Martin Vidal
Martin Vidal 8 minutes reading from Bitcoin

Bitcoin, Ethereum, Ripple, Litecoin: Price Analysis on Friday

Here is a long thread of technical analysis on the state of the crypto market: (1/23) btc Ethereum eth SOL Crypto cryptocurrency

On a weekly time frame, BTC and ETH had a recent breakout from a descending trendline on the RSI. SOL had a similar breakout in July. BTC and ETH have also hooked back up from an oversold condition. (2/23)

After retracing some of that move, they have yet to break back above the previous RSI high. If they were able to do so, it would be a second confirmation for the bullish signal. (3/23)

In recent weeks, there have been bullish divergences for BTC and ETH on RSI. (4/23)

The momentum histogram shows very large divergences over the course of the preceding year for BTC, ETH, and SOL. There is also decreasing negative momentum, suggesting a potential shift to positive momentum in the coming weeks. (5/23)

The MACD has recently had positive crossovers on the weekly time frame for all three of the cryptocurrencies being discussed. This is less significant for BTC, which had a small positive crossover in late March/early April. (6/23)

SOL and ETH, however, had not had a positive crossover since August of 2021. (7/23)

BTC is nearing the apex of a falling wedge pattern over a year in the making. It has recently tested resistance within the pattern, and price action following a retest will make for critical information. ETH has been in a downward channel for a similar duration of time. (8/23)

ETH is still some distance away from the resistance line of the channel. SOL was in a sharp falling wedge pattern for many months, but broke out of it upwards in August. It has since trended sideways and shown some relative strength. (9/23)

The daily picture looks less promising, as ETH has just broken downward through a rough head-and-shoulders top. The breakout was significant in terms of price range but occurred on low volume. Reaction at a pullback to the neckline will make for critical information. (10/23)

Notably, while ETH and BTC printed lower lows in order to reach that reversal point, SOL did not. This divergence signals for a potential bullish turn on the daily time frame. (11/23)

Currently, BTC is near its lows for the year, as is SOL. ETH is a bit above its yearly lows, coming off of the relative strength it experienced pre-merge. However, it has shown relative weakness post-merge, and is falling more into parity with ETH and BTC. (12/23)

We are at a stage in this market where there are signs of a pending trend change on the weekly chart, and at an inflection point on the daily chart. (13/23)

As we near the lows on the daily, are we set to make a higher low, and begin an uptrend, as the weekly TA might suggest? Or do we make lower lows, and watch as the shifting trend on the higher time frame is dissipated into a sideways move before continuation down? (14/23)

A lot might hinge on the total crypto market cap, which is once again testing its 200 weekly EMA. It has yet to have a weekly close below this significant moving average, but if such a close should occur it might hint at what direction the overall market will follow. (15/23)

Another important point of observation is a multi-year, ascending trendline in place on the BTC logarithmic chart. (16/23)

We are at that trendline now. This would suggest a coming end to the current downtrend. However, if there is a significant break of this trendline, it is likely that the markets will enter a long-term correction that may very well surpass any in the short history of BTC. (17/23)

Though it’s not within my area of expertise, I’d like to briefly address the macroeconomic situation: Cryptocurrency has been around for a relatively short period of time versus. other assets. So far it has acted as a risk-on asset during this time of economic instability(18/23)

However, the crypto ecosystem holds within it a variety of different use cases. If Bitcoin is truly digital gold, it is likely to reap some benefit from being a simple store of value. (19/23)

As an alternate currency, and one not directly affected by the whims of any central bank, it might serve as a safe-haven for foreign investors, as USD does at such times. Something like Ethereum or Solana is in someways a decentralized version of a tech company. (20/23)

This side of crypto might cause it to perform as tech does, a sector that is particularly sensitive to economic downturns. Only time will tell us for sure, but the narrative thus far has been taken from observation of price action. (21/23)

However, gold, too, has a tendency to fall with the broader market early in a downturn before going on to be a strong outperformer in the later stages of a bear market. We should remember that cryptocurrency as an asset class has no real bear market experience. (22/23)

Assuming how it might react to macroeconomic pressures could prove foolhardy. In the words of Tom Brokaw, “The unforeseen will occur.” (23/23)

This post is based on this twitter thread.


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