Cryptos saw a slight comeback on Wednesday. However, much of the market is still holding below key levels.
I’ll highlight those levels in today’s issue, and also discuss where I think cryptos could be going over the next few weeks. I’ll also share a trade I just put on today.
Updates in today’s issue include BTC, ETH, ADA, VET, and SOL.
The crypto market looks relatively indecisive following Tuesday’s massacre.
That’s not uncommon. It usually takes a few days for the market to digest the volatility after a day like Tuesday.
I’ve been getting a lot of requests for charts in my DMs recently, so I thought I’d dedicate today’s issue to nothing but charts.
If I didn’t cover your favorite altcoin in the video, you can use the BTC and ETH analysis to supplement your own. After all, most altcoins follow Bitcoin and Ethereum anyway.
Bitcoin is rallying today following Tuesday’s crash. The question now is whether or not this is sustainable. In other words, is it a relief rally or something more?
If it’s a relief rally, we won’t see BTCUSDT move above $50,000 on a daily closing basis without pulling back first.
One scenario I’m eyeing is a pullback to the $40,000 area. It’s a key weekly level that has yet to be tested as new support.
This week is also carving a bearish engulfing candle. The last time this occurred was at the start of the mid-April correction.
There’s still time left in the week, so this could change. However, it is worth keeping an eye on to see how this progresses.
Keep support comes in at $46,500, the $42,000 – $43,000 region, followed by $40,000.
As for resistance, there’s an ascending channel floor near $48,000. But I think it’s going to take a daily close back above $50,000 to flip it back to support.
Ethereum is also moving higher today to retest the $3,550 area. That’s the bottom of a range ($3,550 – $3,700) that I’ve discussed for weeks.
There’s also a trend line from the July 20th low that could play a role in the coming days.
ETHUSDT needs to close back above the $3,550 – $3,700 region to confirm that Tuesday’s selloff was a false break/bear trap.
Until then, the $3,330 support level is exposed with a close below that opening up $2,900.
Cardano has been one of the weaker cryptos since reaching the $3 resistance area.
Despite the intensity of Tuesday’s selloff, ADAUSDT managed to close above the $2.50 support level. However, today is at risk of closing below it.
A close below $2.50 would open up the next key support at $1.90. It was nearly tested on Tuesday, but not quite.
On the flip side, a close back above $2.50 would keep the level intact as support.
On September 1st, VETUSDT broke out from the April trend line. It’s a level I had mentioned several times in the weeks leading up to the breakout.
We got some decent follow-through after the break. But yesterday’s selloff put VET back below the level on a daily closing basis.
I mentioned yesterday how the price action between July 21st and now is tracking the November breakout to a T.
If it continues, it implies a revisit to the $0.08 area, which is the bottom of a long-standing ascending channel. As always, there are no guarantees this will happen.
A daily close back above the April trend line near $0.126 is the only thing that would negate a move to $0.08.
Earlier today on Twitter I mentioned the possibility of SOLUSDT retracing to the $120 region. It’s a key price action level, an area of Fibonacci confluence, and the location of the August trend line.
Will SOL pull back that far?
Of course, nobody knows if it will or not. But if it does, I’ll be interested in buying SOLUSDT for a swing trade.
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