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.
At its peak last week, price touched close to $5,600 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, Bitcoin’s volume seems to be hinting that people are still betting on a lower price for Bitcoin. 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.
Last week, I mentioned as long as the price continues to move above the 200-day EMA we can be confident the bulls are back and buyers are in charge. I also mentioned in case I was wrong, then two things could 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.
Despite that and, because the 50-day EMA crossed the 200-day EMA last week, we might see BTC making new highs. That usually means buyers want to take back control. Nevertheless, my medium-term bet is that Bitcoin will slowly drop closer to its $4,000 support level.
Ethereum, unlike Bitcoin, is already showing greater signs of price weakness. ETH is now trading below its 50-day EMA after a 9% drop from $167 to $153 during the weekend.
In the early days of April, Ethereum’s price went through the roof before a swift correction. As volumes show, traders are betting heavily on a price drop, way below the 50 and 20-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 the 100-day EMA, between $148-$150.
Litecoin has been the main beneficiary of the current bullish season. At the time of writing, it is sitting near $67 after touching $100 during early April.
Still, at the time of writing, LTC has dropped about 25% from its 2019 high. Since last week LTC has dropped 16%, from about $78 to $67, after a major correction among the cryptocurrency segment.
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 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 $0.30, way below the 20-day EMA, which is currently its resistance level. During the weekend, as it happened with major altcoins, XRP also crippled around 3%.
Volumes are thin as well, and I don’t see XRP being a counter-trend to the rest of the market at this moment.
I consider any cryptocurrency to be in a bull run when the 20-day EMA is above the 50-day EMA and the latter is above the 200-day EMA. Only then will I truly believe buyers are totally in control and enough new cash has definitely poured into the market.