08 September 2020

TA Tuesday: Zooming out for the big picture

Patrick Heusser

Patrick Heusser

Head of Trading bei Crypto Broker AG

Über den Autor

When the boogyman comes around, it is sensible to zoom out and first take a look at the big picture.

BTC$ (weekly)

It was a tough week for the bulls. The selling waves kept coming in and pushed the price down by 20%.

The weekly chart is still a beauty for the bulls. The Ichimoku cloud finally turned bullish, which has not happened since Dec 31, 2018.

It is clear that in order for the bulls to regain control we need to break above the 12.5k level. The bears need to see a break below 8.5k.

BTC$ (daily)
The break below the 10.5k level dampened my bullish outlook. It also became a pretty tough resistance line to break now for the bulls.

The Ichimoku cloud remains bullish but the gap is closing fast. The uncertainty in the market is pretty high about which way the next bigger move will be. It could be an indication that the next move has some proper legs driven by spot buying. I believe that with the large drop in OI on the futures side, the leverage in derivatives has become rather subdued.

I approached last week’s price action with buy orders on the way down. In case we move another leg lower I start to go leveraged long with a stop at 8.5k for the leveraged position. The first alarm bells will go off when we approach the 9k level.

The topside that I need to see is the 10.5k getting taken out, but adding to my long position will only happen when the local high of 12.5k is taken out.

BTC$ (4h)
I have to admit this chart does not look pretty at all. On the back of what I saw on the daily chart, I have to repeat myself here: 10.5k needs to get taken out for the bulls or it looks dire.

ETH$ (weekly)
There was a massive rejection just below the $500 level, with surprisingly large liquidations and spot selling on the back of a first pop for the DeFi hype.

The overall bullish sentiment is still a given. The market corrected from the break out point at around $230 with no violation of the wave structure. When we measure the correction based on Fibonacci levels, we corrected just a bit lower than the 61.8% retracement level, which still counts as a healthy correction.

Everything above $290 is still bullish in my view.

ETH$ (daily)
The $380 level prooved again that this is an important support/resistance line. It broke for good to the downside as the speed accelerated after the retest. Currently, the base line (blue line) of the Ichimoku cloud seems to play a bigger role than usual. It was supported on the first wick to the downside and is now seeing some resistance on the upside. The line comes in at around $360.

The current support seems to be the upper band of the Ichimoku cloud, which, by the way, is still bullish (green). I would like to see a break to the upside through the base line or $360 with a follow through above $380. Only then I will add more longs.

On the way down I see an opportunity to go leveraged long just above $290 with a tight stop below. There is a chance that if we break $290, we will see a swift move down to $250.

ETH$ (4h)
This is a very similar picture to what we see in bitcoin on the 4h chart. One thing that looks promising for the bulls though is that the lows of the 4h candles over the past 3 days have been consecutively higher. The last low was at $342.

The topside of $360 needs to get taken out to generate some bullish momentum. On the downside I regard the $320 level as the danger zone.

ETHBTC (weekly)
So far so good I would say. As long we are able to hold above the 0.0310 level, I feel very comfortable being long. When I measure the up move starting from the break out of the second symmetrical triangle, then 0.0310 is a 61.8% Fibonacci retracement.

ETHBTC (daily)
We are still in a bullish setup. Above the base line, above the cloud, and at the cloud are green.

Given the wave structure, we have a little break here. When we traded below 0.0330, the consecutive higher highs and higher lows structure broke.

I will be getting slightly concerned if we break below 0.0325 and I will reconsider my longs below 0.0310.

There is not much to add here. The two support levels of 0.0325 and 0.0310 look as important here as on the daily chart.

Now, lets move to the blood bath section…

ATOM$ (4h)
So back to square-one. We are almost back at levels that we saw before the whole DeFi hype started.

For what it is worth, going long now with a stop below 4.50 looks like a good risk/reward trade.

BAND$ (4h)
It was not meant to be. $17 was the local top and after that, the elevator went down quicker than you could say „sell my bags“.

I am doing the same here as for Atom and looking back to where the price was before the DeFi hype. Looking at the Fibonacci levels, we did a very deep correction, but there seems to be a distribution zone at around 61.8%.

There is no immediate trade to take here, I am afraid.

LINK$ (4h)
That chart looks almost identical to the chart for BAND$. For once, this makes sense since they are competitors and offering the same service (oracle).

The distribution zone at around $12 is also in line with the 61.8% Fibonacci retracement level. There is no immediate trade to take here.

LEND$ (4h)
The sell off in the DeFi space seems to have affected most assets in roughly the same way. Here, too, we corrected at about 61.8% and found a distribution zone just above this level.

Here, as well, there is no immediate trade to take.