Bitcoin (BTCUSD) (12-hour)
Bitcoin started the week with some weakness just as sentiment was reaching recent highs. After showing some strength over the past week as it pushed towards $50k, the leading digital asset simply couldn’t fend off the bears. Heavy sell volume poured in and wiped out the gains over the past 7 days and participants are waiting to see what lies next. We’ve swept a local low but fibonacci retracements show that we could see further downside. With that said, bearish OTE around $54k has yet to be tapped so bullish continuation from here is certainly possible. In these high-uncertainty zones, the best trade is sometimes no trade.
Ethereum (ETHUSD) (12-hour)
Ethereum looks similarly uncertain as it sits on support. It’s showing some strength in recent hours as support holds, but it’s also in a no-trade-zone for many as it’s next direction still isn’t entirely clear. Unlike Bitcoin, it overshot its bearish OTE last week, but clearly didn’t hold. It’s not a clean setup, and that only leaves one fibonacci range to look at – with bullish OTE’s starting sub $2,600, further downside could be in the cards. If not already positioned, the best thing participants can do is wait and let price action develop further before executing directional trades.
Fundamentals & Correlations (3-day)
Crypto’s Bitcoin Dominance hovers around local lows, showing potential for Bitcoin to go full bull and leaving the altcoin market underperforming. However, there’s other elements at play that could complicate such a thesis – the US Dollar Currency Index is showing strong signs of support around current levels in recent weeks, hinting at further strength in the near future. Also, it remains to be seen how China’s Evergrande situation could affect world markets. There’s already signs of fund managers going risk-off as concerns grow. It remains to be seen if there will be an overreaction to the events, but one thing is clear – risk is being analysed across all markets and the crypto market is no exception. Proceed with caution!