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The crypto markets have almost certainly turned a corner in the last couple of weeks, and put an end to the crypto winter of 2018-19.
In this long-term TA piece, we will briefly look at the top cryptos in the space, and observe the new market structures that have been formed in past days and weeks. We will also look at OKEx’s proprietary token, OKB, to see where it might go.
We will obviously start with the market and industry leader, Bitcoin (BTC). Bitcoin has seen an unbelievable rally after rally, during a virtually unbroken uptrend since February 7.
Bitcoin’s rise, especially in the last two weeks, has tended to defy technical analysis – as often happens – by blasting through any reasonable resistance targets. Thus it is difficult to assert when a correction might come – and at this point, even a tough of the $10,000 mark does not seem out of the question.
But strictly according to the weekly indicators – a reliable and un-erratic timeframe to look at – it seems that Bitcoin’s price must correct soon, in the short term if nothing more.
We can see here, at $8,400, a definitive resistance line based on the July 2018 peak; in addition, an overbought and vertical weekly RSI must force us to be vigilant for a pullback. Bitcoin has broken through a very important support/resistance (S/R) zone on the RSI, and this zone should comprise stiff support on any correction.
Let us not distort the message here, however: these cautions are for short to medium term trading. The bear market is more than likely over, and the long term trend has more than likely turned straight up. A retest of important levels should be healthy, as they should hold and only serve to foster more confidence in the market.
We must look at Ethereum in two dimensions: versus both USD and BTC. The leading smart contract crypto has had an explosive period, with the USD price partially inflated by Bitcoin’s price rise, but also having a respectable showing versus Bitcoin itself.
ETH/USD seems to be consolidating after being rejected above $265 at a very stiff S/R zone with a long history. This consolidation is occurring very close to the rejection point and thus looks quite strong. The RSI, which was heavily overbought on the daily chart, has now cooled off after about a week of sideways price action. In short, Ethereum/USD looks ready, if it wants to, to make a another attempt at $300.
Looking at the ETH/BTC chart, instead, we can clearly see that Ethereum – like pretty much every other crypto – has an inverse relationship to Bitcoin’s breakout behavior: namely, when Bitcoin pumps, ETH takes a back seat.
But ETH/BTC is now resting at a strong support and is unlikely to return to the 0.026 BTC price level. Bitcoin has been sucking all the air out of the room with its price pumps – if BTC were to have a calm sideways direction for a while, altcoins including Ethereum could do very well as the market searches for other sources of profit.
Litecoin (LTC) is the next altcoin we will look to to follow in BTC’s footsteps – although, one could say that the opposite is true. Litecoin, with its halving incoming very soon, has led the 2019 crypto markets with huge gains already this year, having already tripled in value since December 2018.
This silver to Bitcoin’s gold has also taken a back seat to Bitcoin during the latter’s huge gains. But LTC too now seems to have reached the limits of its decline versus Bitcoin.
We can see, above, seven consecutive weeks of LTC/BTC decline. LTC is now resting on strong support near the 0.011 level, and this level is unlikely to break. As with Ethereum and other altcoins, Litecoin could do well if Bitcoin price goes sideways, or has a shallow correction.
OKB is OKEx’s proprietary token, offering discounted trading fees on the rapidly growing Malta-registered exchange.
OKB is quite a new token, with just enough price history to glean a market structure. After a period of sideways ranging, OKB was kicked down by Bitcoin’s huge pump starting on May 8, along with most of the rest of the crypto markets.
OKB has not kept up with the market after Bitcoin took off on April 2. We can clearly see above the USD price topping out precisely at this time. We see the now common pattern of a small altcoin taking a backseat during BTC runs. It would not be good for OKB to lose the $1.40 level, as this has become an important price level in the exchange token’s short price history.
But if we look at the OKB/BTC pairing, below, we can see that OKB is completely bottomed out and has had a full retrace. Assuming that the underlying token has strong fundamentals, this presents a juicy buying opportunity. OKB is unlikely to drop below this historic low – which also means that it is unlikely to break its critical $1.40 price level. Some tepid Bitcoin price action – a theme we keep returning to – would help OKB regain some market share.
One thing that OKB has going for it is its regular token burn, which subtracted a significant quantity of OKB tokens from circulation. 500,000 out of 3.5 million tokens were burned during May, which will help OKB maintain its current price levels.
The exciting thing is, there is very little market structure beyond $1.60, with a small pocket of resistance at $1.80. Beyond that, it is almost open sky – OKB, riding off the strong fundamental value of the OKEx exchange, could see considerable gains if it breaks previous highs of $2.40.