Analysis of BTC, ETH, AND BTT — and what their Trendlines say

While the bulls are cheering the recent upswing, a research note from JP Morgan states that this current rally “carries echoes of late-2017”. While we are also surprised with the pace of the rally, to term it similar to the late-2017 rally is incorrect. Usually, the first leg of the up move from the lows is strong and more so because the digital currency had been in a long and crushing bear market.

On May 17, Bitcoin plunged about 20% within 15 minutes on the Bitstamp exchange as a large sell order was executed. However, the positive thing is that the flash crash was limited to one exchange only and the recovery has been quite sharp. This shows a lot of demand at lower levels. So, will the rally resume now? Let’s find out.

Aurox

BTC/USD

We had anticipated the Bitcoin rally to stall at $7,500 but the bulls easily broke out of this level and carried the price to the next resistance at $8,500. Some profit booking was seen at this level that dragged the price back to the 20-day EMA, which is acting as a strong support. This is a positive sign, as it indicates buying interest on dips.

The bulls will now try to scale the overhead resistance at $8,500 once again. If successful, the next stop is likely to be closer to $10,000. We don’t expect the digital currency to rise above $10,000 in a hurry. These vertical rallies are not sustainable as they increase the risk of a sharp pullback because the strong support is way lower at $5,000. We prefer the digital currency form a higher base and then launch the next leg of the up move.

That will happen if the bulls fail to ascend $8,500 levels. In such a case, we might see a few days of consolidation between $6,500 and $8,500. The trend remains bullish as long as the price stays above the critical support of $6,000. A breakdown of this support will be a negative sign.

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ETH/USD

Ether broke out of the ascending channel on May 14 and picked up momentum, as projected in our previous analysis. It overshot our target of $255 and reached a high of $281 on May 16.

We like the way the bulls bought the dip on a retest of the breakout levels of the channel, instead of waiting to buy lower at the 20-day EMA. This is a positive sign. The bulls will again try to resume the up move by breaking out of $281. If successful, the next level to watch on the upside is $300 and above it $320. A move above these levels in the short-term will surprise us.

Traders who have booked out of their long positions at higher levels can wait for a new buy setup to form before forming long positions once again. On the other hand, others, who still have part positions left, can trail the stop loss from $155 to $230. The stops can be tightened further as the price moves closer to $300.

Our bullish view will be invalidated if the bears sink the pair back into the ascending channel and below the 20-day EMA.

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BTT/USD

After the strong up move in the first three days following listing, the cryptocurrency topped out at $0.0011650 on February 12. The subsequent pullback dragged it down to $0.00059670 on May 08, which is a sharp fall in a short span of time.

However, since then, the digital currency has picked up momentum and has quickly rallied closer to its lifetime highs. We expect a few days of consolidation or a minor correction before the bulls attempt to break out of it. The pullback is likely to find support between $0.00093070 and $0.00086756, which is 38.2% and 50% Fibonacci retracement of the recent rally. The next up move can carry the digital currency to $0.001733 and above it to $0.0020.

Our bullish view will be invalidated if the bears sink the price below $0.00080443. That might result in a complete 100% retracement of the recent rally.

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Analysis of BTC, ETH, AND BTT — and what their Trendlines say was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.