The Next Few Days Will Be Pivotal for Altcoins
In this edition, we take a closer look the technical picture for ETH/USD and LTC/USD, both of which have reached pivotal resistance levels within a medium-term bottoming market situation.
Let’s dig in.
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Bitcoin Volumes in Russia Reach the Highest Level since May 2021
Ruble-denominated Bitcoin volumes hit nearly 1.5 billion RUB last week, with crypto trading volumes surging across the country amid geopolitical concerns in Ukraine.
With increasing uncertainty surrounding Russia’s financial system following Western sanctions, investors have started moving funds towards Bitcoin and other cryptocurrencies. Last Thursday, Ruble-denominated BTC volumes reached 1.5 billion, the highest figure in 10 months.
Read the full article here.
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ETH Reaches Technical Resistance
Ethereum/Dollar is in the throws of a concerted market reversal attempt. The coin exchanges hands at $2,970, up 15% week-on-week.
ETH/USD is currently battling above its first trouble area and the next couple of trading days may be pivotal for price-action in March.
Specifically, a reclaim and close above $3,300 would open the door for price to swing to $3,900 and $4,700 respectively — potentially in a short amount of time.
The current structure offers three technical tailwinds that should be considered.
Firstly, the move into resistance is taking place following a higher low in macro structure. Second, ETH/USD is witnessing the 4th retest of the 200-daily EMA. Thirdly, double-bottom breakout patterns tend to have explosive upside when ‘confirmed’. In this case, the conservative technical target would be $4,400.
To summarise, ETH/USD is at resistance and shallow pullbacks below $2,900 are favourable barring any daily closes below the pivotal level. If such relative strength continues to materialise this week then this could spur another upward thrust to complete the double-bottom breakout scenario.
Litecoin Creeps towards local Pivot
Litecoin/Dollar exchanges hands at $110 at the time of writing, and is practically neutral on a week-on-week basis. From a technical perspective, Litecoin/Dollar has taken macro range-low liquidity, setting a double bottom with a bullishly-diverging relative strength index (RSI) on the daily timeframe.
In terms of the broader crypto picture, crypto-capital-flows logic applies. If BTC/USD rallies above its weekly S/R ($45,000), then capital flows are likely to shift to Litecoin and other altcoins. Since this was covered in the last analysis I’ll avoid repeating and let the updated chart speak for itself.
However, the Litecoin-Bitcoin pair has triggered a red-flag that must be considered. The LTC/BTC pair put in a low not seen since May 2017 (0.002515). The weekly RSI divergence which we’ve been trailing for months has broken down. Such RSI trends aren’t always consequential, but until strength materialises it’s not inconceivable for the pair to slide further. In an uptrend, this means relatively less gains in Dollar terms (unless the trend reverses).
This brings me to my next point.
A project can have all the fundamentals in the world as tailwinds, but if the market doesn’t value those properties then they might as well not exist — privacy being one such property. Some analysts have said that if Litecoin is not a *shitcoin*, then the market should prove it. The LTC/BTC chart proves critics’ claims against litecoin as correct, regardless of what crypto twitter accounts say — myself included. The real question is whether Litecoin is worth anyone’s time anymore. If it underperforms in dollar terms in favourable altseason conditions and outperforms to the downside during sell-offs, then why would anyone want to own it? Isn’t that a perfect short setup?
In dollar terms, the coin is still likely to perform well during bitcoin bull runs, but the diminishing value proposition doesn’t bode well for Litecoin’s future. This is unfortunately just the way it is right now. I look forward to the day the trend changes. This may happen when transaction privacy gains more traction, possibly as a consequence of geopolitical tensions. Remember, bitcoin has no privacy features. Litecoin does.
Time will tell.
Catch you later.
p.s. This is my opinion. It is not financial advice.
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