Crypto markets remain in uncertain waters – Will Bitcoin bulls continue to defend the US$29,800.00 support?

May 11, 2022 - 2 weeks ago
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Most signs have pointed downward over the five consecutive days as uncertainty over U.S. inflation, interest rates, and the economy have “technically” put the ‘price trends’ for cryptocurrencies in uncertain waters, as many U.S. Federal Reserve speakers, the key U.S. inflation data on Wednesday awaits.

Meanwhile, after many several twists and turns, Bitcoin has roughly rebounded by over +1% and presents an improvement that has the potential of continuing if the current pattern holds.

However, investors are eyeing April’s consumer price index report, which is expected to show that inflation may have peaked, which could temporarily soothe global markets if confirmed.

The U.S. Bureau of Labor Statistics will release the April Consumer Price Index (CPI) data on Wednesday, May 11 at 10:30 pm Sydney time.

According to forecasts, the (U.S. CPI) report is expected to show headline inflation rose 0.2% in April, while the forecast is at 8.1% year-over-year.

That compares with a whopping 1.2% increase in March, or an 8.5% gain year-over-year.

The Core U.S. CPI is expected to rise 0.4% or 6% year over year, which compares with 0.3% in March or 6.5% on an annualised basis.

Based on the technical indicators for Bitcoin, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator is negative, although it is developing a potential rebound, while the Moving Average Convergence Divergence (MACD) oscillator supports a negative bias, with the ADX (trend) indicator indicating a bearish trend.

With the region of US$29,800.00 intact, we still need a break above the resistance at US$35,500.00 to reinstate the bullish trend/momentum and potentially support a target of US$38,000.00 to US$39,000.00. Reassess from there.

Although we may witness many swings between gains and losses, an unexpected break of US$29,800.00 could be devastating for the bulls as this may reveal the path to the region of US$23,400.00.

Also, note, that the daily close from the Japanese candlestick posted a “Long-legged Doji”.

A “Long-Legged Doji” is a candlestick pattern indicative of indecision, as buying and selling forces are in equilibrium after pushing and pulling to establish a trend.

Daily Chart of Bitcoin


Meanwhile, Ethereum, the second-largest crypto by market cap, has put in a modest bullish performance, rising approximately +6.85% since rebounding in front of the lows seen around January 2021 at US$2,150-60, which is also a crucial level.

Based on the technical indicators for Ethereum, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator is negative; however, it has rebounded out of the oversold zone, while the Moving Average Convergence Divergence (MACD) oscillator supports a negative bias, and the ADX (trend) indicator holds to a bearish trend.

The daily close from the Japanese candlestick also posted a “Long-legged Doji”.

The formation of long-legged doji indicates a state of indecision about the future direction of the price movement.

As the bullish foundation holds from the January 2021 lows at US$2,150-60 should, in the short term, see a potential rise to US$2,500-10.

An upward break from this region should put the bulls back on the path to recapturing the trendline at US$2,760-80. Reassess from there.

Conversely, a decisive break of this region would unveil the bearish pathway to US$1,685-90.

Daily Chart of Ethereum

Binance, the utility token of the global crypto exchange, bearish pressure eases on Tuesday as the bulls emerge from the May 2021 lows around US$205.00 to US$215.00 area.

Based on the technical assessment, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator holds to a bearish bias; however, it has rebounded out of the oversold territory, while the Moving Average Convergence Divergence (MACD) supports a negative signal, with the ADX (trend) indicator supporting a bearish trend.

Viewing the topside, the resistance remains at some distance to reinstate the bullish trend, as it presently holds from US$350.00. Recesses from there, with the minor resistance now higher since the US$316.00 was claimed by the bulls on Tuesday and now looks towards the US$335.00 level. Reassess from there.

Daily Chart of Binance

There are bullish markings for Cardano’s (ADA/USD) daily chart after the market price closed in the New York session, and now views a posted an “Inverted Hammer” Japanese Candlestick.

The Inverted Hammer candlestick formation occurs mainly at the bottom of downtrends and can act as a warning of a potential reversal upward.

It is important to note that the Inverted pattern is a warning of potential price change, not a signal, in and of itself, to buy.

Reading into the recent decline, (ADA/USD) is currently holding above the (downside measured move (support)) at US$0.58 to US$0.62.

Due to its timeframe, technical traders will likely continue to monitor the technical indicators as the market price(s) holds in uncharted territory.

Based on the technical assessment, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator is negative. However, it has rebounded out of the extreme oversold territory.

At the same time, the Moving Average Convergence Divergence (MACD) holds to a negative signal, with the ADX (trend) indicator supporting a weak bearish trend.

While the level at US$0.58 to US$0.62 is intact, it is assessed the bulls may regroup and look to the challenge of the region located from US$0.78 and then US$0.88. Reassess from there.

Conversely, a decisive break and close beneath the US$0.58 level would support a measured move to the region of US$0.42 to US$0.44.

Daily Chart of Cardano (ADA/USD)

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