• Patrick Maldonado

Bitcoin in Consolidation

Last week has seen a rather stable Bitcoin price action as it consolidates from the previous week’s market movement.


Macro Analysis

BTC/USD

Bitcoin currently finds itself in a consolidation period after its previous downfall. It is important to highlight that some of the daily EMA’s are showing potential sign of becoming a new resistance for Bitcoin. The bearish cross between the 20 and the 50 EMA could potential be an indicator for a continuation to the downside. Even though Bitcoin moved harshly to the downside, some of the indicators are still neutral and have room for further movement to the downside.

On the other hand, Bitcoin tested an important support at $10,000 and has a good probability of potentially continuing the bull trend after the pandemic crisis bottom. It is noted that this might be mainly due to the institutional movement and might be related more to traditional financial markets rather than interest in Bitcoin.

A potential move to the upside could see bitcoin hitting the top resistance at $12,000 whereas a move to the downside could initially see a swing for the $9,500-$9,100 level.


Altcoin Market Cap

The overall market cap saw a huge increase in its price action as the DeFi space gained a lot of momentum. Even though the market broke its previous downtrend, it has shown some weakness around the 140 Billion mark. The analysis for most altcoins stays similar to Bitcoin. We are currently in a correction and finding out if this will continue to the downside as some of the averages start to point down.

It has been discussed that DeFi might me over-hyped for the time being as a lot of the projects out there might not be the long-term winners. DeFi is definitely a disrupting space that will earn more market over time, but in terms of the actual projects versus its valuation, there might be more room to go to lower levels.

Higher levels to look at for a swing to the upside are a retest of the $140-150 Billion mark whereas a move to the downside would lead to a retest of the $110-120 Billion mark with a potential break out towards the $100 Billion mark.


Trading Tips

#1 Trading View is a very good platform for beginners as its interface is very user friendly. New traders will notice that they have a limit on the number of indicators for free accounts. If you are using moving averages you can add different ones into a single indicator instead of several slots. To do this you will need to add a triple or quadruple EMA. You can find the script to a modified version I made through the following link:

https://www.tradingview.com/script/mYqUXtrB-Triple-Any-Moving-Average-TCE-Trading/

#2 The cryptocurrency market tends to be very volatile. For other asset classes, using lines for both support and resistance can be very useful. For crypto doing this will lead to a lot of fakeouts. For this reason, it is important to grab areas rather than lines. Extending an area over different wicks might lead to a better estimation of where the price might revert or break out for real.

It is possible to extend these areas with the figure’s settings so that it is visible in the future. For more info please watch the last part of the video.

#bitcoin #tradingview #technicalanalysis #cryptocurrency #marketanalysis #monero #IRS #trading

More about the author:

Patrick Maldonado is a Cryptocurrency Trader & Market Analyst at Alphachain Capital.


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