The Market Struggles to Rebound Strongly

News • 2021/05/28 • by

Bitcoin / US Dollar

The compression trend returns at the $36,000 point, which served also as a compression aggregator in January 2021. After hitting this point, the price tried to rebound at $40,000 but today’s correction brings the market back to $36,000. Those levels were familiar in the Bitcoin market, especially at the start of the year, as many analysts claimed that Bitcoin’s rally might stop around $30,000.

This scenario was canceled soon as the price made major moves during the month, bringing higher price levels and larger market depth. This market depth that has been established in January can help the market to stand against bears and create a new narrative for the next bullish cycle. The most important part of this situation is the price to remain at those levels, to establish a new ground that will become a solid base for a new upcoming uptrend.

The bullish scenario after the compression period lays into two steps. The first step will be a sharp move that will make the price climb above $40,000. This move will bring the market in the trending land while the next milestone would be the $47,000 point, the entry point for Tesla’s purchase. Breaking the $47,000 point will become a signal that Bitcoin has overcome Tesla’s frontier and can grow above its relations with Musk’s announcements.

On the other hand, the bearish scenario could implicate a move towards $30,000, which is not impossible at all as we see it happening on the crash day (May 19th). The price touched the $30,000 support level for a moment but the rebound didn’t let the market sink further. If the $30,000 support level tests again, that could be another bearish signal as more market depth will collapse and more investors might exit the market.

The trading volumes have returned to normal levels while the moving averages have sustained a bearish outlook for now.

In the short-term diagram, we can observe that the market moved from one compression trend to another one, indicating that the market is taking solid steps from a condition to another. This move could become a significant forecast for the short-term future as the price could move to a higher point with the same pattern.

Indicators

MACD index started to move in the zero lines, showing that the market is trying to slow down and bring more stability in it. The RSI index has moved between values 30 and 35, indicating that the market has moved in the lower rank and the possibility for an uptrend is higher than before.

Ethereum / US Dollar

Ethereum hit a bottom low point, just above $2,000, the most critical point in the recent bullish trend. After the local bottom, the price climbed again at $2,800, tracking profits of 40 % in just a few days in a very “dangerous” situation. This move proves that Ethereum has welcomes long-term and short-term investors that can benefit from every aspect of the trading life.

The price corrected today at $2,500, which served also as the first resistance point after the $2,000 breakdown. This means that the Ethereum market has passed in the most critical point that will determine the next move on the bullish or bearish side. The bearish side could test the $2,000 point, bringing the market in previous situations that could be less positive for the market.

On the positive side, any bullish uptrend could lead to the next bullish trend as there is no major goal from a technical perspective that could act as a potential resistance level. The trading volumes have remained at higher levels, showing strong interest from investors. The moving averages remained at a bearish position with continuous pressure for better results.

Indicators

MACD index has moved positively during the last few days but there is no positive momentum that could make the market rise again at higher levels. The RSI index moved between values 40 and 45, which means that the market will remain stable but with a negative outlook in the short-term future.

Ripple / US Dollar

Ripple has entered a unique phase for its price development as no support or resistance level could bring the price in a new dimension. Even if the prices are well-known, the levels between $0.60 and $1.00 have remained an unexplored area for Ripple.
This might be the chance for Ripple to establish a more solid approach in the price development, showing to investors that there is more potential in it.

The $1.00 breakdown is a crucial moment for the market also, as it loses the bullish advantage that made the market more lucrative to older investors.

We expect that the market will try to create a compression trend around $1.00 to bring more bullish momentum in the market but there is a need for more traction in the market. The trading volumes have dropped at lower levels while the moving averages continue to drop at more bearish positions.

Indicators

MACD index has started to increase but with slower moves than before, creating less momentum in the market while the RSI index moved below value = 40, which means that the market could drop even more in the next period.

Litecoin / US Dollar

The bearish attack has found Litecoin more vulnerable than other coins, showing that the market depth was not sufficient enough to hold a bearish move. After breaking the support level at $200, the price dropped lower at $140, leading to a 60 % drop from the all-time high level at $390.

The rebound managed to reach $200 again but today it corrected again at $165. From a technical point of view, we believe that the market will continue to move between $200 and $125 for the next period. This compression will lead to the next trend that will be affected by the overall state of the crypto market.

The trading volumes returned at normal levels for the Litecoin market while the moving averages have been apart without any chance to cross in the short-term future and pass on the bullish side.

Indicators

MACD index tries to move towards the zero lines with little success while the RSI index moved below value = 40, showing that the market could move in a corrected way even more in the next period.

Bitcoin Cash / US Dollar

The correction in Bitcoin Cash’s case went down to $550, which was a compression point during the last months, that was established from the market. The rebound, in this case, was up to $750 but lasted only for 2 days before correcting again at $660. The market’s main goal at this moment is to sustain the levels between $700 and $800, as a potential ground for the new bullish trend.

In any case, the $550 point could become the next support level for this situation, driving the price at lower levels before experiencing another rebound in the long-term provision. We expect that Bitcoin Cash will be the most vulnerable asset if there is another bearish wave, eliminating any profits from the previous period.

The trading volumes have remained at higher levels, showing that investors are trying to get involved in the market. The moving averages have been way apart from each other, showing that any positive move will delay changing the market status.

Indicators

MACD index has tried to move at higher levels with no pass in the positive area while the RSI index moved to value = 40, showing that the market might drop even more if there is another bearish wave.

Correlations

Bitcoin / Ethereum = 0.94 (+ 0.21), Bitcoin / Ripple = 0.80 (+ 0.08), Bitcoin / Litecoin = 0.97 (+ 0.14), Bitcoin / Bitcoin Cash = 0.97 (+ 0.23)
The compressing trend has made the market accumulate its moves in one way, showing that every asset in the crypto space was affected by this situation. At this moment, every single asset in the market (Ethereum, Ripple, Litecoin, and Bitcoin Cash) has moved from the medium correlation zone to the strong zone, indicating that the market will move towards a consolidation move in the next period. A consolidated move might be the spark for the revival of the market as it seems that there is still a war between bears and bulls that will keep the trend in compressing mode.