with 9.1K important trading support

Similar to other risk assets, such as the S&P 500, BTC has traded in a relatively narrow range under resistance through May. A breakout in either direction from the recent trading range is likely to signal BTC’s next tactical  directional shift. 10k followed by 10.5k remain the levels traders are fixated on but 9.1K also remains an equally important trading level to be aware of. Our bias is for an upside breakout to develop given BTC’s short-term (15-dma), intermediate-term (50-dma) and longer-term (200-week sma) trends remain positive. In addition, the advance-decline line for the FS CryptoFX 10 large-cap index is in a confirmed uptrend defined by a series of higher high and higher lows. BTC is also trending positively to the S&P 500 recently establishing 7-month relative high and it is challenging its 2018-2020 relative performance downtrends to gold and the TLT bond ETF. An upside rally above 10-10.5K resistance would likely be accompanied by an upside trend reversal to gold and the TLT confirming a new bullish uptrend to both. However, we also fully appreciate the risk of prejudging any technical pattern before it has resolved, a lesson we have learned once too often over the past 28 year of doing technical research. In fact, 9.1K, just below BTC’s rising 15-dma at 9.4K, is the level we would recommend higher frequency traders use as a stop loss level. Why? A break below 9.1K would signal a lower near-term low and a reversal of the March-May uptrend. Next support is at 8K near BTC’s 50- and 200-dma’s. ETH – 216 remains resistance, 15-dma trading support at 202 – Not surprisingly, similar to BTC, ETH has rallied back to an important trading band between 216-227 resistance coinciding with a 62% retracement of the Q1 decline. For traders, we recommend using the 15-dma at 202 as a stop loss level given a break below that short-term support level would open a risk window to next support between the 50-dma at 184 and 200-dma at 175. ADA – Break-out or fake-out? – 15-dma key downside support. In last week’s note, we featured ADA given it was exhibiting unique strength challenging its May highs ahead of most Alts with improving relative performance vs BTC. ADA is again noteworthy this week having broken out above the May highs (.054) ahead of BTC and ETH over the past two days. ADA’s recent break-out confirms its ongoing uptrend, and while it pulled back today, it would need to reverse below its rising 15-dma at .051 to signal a failed breakout with next support at its 50- and 200-dma’s at .042. Fundstrat CryptoFX indices and A-D lines highlights – As noted above the FX 10 A-D line is in a confirmed uptrend defined by a series of higher highs and higher lows. Key upside resistance levels remain at the 2018-2020 downtrends for the FX10, FX 40 and FX250 cap weighted indices.

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.

BTC challenges 9-9.5K resistance making new 7-month highs vs S&P 500

A pause for most Alts but BTC remains resilient, challenging 9.5K heading into its halving – Most cryptocurrencies paused or pulled back over the past week after rallying into resistance bands with short-term momentum peaking at overbought levels. BTC also paused but has been impressively more resilient notably over the past two days, challenging resistance between 9-9.5K as the widely anticipated May 12 halving draws near.  So what to do? While the debate regarding how BTC will react to its halving rages, our recommendation remains straight forward based on BTC’s current technical setup.  BTC remains above its tactical uptrend at its 15-dma – From a tactical standpoint, BTC is overbought short-term after punching above its widely watched 200-dma last week. However, BTC  also remains in an uptrend defined by its rising 15-dma at 8.4K. Until that moving average is broken, we recommend tactical investors and traders remain long. A move above 9.5K would likely see a move to next resistance at 10.5K. BTC makes new 7-month highs versus the S&P 500 with uptrends intact versus Gold and Bonds    One noteworthy milestone that developed over the past two days was BTC rallying above its Q1 2020 and Q4 2019 relative performance highs versus the S&P 500. BTC also remains in short-term relative performance uptrends to both Gold and the TLT bond ETF from its March lows. Here again, for tactical traders, we would remain overweight BTC versus these three asset classes using the 15-dma of the relative performance as a stop loss level. BTC’s long-term profile is repairing – As we have discussed here recently, BTC is slowly repairing the long-term technical damage that developed during the March breakdown that torpedoed every risk asset. The long-term trend remains positive and supportive of buying pullbacks when and if they develop. A move above the 2020 highs near 10K resistance, should it develop, would be an important first step confirming a new longer-term uptrend with 13.8K the next important resistance hurdle. ETH and ETHBTC – ETH is overbought and stalling short-term at resistance near its 62% retracement level (212) but continues to hold first key support at its 15-dma (199) which we recommend as a trading stop loss level. Next support is near 176. Similarly ETHBTC has pulled back sharply but is quickly becoming oversold and nearing support at .022, coinciding with an uptrend that began in January 2020. Fundstrat CryptoFX indices and A-D lines – Not surprisingly short-term pullbacks are underway across all three FS CryptoFX A-D lines –  We expect pullbacks to be relatively shallow and short lived.

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