Signs of caution remain in the crypto markets

June 22, 2022 - 2 weeks ago
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Many crypto traders are doubtlessly reading many negative headlines across the newswires since the weekend tumble.

From my experience, many traders often get bearish at the bottom of the range, and at present, it is assessed US$19,000.00 for Bitcoin; this could be just that after the weekend challenge was rejected.

Having now held above US$19,000.00 for a period of 4-days, the oversold Relative Strength Index (RSI) 3-daily and weekly ‘lookback’ timeframe indicate a potential rebound could be brewing in the crypto markets.

That being said, market traders are most likely to remain cautious as they try to assess whether the crypto markets can fall further as they weigh the risks to the economy, with the U.S. Federal Reserve taking aggressive measures to tamp down surging inflation.

Looking ahead, the U.S. Federal Reserve Chair Jerome Powell heads to the U.S. Congress for his semi-annual congressional testimony.

U.S. Fed Powell will need to justify last week’s biggest rate hike since 1994 in front of the Senate Banking Committee this Wednesday and Friday.

Based on the technical indicators for Bitcoin, the Relative Strength Index (RSI) 3-daily and weekly ‘lookback’ timeframe remains buckled, negative and extremely oversold, while the Moving Average Convergence Divergence (MACD) oscillator supports a negative bias, while the ADX (trend) indicator is trending bearish in both timeframes.

Although the US$19,000.00 was penetrated, a daily close beneath this level observes little support until US$12,300.00. Reassess from there.

Viewing the topside, there are many hurdles before any bullish call would be made, with the near-term cap seen from US$28.600.00, with the immediate resistance viewed from US$23,500.00. Reassess from there.

Daily Chart of Bitcoin

The world’s second-largest cryptocurrency, Ethereum, remains steady above the US$1,000 mark (or support at US$936.00) into the Wednesday, as the market traders await the U.S. Fed Chair Jerome Powell’s Testimony.

Although many traders view the Ethereum as a “bearish market”, it is assessed that only a daily close beneath US$936.00 would be considered negative and expect further downward pressure, with the measured trajectory seen to the area of US$620.00. Reassess from there.

Viewing the topside, the near-term top (resistance) is observed from US$1,640-70, with the immediate assessment viewed to US$1,300-60.

Based on the technical assessment, the Relative Strength Index (RSI) 3-daily and weekly ‘lookback’ indicators hold a negative bias and remain extremely in an oversold condition.

The Moving Average Convergence Divergence (MACD) oscillator supports a negative signal. The ADX (trend) indicator from a daily and weekly timeframe holds a bearish bias.

Daily Chart of Ethereum

Binance, the cryptocurrency issued by the Binance exchange, wavers above the US$US$196.00 to US$200.00 support level since taking many bearish blows from the weekend.

Based on the technical pattern, the Relative Strength Index (RSI) 3-daily and weekly ‘lookback’ indicators hold to a weak positive signal, while the Moving Average Convergence Divergence (MACD) oscillator bearish bias has weakened, while the ADX (trend) indicator is trending to a bearish bias, which also has weakened.

While the market sustains above the US$US$196.00 to US$200.00 level, we may see further improvements to the bullish case in the short-term, mainly supported by the technical pattern.

Therefore, the market bulls need to reclaim the $236.00 resistance level to reinstate the upside call to US$280.00. Reassess from there.

If we witness a daily close beneath US$196.00, we may trigger further weakness towards a potential measured target of US$150.00 – Reassess from there.

Daily Chart of Binance

Cardano’s (ADA/USD) outlook remains steadily as the market price holds above the major support at US$0.42 after displaying a brief challenge in this area at the weekend.

Based on the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator, it currently holds a weak negative bias, while at the same time, the Moving Average Convergence Divergence (MACD) holds a weak negative bias, and the ADX (trend) indicator supports a ranging market.

While the US$0.42 support is intact, overall, it keeps the market bulls focused on the hurdle of US$0.62/US$0.63, which, if cleared, opens the path further towards the region of US$0.72 to US$0.77.

However, if we witness a decisive break of US$0.42 may give a devastating outlook for the bullish assessment, as this could open the decline further into uncharted waters and give a measured move from a US$0.42 break to US$0.30-US0.33.

Daily Chart of Cardano

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