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Bears Raise a Flag
BTC: Price: $7,770 | MCAP: $138 billion | 24-Hr Volume: $19 billion
Short-term trend: Bearish
Bitcoin's price bounce from the 4-hour chart 200-candle moving average support seems to have run out of steam near $7.900 in the last 24 hours.
More importantly, the cryptocurrency seems to have created a bear flag – a bearish continuation pattern – on the 4-hour chart. A break below $7,700 would confirm the flag breakdown and open the doors to at least $1,000 sell-off.
A flag breakdown looks likely as BTC's inability to produce stronger corrective bounce from key MA support indicates bullish exhaustion. Further, the daily chat indicators are biased bearish.
That said, a minor rally to $8,200-$8,300 range could be seen if the 4-hour chart 200-candle MA, currently at $7,568 again holds ground.
Long-term trend: Bullish
BTC closed last month with 62 percent gains – the highest since August 2017 – reinforcing the falling wedge breakout confirmed by April's candle.
Further, the 5- and 10-month moving averages have produced a bullish crossover for the first time since September/October 2015.
Therefore, the path of least resistance is to the higher side. The long-term bullish outlook would be invalidated if and when the price finds acceptance below May's low of $5,263.
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GXChain Aims Higher GXC: Price: $1.46 | MCAP: $89.3 million | 24-Hr Volume: $145.7 million
Short-term trend: Neutral-pullback
GXC is one of today's best performing crypto in the top 100 at CoinMarketCap, up 21.49 percent after breaking out beyond yesterday's bearish close below stiff resistances at $1.39.
Momentum is firmly on the buyers side, as seen by an uptick on the Chaikin Money Flow, however, the daily RSI is flashing overbought and will likely pullback on decreasing bullish volume, a sign that investors are becoming wary of current prices.
Long-term trend: Bull potential-neutral
While breaking to a new high at $1.68 on June 5 on the Huobi exchange, GXC will need a firm close on the day in order to shore up continuation in its price, otherwise it could risk another close below aforementioned resistances at $1.39, hinting at continued sideways momentum.
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MONA Dips Down MONA: Price: $2.27 | MCAP: $152.1 million | 24-Hr Volume: $167.1 million
Short-term trend: Neutral
If you recall our previous assessment of MONA we discussed a potential drop in value toward the 50 percent retracement line, also known as a pivot point, due to the nature of the change in the short-term trend within the crypto markets.
The onus is now on the bulls to cement a revival with a strong bounce on similar volume levels seen on June 1, in order to regain a footing above the halfway point and to push beyond the previous candle close at $2.59.
Long-term trend: Bullish
Price action remains bullishly bid above the 50 percent retracement, whereby a firm close below would indeed trigger continual sell orders, driving down the price toward the 61.8 percent Fibonacci retracement at $1.76.
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Keeping a close on the technical developments on the total market capitalization chart comes in handy, especially on days when the market sentiment reaches extremes or the crypto specific charts are showing a lack of clear directional bias.
For instance, the whole market was in a euphoric mood following bitcoin's move to highs near $9,100 last week .
A consensus was pretty much built in the market place that the psychological resistance of $10,000 would be put to test. After all, price charts were reporting bullish continuation patterns.
The total market capitalization, however, was struggling to get past $280-$300 billion resistance range – a sign of broader market exhaustion.
@tradingroomapp put out a tweet on June 1 warning of a price pullback on potential rejection at the resistance range.
The prediction worked to the T as the hard rejection at $280 billion on June 1 paved way for a sell-off. Bitcoin is currently trading at $7,700 and the total market capitalization stands at $236 billion. |
Bitcoin's price has pulled back to levels below $8,000 this week amid signs of buyer exhaustion on technical charts.
For instance, BTC created a doji candle last week, which is widely considered a sign of bullish exhaustion.
Apart from technical studies, trading activity, particularly in futures, is also signaling exhaustion. Trading volume in bitcoin futures listed on the Chicago Mercantile Exchange (CME) fell to lows below 3,000 contracts on Wednesday – the lowest level in over a month. Further, total trading volume was down 75 percent from the 10-day average.
The slide in volume comes after two very strong months, as mentioned in the above tweet. Daily trading volume topped 20,000 three times in May. Daily volume printed highs above 30,000 on May 13.
The sharp drop in trading volumes could be a sign the investors are expecting consolidation following a solid rally – BTC jumped by $4,000 in the last five weeks. |
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| Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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Shallow Bounce