Cryptocurrency market update: Consolidation ahead

At the time of writing, the cryptocurrency market is consolidating nicely, although volumes have been dropping across major exchanges

At the time of writing, the cryptocurrency market is consolidating nicely, although volumes have been dropping across major exchanges.

During the weekend, Bitcoin and other altcoins lost some investor confidence after the market dropped about 3%, but we have since seen a minor bounce back up. My medium-term bet is that the entire cryptocurrency market will continue to turn profits, at least until there is some certainty in the economic panorama. However, volumes are getting thinner, which means there is no new money coming into the market at the moment.

Plus, as I mentioned in my morning Bitcoin analysis, I don’t think we’re out of this bear market yet.

Let’s take a dive into what’s going on in the cryptosphere.

Bitcoin, BTC

At its peak last week, Bitcoin price touched close to $5,400 before hitting a sell wall shortly after. Volume-wise, things are a bit gloomier. As we can see from the volume bars on the left of the graph above (blue and yellow), Bitcoin’s volume seems to be hinting that people are still betting on a lower price for Bitcoin. This means that although most analysts consider the BTC bull market to have started already, I for one think we’re still going to retest the $3,800 levels before kicking off the official Bitcoin 2020 and 2021 bull run.

As long as price continues to move above the 200-day EMA, something I’m quite unsure about at the time of writing, we can be confident the bulls are back and buyers are in charge. If I’m wrong, then two things can happen: either Bitcoin follows the path of Litecoin and other altcoins and starts to consolidate above the 200-day EMA (a really bullish scenario) or it drops below the 200-day EMA. In the latter scenario, I argue Bitcoin would first dance around $4,700 for a few days before dropping into the $4,200-$4,400 levels.

I’ve personally put a couple of orders between $3,800 and $4,800 just in case.

Independently, today is a good day for Bitcoin as prices continue to consolidate nicely, well above the 200-day EMA. The 20-day EMA has also finally crossed the 50-day EMA and is currently pushing towards the 200-day EMA.

Ethereum, ETH

Ethereum, unlike Bitcoin, is already showing greater signs of price weakness. ETH is now trading below its 200-day EMA after an 8% drop from $180 to $164 during the weekend.

In the early days of April, Ethereum’s price went through the roof before a swift correction. Since then, ETH had been growing stronger every day alongside Bitcoin. However, as volumes show, traders are betting heavily on a price drop, way below the 20 and 50-day EMAs.

Even though last week I mentioned what a positive sign it would be if the 20-day EMA crossed the 50-day EMA – which eventually happened around April 10 – ETH has been dropping ever since after a minor consolidation around $170.

For the time being, I would be wary of making an entry position above $150.

Litecoin, LTC

Litecoin has been the main beneficiary of the current bullish season. At the time of writing, it is sitting near $80 after touching $100 during early April. The really bullish signals for Litecoin are the EMAs, as the 20-day EMA has already crossed the 50 and 200-day EMAs and price continues to rise.

Still, at the time of writing, LTC has dropped about 25% from its 2019 high.

Another worrying fact is that volumes keep getting thinner, and at the moment we see traders betting heavily on a price drop to $36-$44. If that happens, it means the bear market is far from over and traders/investors should be ready to make new entries at these levels.

Ripple, XRP

Ripple is still one of the few top-10 cryptocurrencies which hasn’t seen a major push upwards, meaning investors and traders still have time to take some positions.

XRP is currently sitting around $0.33, just below the 20-day EMA, which is currently its resistance level.

Last week, Ripple accompanied the rest of the market in dropping from early April highs and managed to pass its 50-day EMA back towards the 20-day EMA. Volumes are thin as well, and I don’t see XRP being a counter-trend to the rest of the market at this moment.

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