Bitcoin and Ethereum experienced a few really good weeks. Both tokens recovered very fast after a deep pullback that reversed suddenly at the depth of the banking crisis. However, in this current market environment there are no sustained trends. All trends tend to last between 1 and 3 weeks. Crypto is no exception, any crypto bull run in 2023 did last max 3 weeks. Case in point: XRP went up 3 weeks even if XRP has the most beautiful long term chart setup of 2023. What’s next for BTC, ETH and the rest of the crypto market?
Talking about a sudden move in crypto, when the rally in crypto and leading indexes like the S&P 500 started, there was so much pessimism that we were lonely voices writing the following articles:
Big Opportunity: Tech Stocks ARE The New Leaders
Markets Downside Target Reached – What Now?
How To Know Whether There Is Systemic Risk In This Market?
The consensus was that a big downtrend was starting, we said the exact opposite: no downtrend until and unless our systemic market crash indicator breaks down.
Let’s first look at the BTC and ETH charts, starting with the daily and then look at the weekly (long term, big picture), in order to answer the question “what’s next for crypto”.
BTC registered a beautiful reversal. In our crypto investing research service we said on Tue April 18th that BTC hit major resistance, the pullback started one day later. That’s because 30.3k marked the 50% retracement level of the big decline between Nov 2021 and Nov 2022.
The lower levels that should be tested in the next 4 to 8 weeks are 25k and 22k. Below 22k there is good support, we don’t see a new downtrend that will break 20k to the downside.
The long term BTC chart is pretty impressive. On the one hand, because it shows how big the decline was since Nov of 2021, on the other hand because it shows how much upside potential there is. In other words, the recent run from 20k to 30k is just a tiny run in the grand scheme of things.
At the same time, anyone can see how fragile and young this current reversal still is. There is more work (and time) needed for it to become a really strong reversal structure that will allow a big and sustained run higher.
Similarly, ETH, the other leading indicator in the crypto market, has a comparable profile as BTC.
The daily has resistance at the exact same level as where BTC had its resistance: 2090 USD. That’s where ETH started retracing.
The long term ETH chart, frankly, looks more aggressive. We believe there is lots of upside potential here, but the reversal is also young and fragile.
Conclusion: while the recent run was impressive it was primarily due to the fact that it happened at a very unexpected point in time. The run in BTC was almost 50%, the one in ETH some 35%.
The upside potential in both is huge, however a break is required because the charts need more time for solid base building. Remember, the longer the basing pattern, the more powerful the next move.
In our crypto research service, we will be tracking relative strength in our watchlist of 30 tokens. We also do expect to hit at least one unicorn (a multi-bagger) during the summer which, according to our chart patterns, will be a bullish period for crypto. Between now and then, it is matter to be patient and closely track the tokens that show relative strength!